US equities recover on softer data

US stock market rallied last week erasing most of previous week’s losses as data assuaged fears US economy is overheating. Both the SP 500 and Dow industrial recovered after back to back weekly losses with the broad market gaining 4.3% following 5.2% decline while the ICE dollar index fell 1.4%.

The SP 500 closed higher every session last week. It rose 1.6% Monday as Trump administration unveiled an infrastructure plan to spend $200 billion over 10 years on highways, airports and bridges. It gained 1.3% Wednesday as headline inflation remained steady at 2.1% in January. The broad market climbed 1.2% Thursday and finished little changed Friday.

The ICE dollar index retreated in every session except Friday last week. It slipped 0.3% Monday as consumer inflation expectations declined to 2.71% in January from 2.82% in December. The dollar index fell 0.8% Wednesday as the 0.3% decline in retail sales in January, the biggest drop in almost a years, relieved concerns Federal Reserve may need to increase the pace of interest rate hikes. The dollar slid 0.4% Thursday as manufacturing production remained steady while industrial production declined 0.1% in January. The index rebounded 0.6% Friday after an above expected 0.5% rise over month in import prices for January excluding petroleum.

This week investors will watch closely for the Federal Reserve and Reserve Bank of Australia meeting minutes for updates on central bank policy stances. The Reserve Bank of Australia releases minutes Tuesday, and the Federal Reserve will release minutes of its January 30-31 meeting Wednesday. More companies will report earnings this week, and the inflation report for January will be released in Japan on Friday.