January Economic Breaker Panel Update

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What’s in Today’s Report:

  • Some Improvement in the Economic Breaker Panel: Three Breakers Tripped, January Update

Futures are cautiously higher this morning mostly thanks to optimism about the US-China trade situation as “mid-level” meetings concluded in Beijing overnight.

President Trump’s address to the nation last night regarding border security and the government shutdown did not have a material effect on markets.

Economically, the Eurozone Unemployment Rate fell to 7.9% vs. (E) 8.1% in November but relative to the first half of 2018, the labor market in the EU continues to show signs of losing momentum.

Oil is up over 2% in the wake of the bullish API print late Tuesday that showed a significant draw in oil stockpiles ahead of today’s official weekly EIA report.

There are no economic reports in the U.S. today but several Fed events to watch including speakers: Bostic (8:20 a.m. ET), Evans (9:00 a.m. ET), and Rosengren (11:30 a.m. ET) before the December FOMC Meeting Minutes are released midafternoon (2:00 p.m. ET).

Stocks continue to have positive momentum right now as the trade war backdrop improves and monetary policy outlook has become less hawkish over the last week but the market is becoming moderately overbought at current levels, on a near term basis, and a profit taking pullback should not come as a surprise.