Breakeven Inflation Rates: Powell Has a “Price Problem”

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What’s in Today’s Report:

  • Breakeven Inflation Rates:  Powell Has a “Price Problem”

Futures are modestly lower following a night of underwhelming earnings.

Earnings overnight were bad as tech companies DELL (–6% pre-market) and MRVL (-15% pre-market) both posted disappointing results, as did retailer GAP.

Economically, German retail sales missed expectations (-1.5% vs. (E) 0.0%) but that isn’t moving markets.

Today focus will be on inflation via the Core PCE Price Index (E: 0.3% m/m, 2.9% y/y) and to keep things simple, if this number is “hot” (so Core PCE Price Index above 3.0% y/y) that will increase inflation concerns, push back on rate cut hopes and, likely, pressure stocks further.  The other notable economic report today is Consumer Sentiment (E: 58.6) and focus will be on the inflation expectations inside the report.  The less they rise from last month, the better.

 

Market Technical Assessment: Bitcoin vs. Ethereum

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What’s in Today’s Report:

  • Market Technical Assessment:  Bitcoin vs. Ethereum

Futures are flat following very slightly underwhelming NVDA earnings amidst an otherwise quiet night of news.

NVDA beat earnings and revenue estimates but guidance didn’t meet very elevated expectations.  NVDA is down –2% pre-market but results weren’t disappointing enough to shake broader AI enthusiasm (so the slightly underwhelming NVDA earnings shouldn’t impact the broader market).

Today focus will be on economic data and the key report is Weekly Jobless Claims (E: 230K).  Claims jumped last week and if that continues this week we’ll see a small uptick in labor market anxiety ahead of next Friday’s jobs report (which could put a headwind on markets today).  Other economic reports today include Revised Q2 GDP (E: 3.1%) and Pending Home Sales (E: 0.2%) while we also have one Fed Speaker, Waller at 6:00 p.m. ET.  However, barring a major negative surprise, all of that is unlikely to move markets.

On the earnings front, the reports continue and important results we’re watching today include: BBY ($1.22), MRVL ($0.51) and DELL ($2.09).

 

Why NVDA Earnings Are So Important

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What’s in Today’s Report:

  • Why NVDA Earnings Are So Important
  •  Why Markets Shrugged Off the Trump-Cook Drama
  • Durable Goods and Case-Shiller Data Takeaways

Futures are flat after a mostly quiet night of news as global traders await AI-behemoth NVDA’s quarterly earnings (due out after the close today).

Economically, Australian CPI jumped from 1.9% to 2.8% vs. (E) 2.3% in July, the latest global inflation release to surprise to the upside which is adding to concerns about a resurgence in price pressures across major economies as a result of the trade war.

There are no noteworthy economic releases in the U.S. today and just one Fed official scheduled to speak: Barkin (12:00 p.m. ET).

There is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s solid 2-Yr auction results added a tailwind to the afternoon equity rally) with investors looking for more signs of strong demand.

With the limited list of catalysts today, markets should be quiet and trade with a positioning-style tone as investors await earnings from KSS ($0.33), ANF ($2.27), RY ($2.36), NVDA ($0.94), SNOW (-$0.57), HPQ ($0.75), and CRWD (-$0.19).

NVDA’s results will clearly be the primary focus as the chip-making giant accounts for roughly ~8% of the entire S&P 500; a miss could spark meaningful volatility while a positive surprise would likely see the major indexes make a run at all-time highs.

 

Is the NOB Spread Signaling a “Run Hot” Economy?

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What’s in Today’s Report:

  • Is the NOB Spread Signaling a “Run Hot” Economy?

Futures are in the red but off their overnight lows as traders digest President Trump’s latest efforts to “fire” Fed Governor Cook, rekindling “Fed independence” concerns.

Economically, French Consumer Confidence fell 2 points to 87 vs. (E) 89 in August while Prime Minister Bayrou has called for a confidence vote on September 8, surrounding budget concerns which introduces a renewed sense of market uncertainty in Europe.

Looking into today’s session there are multiple noteworthy economic reports to watch today including Durable Goods (E: -4.0%), Case-Shiller Home Price Index (E: 2.6%), FHFA House Price Index (E: 0.0%), and likely most importantly, Consumer Confidence (E: 96.4).

There is one Fed official scheduled to speak: Barkin (8:30 a.m. ET) as well as a 2-Yr Treasury Note auction at 1:00 p.m. ET, both of which could impact Treasuries and impact equity market trading today.

Finally, a handful of late season earnings releases are due out including: BMO ($2.12), BNS ($1.28), and OKTA ($0.33), but the main earnings catalyst this week will be NVDA’s release later in the week.

 

Were Powell’s Comments Really That Bullish?

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What’s in Today’s Report:

  • Were Powell’s Comments Really That Bullish?
  • Weekly Market Preview: Does the Tech Pullback Continue? (NVDA Earnings on Wednesday)
  • Weekly Economic Cheat Sheet: More Focus on Inflation (Core PCE Price Index on Friday)

Futures are modestly lower mostly on digestion of Friday’s big rally and following a quiet weekend of news.

Economically, the only notable report was German IFO Business Expectations, which jumped to a one year high (91.6 vs. (E) 90.8).

There was no notable geopolitical news over the weekend.

Today there are two economic reports, Chicago Fed (Prior: -0.10), New Home Sales (E: 628K) and two Fed speakers, Logan (3:15 p.m. ET) and Williams (7:15 p.m. ET), but none of that should move markets as the economic reports shouldn’t change the outlook for growth while Powell largely acknowledged a likely rate cut in September (making other Fed commentary less important).

On earnings, there are two reports to watch today: PDD ($1.69) and HEI ($1.12).

 

The Most Important Fed Speech of the Year (So Far)

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What’s in Today’s Report:

  • The Most Important Fed Speech of the Year (So Far)
  • Takeaways from Yesterday’s Sector Performance

Futures are seeing a modest bounce following a generally quiet night of news and head of Powell’s 10:00 a.m. ET speech.

Economically, German GDP declined more than expected, falling –0.3% vs. (E) -0.1%, adding to other hints of stagflation in the global data this week, although Japanese CPI met expectations (3.1% y/y).

There are no notable economic reports today so all the focus will be on Powell’s speech at 10:00 a.m. ET.  Market expectations are that he will signal he’s open to a rate cut in September, essentially reinforcing current market expectations.  If he does not and pushes back on rate cut hopes or ignores policy in his speech altogether, it will be a new market negative.

Finally, mid-season earnings (which have been mixed) continue with two notable reports today: BJ ($1.10), GFI ($0.59).

 

Is There Any Value Left in Tech?

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What’s in Today’s Report:

  • Is There Any Value Left in Tech?
  • Jackson Hole Powell Speech Preview
  • EIA and Oil Market Analysis

Futures are slightly lower despite generally solid economic data overnight.

EU and UK August flash PMIs were mostly solid, with Composite PMIs rising for both regions and staying above 50.

Today is a busy day of economic data and the key reports, in order of importance, are:   Flash Manufacturing PMI (E: 49.7), Flash Services PMI (E: 53.0), Jobless Claims (E: 224K), Philly Fed (E: 8.0), Existing Home Sales (E: 3.90 million) and Leading Indicators (E: -0.1%).  Especially with the flash PMIs, solid data that pushes back on any slowdown narrative will be welcomed by stocks.  There is also one Fed speaker today, Bostic at 7:30 a.m. ET, but he shouldn’t move markets.

On earnings, notable retailer results continue today with WMT ($0.73), while there are some other notable reports as well: BILI ($0.08), ZM ($0.77), INTU ($1.30), WDAY ($0.80), ROST ($1.52).

 

Market Concentration Risks Warrant Attention

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What’s in Today’s Report:

  • Market Concentration Risks Warrant Attention
  • Housing Starts Data Takeaways

Futures are modestly lower but off session lows as the recent tech-led stock market pullback is being digested as the Fed’s Jackson Hole Economic Policy Symposium comes into focus.

Economically, Eurozone HICP (their CPI equivalent) met estimates at 2.0% on the headline and 2.3% on the core figure which is easing recently elevated concerns about a broad-based resurgence in global inflation pressures, subsequently helping equities bounce off the lows.

There are no economic reports today, however the July FOMC meeting minutes will be released at 2:00 p.m. ET and investors will be scouring the details for any new insights on Fed policy plans for H2’25.

Additionally, there are two Fed officials scheduled to speak: Waller (11:00 a.m. ET) and Bostic (3:00 p.m. ET) as well as a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could shed light on investor growth/inflation expectations (and therefore could most stocks).

Finally, retailers continue to dominate earnings news this week with multiple notable major corporations reporting quarterly results today including: TGT ($2.09), EL ($0.08), TJX ($1.01), LOW ($4.23), BIDU ($1.32), and COTY ($0.01). Evidence of ongoing consumer resilience would be a positive for risk assets and likely help stocks stabilize from the early week pullback today.

 

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • The Market’s Perspective on Peace Efforts in Ukraine
  • New ETFs for Your Watchlist

Futures are slightly lower amid a “sell-the-news” reaction to the lack of a ceasefire deal between Russia and Ukraine after President Trump’s meetings with Putin and Zelensky.

There were no notable economic reports overnight leaving investors focused on geopolitics and retailer earnings.

Today, there is one noteworthy economic report to watch: Housing Starts (1.290M), and following yesterday’s soft Housing Market Index release, a soft number could weigh further on currently fragile, albeit still resilient, investor sentiment towards the economy.

Additionally, there is a 6-Week Treasury Bill auction at 11:30 a.m. ET that could shed light on conviction for a September Fed rate cut (the stronger the demand for the Bills, the better) while one Fed official is scheduled to speak in the afternoon: Bowman (2:10 p.m. ET).

Finally, earnings season continues to wind down but there are some important retailer/consumer earnings this week with notables reporting today to include: HD ($4.71), MDT ($1.23), TOL ($3.59), SQM ($0.52). It will be important for earnings to continue to show consumer spending trends remain resilient, otherwise economic worries could weigh on markets this week.

 

Two Events That Could Actually Cause a Pullback

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What’s in Today’s Report:

  • Two Events That Could Actually Cause A Pullback
  • Weekly Market Preview:  All About the Fed (Does Powell Signal A September Cut on Friday?)
  • Weekly Economic Cheat Sheet:  Important Growth Updates This Week (Do They Push Back on Stagflation Worries?)

Futures are slightly lower as the Trump/Putin summit produced no substantial changes in the war amidst an otherwise quiet weekend (market focus is on Powell’s speech Friday and whether he hints at a Sept rate cut, or not)

The Trump/Putin summit resulted in neither a ceasefire nor the threat of oil sanctions and as such, the market is largely ignoring the event.

There were no notable economic reports overnight.

Focus today will be on geo-politics with President Trump meeting with Ukrainian President Zelensky and European leaders at the White House to discuss how to end the war in Ukraine.  From a market standpoint, its focus remains on oil prices.  If the cease fire efforts fail and Trump again threatens oil sanctions on China and other countries buying Russian crude, that will push oil prices higher and put a headwind on stocks.

Outside of geopolitics, there is one economic report today, NAHB Housing Market Index (E: 34) and an important earnings report after the close (Palo Alto Networks, PANW ($0.50).  Given last week’s underwhelming tech reports, markets will want to see a solid result.