Re-Examining the Four Pillars of the Rally

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What’s in Today’s Report:

  • A Bad Sign from the Most Important ETF in the Market
  • Re-Examining the Current Market Setup – 4 Pillars of the Rally

Futures are mildly higher as traders digest yesterday’s “AI-disruption” selloff ahead of Trump’s State of the Union address this evening.

There were no noteworthy economic reports overnight.

Today, trader focus will be on economic data early with the Case-Shiller Home Price Index (E: 1.3%), the FHFA House Price Index (E: 0.3%), and Consumer Confidence (E: 88.0) reports all due to be released. As has been the case lately, the market will want to see “Goldilocks” data signaling resilient growth trends and cooling inflation pressures in order to mount a meaningful relief rally.

Additionally, there is a slew of Fed speak today as Goolsbee (8:00 a.m. ET), Bostic (9:00 a.m. ET), Collins (9:00 a.m. ET), Waller (9:15 a.m. ET), Cook (9:30 a.m. ET), and Barkin (3:00 p.m. ET) are all on the calendar scheduled to deliver comments.

Finally, there are a handful of noteworthy Q4 earnings due out today, including HD ($2.52), NRG ($1.17), MELI ($11.77), AXON ($-0.18), HPQ ($0.77), and GDDY ($1.58). In addition to solid economic data and less-hawkish Fed speak, strong earnings would offer another tailwind for markets in the wake of yesterday’s latest wave of selling pressure.

 

Is the Tariff Decision a Bullish Catalyst?

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What’s in Today’s Report:

  • Is the Tariff Decision a Bullish Catalyst?
  • Weekly Market Preview:  All About AI (Key AI Earnings This Week)
  • Weekly Economic Cheat Sheet:  More Inflation and Labor Market Insights

Futures are slightly lower are markets digest the SCOTUS tariff decision and despite reports of some de-escalation between the U.S. and Iran.

Fears of an imminent U.S. strike on Iran eased this weekend as the U.S. and Iran announced they will hold more negotiations this Thursday.

Economically, German Ifo Business Conditions slightly missed estimates (89.6 vs. (E) 90.5).

This week is a potentially important one with a lot of critical tech earnings reports, but it starts slowly as there is just one economic report today, Chicago Fed (E: -0.04) and one Fed speaker, Waller (8:00 a.m.) and neither are likely to move markets.

 

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist

Futures are little changed despite solid economic data and some hopes any Iran strikes by the U.S. could be limited.

Economic data overnight was good as the EU flash composite PMI (51,9 vs. (E) 51.4) and the UK flash composite PMI (53.9 vs. (E) 52.2) both beat estimates.

Geopolitically, reports overnight stated a U.S. strike on Iran could be limited and aimed and furthering negotiations.

Today focus will remain on geopolitics (and reduced chances of a strike on Iran will be positive for markets) and economic data, as there are several economic reports today.  They are, in order of importance:  Flash Manufacturing PMI (E: 51.9), Core PCE Price Inde (E: 0.3% m/m, 2.9% y/y) and Advanced Q4 GDP (E: 2.8%).  As has been the case, solid data that’s a bit better than expectations remains the best-case scenario for stocks as it reinforces solid growth.

Finally, on the Fed front, there are two speakers today, Bostic (9:45 a.m. ET) and Musalem (3:30 p.m. ET), but they shouldn’t move markets.

 

Market Multiple Table Chart (Key Support and Resistance Levels to Watch)

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What’s in Today’s Report:

  • Market Multiple Table Chart (Key Support and Resistance Levels to Watch)

Futures are modestly lower on rising geopolitical tensions.

Numerous reports overnight stated a U.S. attack on Iran could occur as early as this weekend, which boosted oil prices and weighed modestly on futures.

Today will be a busy day of economic data and earnings, in addition to watching any geopolitical headlines on Iran.

Economically,  the key reports today are (in order of importance) Jobless Claims (E: 225K), Philly Fed (E: 7.7) and Pending Home Sales (E: 2.5%).  We also get numerous Fed speakers including Bostic (8:20 a.m. ET), Bowman (8:30 a.m. ET), Kashkari (9:00 a.m. ET) and Goolsbee (10:30 a.m. & 2:30 p.m.  ET).

Finally, on the earnings front, the two key reports today are: DE ($1.92), and WMT ($0.73) and the stronger the results, the better for stocks.

 

February MMT: A New Threat to the Rally

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What’s in Today’s Report:

  • February MMT: New Threat to the Rally
  • Empire Manufacturing PMI Takeaways

Futures are trading tentatively higher amid easing AI-disruption angst despite soft PANW earnings yesterday (shares down ~7% today) while bonds and precious metals are steady.

Economically, U.K. CPI cooled from 3.4% to 3.0% Y/Y vs. (E) 3.0% in January while French CPI held steady at 0.3% Y/Y, meeting estimates. Both inflation prints add conviction that the global disinflation trend remains well underway.

Today, focus will be on economic data early with the delayed release of the December Durable Goods report (E: -2.3%) and December Housing Starts data (E: 1.31 million) this morning. Additionally, the as-scheduled January Industrial Production (E: 0.4%) report will be released just ahead of the opening bell.

There are no Fed speakers today however, the January FOMC meeting minutes will be released at 2:00 p.m. ET which will be widely watched by investors looking for fresh clues on the future path of Fed policy rates.

Finally, earnings continue with releases from ADI ($2.31), GRMN ($2.39), CVNA ($1.13), KGC ($0.55), DASH ($0.58), and EBAY ($1.35) all due out today.

 

How AI Turned Into a Market Headwind

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What’s in Today’s Report:

  • How AI Turned Into a Market Headwind
  • Updated Market Outlook: Three “AI Problems” to Monitor
  • Weekly Economic Cheat Sheet – The First February Data Is In Focus

Stock futures are lower with tech leading amid ongoing AI-narrative worries while bond yields are bleeding lower on global growth concerns.

Economically, U.K. Unemployment rose to a 5-year high of 5.2% vs. (E) 5.1% while German CPI held steady at 2.1%.

Looking ahead to today’s session, economic data will be in focus early with the Empire State Manufacturing Index (E: 10.0) and latest Housing Market Index (E: 38) both due to be released.

Moving into the afternoon, there are a pair of Fed officials scheduled to speak: Barr (12:45 p.m. ET) and Daly (2:30 p.m. ET) as well as a 52-Week Treasury Bill auction at 1:00 p.m. ET. The auction results could offer fresh insight on the market’s outlook for Fed policy between now and yearend and subsequently could move markets (stocks and bonds) this afternoon.

Finally, earnings season continues this week with Q4 results due from ET ($0.34), MDT ($1.33), LDOS ($2.57), and PANW ($0.49).

 

Are Equity Investors Getting Paid Enough for Their Risk?

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What’s in Today’s Report:

  • Are Equity Investors Getting Paid Enough for Their Risk?

Futures are modestly weaker despite solid tech earnings overnight as AI anxiety is weighing on markets.

Earnings overnight were solid, highlighted by semiconductor company Applied Materials (AMAT) which best estimates and is rallying 11% pre-market.

Economically, the only notable report was EU Flash GDP which met estimates (1.3% y/y).

Today focus will be on CPI and the market needs a good report to help bolster sentiment and reinforce that rate cuts are coming later this year.  Expectations for CPI are E: 0.3% m/m, 2.5% y/y and Core CPI (0.3% m/m, 2.5% y/y).  Anything below those readings, especially in Core, will be welcomed by markets.

Earnings continue as well and notable reports today include: MRNA ($-2.60), CCJ ($0.28), AAP ($0.41).

 

The Most Important ETF in the Market Right Now

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What’s in Today’s Report:

  • The Most Important ETF in the Market Right Now
  • Is Tech Flashing a Warning Sign for the Broader Markets?
  • What to Do, Specifically, to Diversify Away from Tech

Futures are higher following a quiet night of news thanks to better than expected software earnings.

Tech earnings were mixed as CSCO (down –7%) fell on soft margins while software company Hubspot (HUBS up 7%) rallied on a solid print, bolstering software names.

Economically, UK Monthly GDP slightly missed estimates, rising 0.1% m/m vs. (E) 0.2% m/m.

Today focus will be on economic data and specifically Jobless Claims (E: 222K).  The monthly jobs report relaxed labor market anxiety and a drop in claims will further reinforce that we’re in a Goldilocks economy.  We also get Existing Home Sales (E: 4.20 million), although that shouldn’t move markets.

Earnings continue, meanwhile, with COIN ($0.99) and AMAT ($2.19) posting results today.

 

Jobs Day (A Critical Day for Markets)

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What’s in Today’s Report:

  • Jobs Report Preview (Abbreviated Version)
  • December Retail Sales Takeaways – Consumer Spending Sputtered into Yearend

Stock futures are trading cautiously higher with focus on the delayed release of today’s January jobs report following a quiet night of news.

Economically, Chinese CPI cooled to 0.2% Y/Y vs. (E) 0.4% in January, down from 0.8% Y/Y in December, a favorably “cool” inflation print but one that is not materially impacting markets ahead of the BLS report today.

This morning, traders will be keenly focused on the tardy release of the January BLS Employment Situation Report: (E: +67K Job Adds, 4.4% UE Rate, +3.6% Wage Growth). After a swath of soft labor market reports last week, markets will want to see a solid/”Goldilocks” dataset today to ease worries about a sudden downturn in the labor market while a “too-hot” release could spark hawkish money flows and subsequent volatility in equity markets.

Looking beyond the jobs report, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET that will offer a good read on the bond market’s interpretation of the latest BLS report. Solid demand will shore up expectations for an accommodative Fed stance in 2026 and support risk assets today.

On the Fed front, there are three officials speaking today: Schmid (10:10 a.m. ET), Bowman (10:15 a.m. ET), and Hammack (4:00 p.m. ET), and markets will be looking for clues as to when the FOMC will cut rates next amid the fresh context of today’s jobs numbers.

Finally, earnings season continues with SHOP ($0.41), MCD ($3.04), TMUS ($2.03), APP ($2.89), CSCO ($0.82), and ALB ($-0.40) all due to report Q4 results today.

 

Jobs Report Preview: Why Markets Need a Solid Number

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What’s in Today’s Report:

  • Jobs Report Preview: Why Markets Need a Solid Number

U.S. stock futures are little changed as the ~2.5% rally off last week’s lows is digested ahead of key economic data.

Economically, the NFIB Small Business Optimism Index dipped -0.2 points to 99.3 vs. (E) 99.8 in January.

Focus today will turn back to economic data via Retail Sales (E: 0.4%).  Put simply, consumer spending is the engine of growth for the U.S. economy and a solid retail sales number will reinforce the currently stock-positive Goldilocks economy.

In addition to data, we do get two Fed speakers today, Hammack (12:00 p.m. ET) and Logan (1:00 p.m. ET) but they are unlikely to move markets.

Finally, earnings season rolls on and some notable reports today include: KO ($0.56), SPOT ($2.95), CVS ($0.99), HOOD ($0.63), F ($0.17), LYFT ($0.13).