A Big Week for Economic Data (And It Needs to Be Good)
What’s in Today’s Report:
- Weekly Market Preview (All About Economic Data – And It Needs to Be Good)
- Weekly Economic Cheat Sheet
Futures are modestly higher after the U.S. and Canada agreed on a new trade deal late Sunday night.
A new three way NAFTA deal is in place as Canada joined the U.S./Mexico trade framework, further reducing non-China trade uncertainty. Notably, though, U.S./China relations deteriorated further as a security meeting between the U.S. and China was cancelled.
Economic data was disappointing as Chinese Sept. Manufacturing PMI fell to 50.8 vs. (E) 51.2, EU Manufacturing PMI slightly missed at 53.2 vs. (E) 53.3 and German Retail Sales dropped –0.1% vs. (E) 0.5%.
Today the key economic report is the September ISM Manufacturing PMI (E: 59.9). That number needs to remain firm to help support stocks.
More broadly, while futures are higher on the U.S./Canada trade news, that’s unlikely to spur a sustainable rally for two reasons: First, a U.S./Canada deal was always expected, so this isn’t a real surprise. Second, the big trade wildcard, China, saw things get incrementally worse over the weekend with the cancellation of the security meeting. Bottom line, I’ll be surprised and impressed if this early Canada related rally can hold throughout the day.
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