Here’s a preview of the top 3 things that could rock markets tomorrow.
1. Housing Starts Forecast to Decline; Consumer Confidence to Creep Higher
While Fed Chairman Jerome Powell's testimony is expected to garner much of the spotlight, there will still be economic data rolling in, with housing and consumer confidence numbers slated for Tuesday.
The Commerce Department will report on housing starts and building permits for December at 8:30 AM ET (13:30 GMT).
Economists expect that housing starts slipped to an annual rate of 1.250 million units last month from 1.256 million previously.
Building permits, an indication of future demand, are also forecast to show a small decline to a rate of 1.290 million units from 1.322 million.
U.S. consumer confidence, meanwhile, is expected to improve to a reading of 124.7 in February, from 120.2 the prior month. The report will come from the Conference Board at 10 a.m. ET (15:00 GMT).
2. Fed Chief Powell Takes the Stand
Federal Reserve Chairman Jerome Powell is set to deliver the central bank’s semi-annual Monetary Policy Report and testify before the Senate Banking Committee on Tuesday at 10:00 a.m. ET. (15:00 GMT). He’ll also appear before the House Financial Services Committee on Wednesday.
Powell is expected to touch on some of the points raised in the Fed's "Monetary Policy Report" released on Friday.
The Monetary Policy Report is submitted semiannually to the Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services, along with testimony from the Federal Reserve Board Chair.
In the report, the Fed said indicators suggested the real gross domestic product increased at a "solid rate" in the second half of the year, though consumer spending had moderated toward the year end.
Powell will likely continue to tout "patience" on monetary policy tightening, though many market participants will he parsing the comments for any clues about how the central bank plans to end the process of trimming its balance sheet.
The minutes from the Federal Reserve January meeting showed that "almost all" market participants were eyeing an end to Fed's balance sheet shrinking program latest this year.
3. Home Depot's Earnings on Deck
Home Depot (NYSE:HD) will report fourth-quarter results on Tuesday before U.S. markets open, with many keen to get an insight into the home-improvement industry amid an ongoing slump in the housing market.
The home-improvement retailer in November said it expected annual comp sales growth for the full year would come in at 5.5%, above its initial estimate of 5%, as management talked up the prospects of a rebound in growth trends.
Market participants will likely also be on the lookout for a healthy dividend hike, in keeping with the company's pledge to pay out 55% of earnings to investors in the form of dividends each year. Home Deport's annual dividend is currently $4.12 a share.
Home Depot is expected to report earnings of $2.16 a share on revenue of $26.58 billion, according to estimates from Investing.com. Home Depot typically beats on estimates. Shares are up nearly 10.6% this year.
The results will come a day before the fourth-quarter numbers from rival Lowe’s Companies (NYSE:LOW). Lowe's is expected to report earnings of 79 cents a share on revenue of $15.75 billion, according to estimates from Investing.com. Lowe's shares are up 13.7% this year.