Are Credit Spreads Confirming Stock Market Weakness?
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What’s in Today’s Report:
- Are Credit Spreads Confirming Stock Market Weakness?
Futures are slightly higher and are seeing a modest bounce following a generally quiet night of news.
Economically, the only notable number overnight was German Unemployment, which met expectations at 6.1%.
Politically, the House of Representatives will vote on a Speaker today and if Speaker Johnson fails to quickly win that election, it’ll be a market negative as it will raise doubts Republicans can actually pass tax cuts later in 2025.
Today is an important day for markets from a political perspective, it’s also important from an economic standpoint as we get the first of the “Big Three” monthly economic reports via the December ISM Manufacturing PMI (E: 48.5). Markets will want to see that number in-line to slightly lower, as a much better than expected number will likely see a repeat of yesterday, as the dollar and yields should rise and this early rally in stocks should fade as investors reduce expectations for future rate cuts. Goldilocks data is needed for this stock market dip to end.
Speaking of the Fed, we get our first two speakers of 2025 in Barkin (11:00 a.m. ET), and Daly (5:30 p.m. ET) although they shouldn’t move markets.
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