CHRIS VERSACE: Good morning, subscribers. As JD Durkin and I discussed on yesterday's rundown, not only is it a massive week for corporate earnings, we also have a very big week for economic data as well, not to mention the outcome of the Fed's latest monetary policy meeting. In today's rundown, we're going to discuss the economic data and other items that could shape how we view the market, and of course, the portfolio in the days and weeks ahead. Let's first start with the latest manufacturing data sets we'll get tomorrow morning from S&P Global and ISM.
Setting the stage, the December data showed a contracting economy with new order data suggesting more of the same was ahead for the month of January. The consensus view for the January data has it coming in below 50, still contracting. But as we look to gauge the prospects for potentially a short and shallow recession, it will be the January new order data that we focus in on most.
We remind members of the statistically strong relationship between the data from ISM and S&P 500 revenue prospects. If the ISM data is weaker than expected, odds are there is more downside to be had in terms of 2023 earnings expectations. We've already seen those expectations come down considerably over the last several months.
But so far, the consensus still calls for year-over-year positive EPS growth in 2023. Once we have the ISM data in hand, we'll have a much better sense as to how realistic those EPS prospects are, again, for the S&P 500. Ahead of the Fed monetary policy announcement tomorrow afternoon, we'll also be assessing what those January PMI reports have to say about inflation and job creation.
To that, we'll also get similar insights from other data, including January's ADP employment change report. All of that will be our last look before the Fed meeting. And it will fine tune expectations, what we're likely to hear, in terms of monetary policy and from Fed Chair Powell during the subsequent press conference.
Remember, the expectation is the Fed will deliver a 25-basis point rate hike, which we expect. But we would point out anything different will be a surprise to the market. Again, the real focus is going to be on what's ahead for monetary policy. The market currently expects one more 25-basis point rate hike in the second half of 2022. But we will be listening rather closely to what's said about the terminal level for the Fed funds rate.
As much as we would like the Fed to be done, ongoing signs of inflation pressure and the distance to the Fed's 2% target could spell something more on the rate hike front than the market is counting on. If that comes to pass, we are likely to see the market trade-off as it once again has to reset expectations.
Rounding out the economic data for this week and giving even more context on job creation and wage pressures, we have the December JOLTS report and the January employment report. We'll be using the December JOLTS report to get the latest picture on not only how tight the overall employment market is, but also the latest on health care staffing demands. That, as members know, makes the JOLTS report a must watch one for our shares of AMN health care.
AMN shares have been volatile of late. But with headlines continuing to report nursing shortages, the December JOLTS report should be a positive piece of data for our AMN shares. Inside the January employment report, the focus will be on the unemployment rate, to see if there's any loosening in the employment market versus December.
Remember, the Fed is really keyed here on how tight the employment market is and what that means for wage inflation-- something else that will get updated in the January employment report. These are all things that we expect the Fed to key on. And as such, we will as well.
Finally, if the economic calendar wasn't already packed enough, we'll also be watching Washington and the debt ceiling. The White House is expected to get together tomorrow with growth Republicans for some discussions. But candidly, we would be surprised to see any dramatic progress. Candidly, we expect this won't be a short affair.
And while we expect a fair amount of noise to be had as these negotiations are had back and forth, at the end of the day, what will matter most is the final outcome between the debt ceiling, a balanced budget, government spending, and spending across a wide variety of programs, not just defense spending in the next few years. With all of this and more coming at us this week, members, be sure to keep an eye on your email inboxes as we break it all down. Thanks for joining us today.