Every Friday, Brian Jacobsen provides perspective on key events and topics of the current week and his thoughts about what the week ahead may hold. Here’s his report for the week of February 13–19, 2021.

The week that was

  • Oil and natural gas prices shot higher as an Arctic blast rolled through Texas. Large refineries in Texas shut down due to the brutally cold weather. Millions lost power as the state’s electricity grid couldn’t handle the demand for heat.
  • Pfizer Inc. and BioNTech SE announced that their vaccine can be stored in regular freezers. Originally, there were concerns around the vaccine’s distribution since it initially required ultra-cold refrigeration. Also, researchers found that the first of the two doses required grants 92.6% immunity.
  • Going into earnings season for the fourth quarter, companies within the S&P 500 Index were expected to show an 8.32% year-over-year decline in earnings per share. Sales were expected to rise 0.34%. With 83% of companies reporting earnings, earnings growth is coming in at 3.12% year over year and sales are coming in at 2.97%, both better than expected.

Economics:

  • U.S. retail sales jumped 5.3% month over month in January. Relaxed restrictions on activity and $600 stimulus checks helped push spending higher across all major categories. Non-store retailers (for example, online sales) saw an 11% increase in sales. Food services and drinking places had a 6.9% increase. Year over year, retail sales rose 7.7%. Manufacturing output rose 1.0% month over month in January.
  • In the minutes from the last Federal Open Market Committee (FOMC) meeting, officials said it would be “some time” before conditions would be right to scale back the Federal Reserve’s (Fed’s) asset purchase program.

Politics:

  • Former President Trump was acquitted of the charge that he incited the January 6 attack on the U.S. Capitol. The House voted to impeach him, and the trial was in the Senate, where 57 senators voted to convict him while 43 voted against conviction. Conviction would have required 67 senators to vote in favor of conviction.
  • Mario Draghi was sworn in as Italy’s prime minister. He said he’ll focus on rebooting the economy and on Italy’s fight against the pandemic.
  • The U.S. re-entered the Paris Agreement on climate change on February 19. Former President Trump had withdrawn the U.S. from the agreement.
  • The U.S. Department of State said it’s looking for a “diplomatic way forward” with Iran, suggesting the U.S. would work with the European Union to re-engage with Iran on nuclear talks. Iran said it wants sanctions relief before any new talks.
  • In Spain, there were regional elections in Catalonia. The pro-separatist parties that want Catalonia to separate from Spain slightly increased their majority control of Parliament.

The week to come

  • Fed Chair Jerome Powell testifies before Congress during his semiannual appearance testimony.
  • Globally, there’s a lot of “second-tier” data releases, so the big news will likely be around the U.S. data releases. On Wednesday, U.S. new home sales and building permits data for January are released. Then, on Thursday, we get new orders for durable goods and pending home sales data. On Friday, income, spending, and inflation data are released.

Thanks for reading, stay informed!

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