A Wildcard to Watch: Legal Challenges to Trump’s Tariffs

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What’s in Today’s Report:

  • Wildcard to Watch: Legal Challenges to Trump’s Tariffs
  • The “Rest of the Market” Continues to Outperform – Chart

Stock futures are wavering between gains and losses this morning as traders digest potential tariff relief for auto imports and position into more mega-cap earnings reports.

Economically, Germany’s GfK Consumer Climate Index rose to -20.6 vs. (E) -25.5, helping German markets outperform with the DAX up ~0.75% this morning.

Today, focus will be on economic data early with International Trade in Goods (E: $-142.0B), Case-Shiller Home Price Index (E: 4.7%), FHFA House Price Index (E: 0.3%), Consumer Confidence (E: 87.5), and JOLTS (E: 7.464 million) data all due to be released.

Earnings season also continues today with noteworthy companies reporting results including: PYPL ($1.15), UPS ($1.42), KO ($0.71), V ($2.68), and SBUX ($0.49).

Can Trump’s “Happy Talk” Keep the S&P 500 Above 5,500?

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What’s in Today’s Report:

  • Can Trump’s “Happy Talk” Keep the S&P 500 Above 5,500?
  • Weekly Market Preview:  More Insight on Tariff Fallout (Important Earnings and Economic Data)
  • Weekly Economic Cheat Sheet:  Jobs Report on Friday and ISM Manufacturing on Thursday are Key Reports to Watch

Futures are modestly weaker following a mostly quiet weekend of news as investors await more clarity on trade deals and insights on how much damage tariffs will do to the economy.

There were no new trade headlines over the weekend (not even notable social media posts) although investors are hopeful trade deals will be announced soon, possibly this week.

Today markets should be quiet (assuming no trade surprises) as there is no notable economic data, no Fed speakers and just one notable earnings report, NXPI ($2.18).  However, don’t let the slow start fool you, as this will be a very busy week of important earnings (AMZN, AAPL, META, MSFT, V) and economic data and as the week moves on, the busier it will get.

Reading Market Volatility: If, Then.

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What’s in Today’s Report:

  • Reading Market Volatility:  If, Then…

Futures are little changed despite solid earnings overnight and more signs of trade war de-escalation.

GOOGL posted stronger than expected results and tech earnings broadly last night were solid, boosting the sector.

On trade, China exempted several categories of U.S. imports from 125% tariffs in a further small de-escalation of trade tensions.

Trade headlines will continue to dominate intra-day trading today but there’s also a notable economic report this morning via University of Michigan Consumer Sentiment (E: 50.8).  The key part of this report will be the inflation expectations and estimates are as follows: One Year Inflation Expectations: 6.7%, Five-Year Inflation Expectations 4.4%.  If the actual data is hotter than those estimates, it will put upward pressure on yields and could weigh on stocks.

On earnings, results so far have been better than expected and that has helped this rally.  Notable results today include: ABBV ($2.40),  CHTR ($8.53) and PSX ($-0.77).

Is Silver Set to Breakout?

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What’s in Today’s Report:

  • Is Silver Set to Breakout?

Futures are modestly weaker on digestion of this week’s rally and on mildly disappointing trade news.

Chinese officials stated there were no ongoing trade talks with the U.S. and again called for the removal of tariffs, pushing back on the “progress” narrative of the past few days.

Focus today will be on economic data and earnings.  On the data front, the key reports today include Durable Goods (E: 1.4%), Jobless Claims (E: 220K) and Existing Home Sales (E: 4.12 million) and if this “hard” data remains solid it will push back against slowdown concerns.    There is also one Fed speaker, Kashkari (5:00 p.m. ET), but he shouldn’t move markets.

On earnings, the key reports today include GOOGL ($2.02), INTC ($-0.14) and PG ($1.54).  For GOOGL and INTC, guidance will be key while investors will wait to see the impact of tariffs on PG’s quarter.

Hard Landing/Soft Landing Scoreboard (Hard Data Holding Up)

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard: Hard Data Is Hanging in There

U.S. stock futures are solidly higher this morning with mega-cap tech leading while bonds are stabilizing after President Trump dialed back rhetoric about firing Fed Chair Powell and made encouraging comments on trade deal progress while TSLA is up 6%+ after Q1 earnings.

Economically, the EU Composite Flash PMI fell to 50.1 vs. (E) 50.4,in April down from 50.9 in March amid weakness in the Services index but investors are taking the disappointing data in stride, instead focusing on the reported trade deal progress.

Today, economic data in the U.S. will be in focus early in the day with the Flash Manufacturing PMI (E: 49.4) and Flash Services PMI (E: 52.5), as well as New Home Sales (E: 682K) data due to be released shortly after the open.

There are also multiple Fed speakers to watch today including: Goolsbee (9:00 a.m. ET), Waller (9:35 a.m. ET), and Hammack later in the day (6:30 p.m. ET).

There is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact bond markets and in turn move stocks in the early afternoon. The stronger the auction results the better after the recent rout in Treasuries.

Finally earnings season continues with notable releases due out from: BA ($-1.54), T ($0.52), IBM ($1.42), and CMG ($0.28).

Trump Attacking Powell Is a Potentially Large Negative

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What’s in Today’s Report:

  • Trump Attacking Powell Is a Potentially Large Negative
  • Chart – Dollar Index’s 10% YTD Decline Underscores U.S. Policy Uncertainty

Equity futures are solidly higher in pre-market trade as investor focus shifts from political tensions to earnings as we approach the peak of the Q1 reporting season.

There were no noteworthy economic reports overnight and there is just one lesser-followed economic report due out in the U.S. today: Richmond Fed Manufacturing Index (E: -5.0) which is unlikely to materially move markets.

There are several Fed officials scheduled to speak today including Jefferson (9:00 a.m. ET), Harker (9:30 a.m. ET), Kashkari (1:40 p.m. ET), and Barkin (2:30 p.m. ET). Given Trump’s recent attacks on Powell’s Fed leadership, their comments have the potential to trigger risk-on or risk-off money flows in intraday trade today.

In the afternoon, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET. Because the 2-Yr is viewed as a “policy-rate-sensitive” Treasury security, the level of demand for the Notes could lead to yield swings that could ultimately impact the stock market.

Finally, earnings season is in full swing this week with notable quarterly results due from VZ ($1.15), GE ($1.26), LMT ($6.32), TSLA ($0.35), and COF ($3.70) today. There will be particular focus on guidance, forecasts, and commentary from leadership as forward earnings expectations have both deteriorated and become increasingly uncertain since the start of the year.

Why This Is (Likely) A Rangebound Market

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What’s in Today’s Report:

  • Why This Is (Likely) A Rangebound Market
  • Weekly Market Preview:  Earnings in Focus (Will Corporate America Confirm Investors’ fears?)
  • Weekly Economic Cheat Sheet:  Is Uncertainty Pressuring Economic Growth Yet?

Futures are sharply lower (down around 1%) following the holiday weekend as rising tension between Fed Chair Powell and President Trump pressured sentiment.

On Friday, National Economic Director Hasset said the White House was studying if Powell can be fired, adding another potential source of uncertainty to the markets.

Today volumes will be low given many global markets (including the UK, EU, Hong Kong and Australia) are closed.  But, there is one economic report, Leading Indicators (E: -0.3%) and one Fed speaker Goolsbee (8:30 a.m. ET).  Any data that implies stable growth and a dovish Fed should help support stocks.

Why Powell Caused Stocks to Drop

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What’s in Today’s Report:

  • Why Powell Caused Stocks to Drop

Futures are moderately higher on positive trade headlines and strong tech earnings.

President Trump posted on social media that “Big Progress” has been made in a trade deal with Japan and that’s helping stocks rally (although details were light).

On earnings, TSM beat earnings and boosted guidance and provided some needed good news for the tech sector.

Today there are several economic reports including, on order of importance, Jobless Claims (E: 225K), Philly Fed (E: 6.7) and Housing Starts (1.420M).  As has been the case, markets will be looking for solid data that pushed back on the slowdown narrative.  We also have one Fed speaker, Barr (11:45 a.m. ET), but he shouldn’t move markets.

Earnings season continues to heat up, meanwhile, and important reports today include UNH ($7.27), AXP ($3.46) and NFLX ($5.74).

Sentiment Update (A Shocking Discovery)

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What’s in Today’s Report:

  • Sentiment Update (A Somewhat Shocking Discovery)
  • Empire State Manufacturing Survey Takeaways

U.S. stock futures are in the red this morning with tech leading to the downside after the U.S. announced new export restrictions on AI chip exports to China.

Economically, Chinese GDP missed (1.2% vs. E: 1.5% q/q) but Retail Sales beat (5.9% vs. E: 4.2%) while EU HICP (CPI equivalent) was inline with estimates at 2.2% y/y.

Looking ahead to today’s session, there are several important economic reports due to be released in the U.S. including: Retail Sales (E: 1.4%), Industrial Production (E: -0.2%), and the Housing Market Index (E: 38).

Additionally, there are two Fed officials scheduled to speak: Hammack (12:00 p.m. ET) and Schmid (7:00 p.m. ET) and the Treasury will hold a 20-Yr Bond auction at 1:00 p.m. ET.

Finally, earnings season continues with quarterly results due from ASML ($6.12), USB ($0.99), PGR ($4.72), CFG ($0.75), AA ($1.73), and CSX ($0.37) today.

What Happens If Markets Tire of Trade Headlines?

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What’s in Today’s Report:

  • What Happens If Markets Tire of Trade Headlines
  • NY Fed Inflation Expectations (Chart)

Futures are slightly higher on news that President Trump is considering a “tariff pause” for automobile imports which offset reports that China is halting U.S. aircraft imports.

Economically, the German ZEW Survey was mixed as Current Conditions were better than feared at -81.2 (E: -86.0), while Economic Sentiment badly missed at -14 (E: 10.0) which underscores the still broad sense of global economic uncertainty.

Today, focus will be on economic data early with the Empire State Manufacturing Index (-10.0) and Import & Export Prices data (E: 0.0% m/m, 0.1% m/m) due to be released before the bell.

Additionally, there is one Fed speaker to watch mid-day: Barkin (11:35 a.m. ET) and earnings season continues with several important companies reporting quarterly results including BAC ($0.81), C ($1.84), JNJ ($2.57), and UAL ($0.80).