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).

 

Can the Market Hold Up Despite Tech Weakness?

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What’s in Today’s Report:

  • Can the Market Hold Up Despite Tech Weakness?
  • Weekly Market Preview: Does Tech (and especially software) stabilize?
  • Weekly Economic Cheat Sheet: An Important Week for Growth and Inflation

Futures are modestly lower as markets digest Friday’s big rally following a generally quiet weekend of news.

Politically, Japan’s LDP party won a landslide victory, increasing stimulus expectations. But, positively, the yen and Japanese government bonds are stable as the results largely met expectations.

There were no notable economic reports overnight.

This week is a busy and important one from an economic data standpoint but it starts quietly, as there are no notable economic reports today.

So, focus will be on the tech sector and if it can extend Friday’s rebound (the SaaS names like WDAY, CRM, NOW, remain the key to tech stabilizing in the near term).

On the Fed front, there are two speakers today, Bostic (10:50 a.m. ET) and Waller (3:15 p.m. ET) and some earnings (CLF ($-0.62), APO ($1.91), ON ($0.62)) but barring any surprises, they shouldn’t move markets.

 

Making Sense of Liquidity, Volatility and the S&P 500

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What’s in Today’s Report:

  • Making Sense of Liquidity, Volatility and the S&P 500

Futures are moderately higher as markets try to bounce following a decent night of earnings.

AMZN (down –7% pre-market) earnings underwhelmed but most of the other reports overnight were solid, prompting traders to buy the dip overnight.

Economically, German Industrial Production missed estimates, falling –1.9% vs. (E) -0.3%.

The jobs report scheduled today has been delayed till Wednesday thanks to the government shutdown, so the economic calendar today only contains Consumer Sentiment (E: 55.5), Consumer Credit (E: $8.4B) and one Fed speaker, Jefferson (12:00 p.m. ET).  Barring any major surprises, none of those events should move markets.

So, the performance of tech is likely to determine if this early bounce in the broader market can hold.  If tech stocks (especially software stocks) can hold early gains and add to them, then we could see a solid bounce across markets.  However, if they roll over shortly after the open, brace for another potentially ugly day.

 

Why Tech Declined Again

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What’s in Today’s Report:

  • Why Tech Declined Again
  • New and Notable ETFs

Futures are little changed despite more mixed tech earnings.

GOOGL reported solid results but slightly underwhelming guidance while QCOM outright disappointed and both stocks are lower as tech sentiment remains uncertain.

Today the calendar is busy with a Bank of England Rate Decision (E: No Change) and ECB Rate Decision (E: No Change) before the open.

Economically, we have two labor reports via Jobless Claims (E: 212K) and JOLTS (E: 7.25M) and they key here is stability (meaning no substantial deterioration).  There is also one Fed speaker, Bostic (10:50 a.m. ET), but he shouldn’t move markets.

Finally, earnings season continues and the key report today is AMZN ($1.98) and the market could really use a strong report this afternoon.  Other notable reports include: COP ($1.08), BMY ($1.15), CMI ($5.20), CI ($7.87),   RBLX ($-0.49).

 

Is AI Enthusiasm Starting to Wane?

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What’s in Today’s Report:

  • Is AI Enthusiasm Starting to Wane?

U.S. futures are modestly higher as traders digest yesterday’s heavy selloff in tech/software names while Chinese economic data topped expectations overnight.

Economically, China’s January Services PMI firmed to 52.3 vs. (E) 51.5 from 52.0 in December.

There are multiple economic reports due out this morning including the ADP Employment Report (E: 45K), Final January Composite PMI (E: 52.8), and ISM Services PMI (E: 53.8). As has been the case recently, the stronger the data the better for stocks.

Additionally, there are two Fed officials scheduled to speak today: Barkin (12:00 p.m. ET) and Cook (6:30 p.m. ET), and while markets have been waiting for commentary out of Warsh, any dovish-leaning comments should be supportive of risk assets.

Finally, earnings season continues with UBER ($0.79), LLY ($6.99), ABBV ($2.66), GOOG ($2.58), ARM ($0.21), QCOM ($2.80), and MCK ($9.31) all due to release Q4 results today.