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.

 

An Easy Way to Monitor Concerns About AI ROI

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What’s in Today’s Report:

  • An Easy Way to Monitor Concerns About AI ROI
  • ISM Manufacturing PMI Takeaways

Futures are trading higher with tech leading after PLTR and Samsung both posted very strong Q4 earnings results while a stabilizing precious metals market and optimism Congress will pass a spending bill are bolstering sentiment.

Economically, French CPI fell to +0.3% Y/Y in January vs. (E) +0.7%, down from +0.8% in December which is easing concerns about higher-for-longer central bank policy rates.

Today, there was one important economic report due to be released: JOLTS (E: 7.245 million) but it will be delayed due to the government shutdown.

The only other potential macro catalysts are a 6-Week Treasury Bill auction at 11:30 a.m. ET and the Fed’s Barkin scheduled to speak before the open (8:00 a.m. ET) however, neither will likely move markets meaningfully with focus on the spending bill in Congress/government shutdown.

Finally, earnings season continues with quarterly reports due from PYPL ($1.29), PEP ($2.24), MRK ($2.03), AMGN ($4.75),  AMD ($1.11), and SMCI ($0.41) today.

 

Does the Warsh Nomination Jeopardize the Rally?

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What’s in Today’s Report:

  • Does the Warsh Nomination Jeopardize the Rally?
  • Weekly Market Preview: Is the Goldilocks Economy Still Rolling?
  • Weekly Economic Cheat Sheet: “Big Three” Monthly Reports This Week (Including Jobs Friday)

Futures are moderately lower on momentum from Friday’s decline as markets digest the surprise Warsh nomination.

Geopolitical headlines were mixed as the government partially shutdown (but should be brief) while fears of a strike against Iran receded on positive Trump comments.

Economically, Chinese Feb. PMIs missed estimates and both the manufacturing and services PMIs fell below 50.

Today focus will be on the ISM Manufacturing PMI (E: 48.3) as that is the first of the big monthly economic reports, and the stronger the data, the better for stocks.

We also have one Fed speaker today, Bostic (12:30 p.m. ET), but he shouldn’t move markets (the market just wants to hear from Warsh now)

Earnings continue on, meanwhile, and some key reports today include: DIS ($1.57), PLTR ($0.17), NXPI ($2.93).

 

Market Based Inflation Expectations Post-Fed

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What’s in Today’s Report:

  • Market Based Inflation Expectations Post-Fed

Futures are moderately lower on the news that President Trump will nominate Kevin Warsh as Fed Chair.

The Warsh nomination is a surprise (Waller and Rieder were the favorites) and he’s not the market’s first choice, as Warsh has been hawkish on the use of QE in the past.

Staying with politics, a deal apparently has been reached to avoid a government shutdown (which is a positive).

Today focus will be on the President’s Fed announcement and, again, while Warsh isn’t a negative for markets, it wasn’t the market’s first choice and that is why we’re seeing profit taking in gold and silver this morning (gold down 3%).

Outside of the Fed, we do get PPI (E: 0.2% m/m, 2.9% y/y) and some notable earnings from lenders/credit card companies: SOFI ($0.12) and AXP ($3.55).  Good commentary about consumer spending will be welcomed by the markets.

 

Another “Run Hot” Policy (Weaker Dollar)

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What’s in Today’s Report:

  • Another “Run Hot” Policy (Weaker Dollar)
  • What the Fed Decision Means for Markets

Futures are modestly higher on better than expected mega-cap tech earnings and reduced shutdown risks.

Big tech earnings weren’t perfect but, on balance, were positive as META (up 10% pre-open) and TSLA (up 2% pre-open) beat while MSFT (down 7% pre-open) disappointed.

Shutdown risks fell on reports that President Trump and Senate Minority leader Schumer were close to a deal to extend government funding.

Focus today will be on Jobless Claims (E: 205K) and another round of important earnings.

Potentially market moving reports today include:  AAPL ($2.65), V ($3.14), MA ($4.20), SNDK ($3.31), CAT ($4.67), LMT ($6.24) and BX ($1.52).

 

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview – Expected, Dovish-If, and Hawkish-If Scenarios
  • Chart – Silver Goes Parabolic, up 150%+ in Three Months

Futures are trading at record highs ahead of today’s Fed decision as ASML, a top supplier for the global semiconductor industry, posted strong earnings and optimistic guidance overnight, fueling a resurgence in mega-cap tech and growth stocks overnight.

Economically, the German GfK Consumer Climate Index edged up from -26.9 to -24.1 vs. (E) -25.5 but the release did not materially move markets.

There are no notable economic reports today which will leave investors focused on the Fed today with the FOMC Meeting Announcement at 2:00 p.m. ET and Fed Chair Powell’s Press Conference shortly after at 2:30 p.m. ET.

Beyond the Fed, the first mega-cap U.S. tech companies will release earnings today including MSFT ($3.88), META ($8.32), TSLA ($0.33), and IBM ($4.33). Other noteworthy names releasing quarterly earnings today include: GEV ($3.03), T ($0.46), and PGR ($4.44).

In order for stocks to continue higher, investors will be looking for a benign (dovish-leaning) Fed decision and strong tech earnings like we saw from ASML overnight which would have the potential to power the major indexes further into record territory.

 

Two Reasons Markets Have Been So Resilient YTD

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What’s in Today’s Report:

  • Two Reasons Markets Have Been So Resilient YTD
  • Weekly Market Preview: Focus on the Fed (Will They Hint at Rate Cuts Later in the Year?)
  • Weekly Economic Cheat Sheet: More Growth and Inflation Updates

Futures are modestly weaker but have rebounded from steep overnight declines, as more political/policy volatility is weighing on futures.

Government shutdown risks spiked over the weekend following another incident with ICE, while separately, President Trump threatened 100% tariffs on Canada.

Economically, the only report was German Ifo Business Expectations and it slightly missed estimates.

Today focus will be on Washington via rising government shutdown risks and the tariff threats on Canada.  Any headlines that make a shutdown seem more likely or that tariff threats will actually go through will weigh on markets, while deescalation on both will help fuel a rebound.

Outside of Washington political volatility, there is one economic report today, Durable Goods (E: 3.1%) and some earnings, STLD ($1.72), BKR ($0.67), NUE ($1.82), but they shouldn’t move markets.