Technical Update (Bounce or Bottom?)

What’s in Today’s Report:

• Technical Market Update – Bounce or Bottom?
• U.S./China Trade Update (What’s Next and What Sectors Benefit)

Futures are modestly lower as markets digest the recent rally following a quiet night of news.

Economically, Chinese inflation underwhelmed as CPI rose 1.9% vs. (E) 2.0% and PPI gained just 0.9% vs. (E) 2.7%.  However, those soft numbers give Chinese authorities more room to further stimulate their economy, so low inflation isn’t a negative.

On trade, there were no further comments from either side (a slight negative) as some were hoping for some optimistic official statement from the Chinese.

Today focus will remain on the Fed as we get multiple Fed speakers, highlighted by Fed Chair Powell (1:00 PM) and Vice Chair Clarida (5:30 PM).  We expect more dovish language from virtually all the speakers today, but at this point most of the benefit from dovish Fed speak is priced in, so don’t expect the comments to be a major positive catalyst unless there’s a surprise.

Economically, the calendar is quiet although we do get Jobless Claims (E: 224k) and we want to see those move back towards 200k and away from 250k.