The focus to remain on part two of Fed chief's semi-annual monetary policy testimony.
After the S&P 500 slipped on Friday and broke a two-week rally, stocks may find tougher sledding in the this week as investors may be unwilling to push the benchmark index to a record high.
The Standard & Poor's 500 has risen three per cent over the past three weeks, as investors have largely been willing to forgive a flurry of soft economic data due to harsh winter weather.
The main focus will be Part Two of Federal Reserve Chair
Ironically, Yellen's congressional testimony before US lawmakers was rescheduled after a
Market participants will also monitor Yellen's statements for any signs regarding the central bank's plans as it tapers its stimulus measures. As the US unemployment rate nears the Fed's 6.5 per cent target, the debate has grown over whether interest rates should be raised.
This week's economic calendar includes consumer confidence, new home sales and several other reports on the housing market, durable goods orders, the preliminary data on gross domestic product and the final February reading on consumer sentiment from
While the housing data is likely to be discounted as a result of weather issues, the consumer confidence data may still provide insight to investors as to whether economic growth remains on track.
"If you look at consumer confidence, looking past the weather cycle of indicators, we find the economic outlook of consumers has not changed materially despite all the other indicators that may suggest otherwise," said
"So if consumer confidence comes in as the preliminary reading did, that suggests the end-user demand for goods and services did not fall off a cliff, but rather has been deferred due to weather."
Earnings season will also wind down, with retailers in focus as the weather has added to the sector's many other challenges.
Retail earnings set for release this week include
Of the 441 companies in the S&P 500 that had reported earnings through Friday, 65.3 per cent have reported earnings above analysts' expectations, slightly below the 67 per cent rate for the past four quarters, but above the 63 per cent average since 1994.
Even if the data falls short of expectations and is downplayed once again by investors, a lack of catalysts may prevent the benchmark S&P 500 from convincingly breaking its all-time intraday high of 1,850.84 set on
"1,850 seems to be a level where enough natural selling comes out and it doesn't have the 'oomph' to take it up and through, and every time that happens, it seems to back off a little bit," said
"If the market breaks down, (investors) are happy to jump in and support. But if the market tries to break out, there are plenty of people willing to take a little off the table because they are still looking for the market over the next couple of months to be volatile to the downside." One potential hurdle to continued gains will come the day after Yellen's testimony with a preliminary reading on gross domestic product. The data is expected to show growth of 2.5 per cent, down from a previous reading of 3.2 per cent.
"The GDP revisions, that will be big," said
"You could argue that some of that is priced in, or a lot of it is priced in, but the sticker shock will be interesting, especially given the first quarter is tracking below the fourth quarter."
All told, the stock market could also be roiled again by political turmoil as investors monitor unrest in
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