Put differently, we all know that inflation surged in April. The key is whether it keeps going through the summer. If inflation continues during the summer months that could cause volatility and… Essay wrote. Click here to read the full article.
Inflation not being temporary is easily the biggest long-term risk to this market, because it will cause the Fed to get more…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
That can tend to let the Dow be more volatile. It can also be skewed more by one stock, it gives you a glimpse of the economy that other indexes don’t. And the fact that companies…said Tom Essaye, president of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed following a generally quiet night of news as markets await the first employment report of the week.
Economic data was sparse but disappointing, as German Retail Sales fell –5.5% vs. (E) -2.6% while Euro Zone PPI rose 7.6% yoy vs. (E) 7.3% and those disappointing numbers are weighing slightly on European indices.
Today’s focus will be on the ADP Employment Report (E: 627k) and if it’s much weaker than expected, or there’s some specific mention about labor shortage issues, expect that to be a headwind on stocks. There are also three Fed speakers today, Evans (12:00 p.m. ET), Harker (12:00 p.m. ET), and Kaplan (6:05 p.m. ET) but we don’t expect them to move markets.
What’s in Today’s Report:
Futures are modestly higher thanks to more solid economic data combined with generally in-line inflation metrics.
The Chinese, EU, and UK final May manufacturing PMIs all largely met expectations and confirmed the global economic recovery is continuing (and importantly not deteriorating).
EU HICP (their CPI) rose 2.0% vs. (E) 1.9%, but the core reading was in line with expectations at 0.9% and as such not spiking inflation fears.
Focus today will be on the ISM Manufacturing PMI (E: 60.9) and the market will want to see a “Goldilocks” number that shows the economic rebound is continuing, but that activity isn’t so hot that it increases inflation fears. If we get that “Goldilocks” number stocks can extend the early rally.
