Hard Landing/Soft Landing Scoreboard Update

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What’s in Today’s Report:

  • What’s the State of Growth?  Hard Landing/Soft Landing Scoreboard Update

Futures are moderately higher following better than expected Chinese economic data.

Several important Chinese economic reports beat estimates overnight including GDP (5.4% vs. (E) 5.0%), Industrial Production (6.2% vs. (E) 5.4%) and Retail Sales (3.7% vs. (E) 3.5%).  Those reports boosted hopes for an economic acceleration that would help global growth.

Today there are only two notable economic reports, Housing Starts (1.320M) and Industrial Production (E: 0.3%), and it’ll take substantial misses or beats vs. expectations to hit markets (especially given the looming three-day weekend).  However, more Goldilocks readings should help fuel this week’s rebound.

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Can Stocks Go Back-to-Back-to-Back?

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What’s in Today’s Report:

  • Can Stocks Go Back-to-Back-to-Back?
  • Why CPI Was An Important Positive for Markets
  • EIA Analysis and Oil Market Update

Futures are modestly higher thanks mostly to solid earnings and guidance from Taiwan Semiconductor (TSM).

For AI related tech companies, guidance will be key this earnings season and TSM posted better than expected revenue guidance and the stock is up 5% pre-market.

Economic data overnight largely met expectations.

Today will be a busy day of notable economic data and earnings.  On the economy, we get several important reports today including, in order of importance, Retail Sales (E: 0.5%), Jobless Claims (E: 214K), Philly Fed (E: -8.0) and the Housing Market Index (E: 46).  As has been the case, data that meets or slightly misses expectations is the “best” case for markets (while very strong data will boost yields and pressure stocks).

On earnings, the Q4 reporting season is just starting to ramp up and some important results we’re watching today include BAC ($0.77), MS ($1.65), UNH ($6.71), JBHT ($1.63).

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MMT Chart: Bearish Revisions and Building Technical Risks

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What’s in Today’s Report:

  • MMT Chart – Bearish Revisions and Building Technical Risks
  • PPI Takeaways – Favorably, No Hawkish Surprise

Futures are higher with European shares led by U.K. stocks thanks to more “cooler-than-feared” inflation data released overnight.

Economically, U.K. Core CPI fell 0.3% to 3.2% vs. (E) 3.4% in December, favorably matching a 3+ year low. In the wake of yesterday’s lower than expected U.S. PPI report, we are seeing some recent hawkish money flows unwind and a tentative risk-on tone in the pre-market.

Today is lining up to be very busy with arguably the most important economic data of the week due out before the bell: CPI (E: 0.3% m/m, 2.9% y/y) and Core CPI (E: 0.2% m/m, 3.3% y/y). The Empire State Manufacturing Index will also be released at 8:30 a.m. ET (E: 1.0).

Fed speak also picks up materially today with multiple speakers scheduled to offer commentary over the course of the session including: Barkin (8:00 a.m. ET), Kashkari (10:00 a.m. ET), Williams (11:00 a.m. ET), and Goolsbee (11:00 a.m. ET).

Finally, today is the unofficial start to earnings season as well with big banks due to release Q4 results this morning. Noteworthy financial behemoths reporting before the bell include: JPM ($4.02), C ($1.25), BLK ($11.44), WFC ($1.34), and GS ($7.99).

Bottom line, in order for stocks to continue to stabilize near current levels, investors will want to see “cool” CPI data, less hawkish Fed speak, and solid big bank earnings. If any of those catalysts disappoint, there is a strong risk the 2025 stock market lows are retested today.

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Market Multiple Table: January Update

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What’s in Today’s Report:

  • Market Multiple Table – January Update

Futures are higher with global stock markets thanks to easing tariff policy worries and fading geopolitical angst.

After the close yesterday, Bloomberg reported Trump’s economic team is planning gradual tariff increases (2%-5% per month) rather than large, one-time hikes which is easing worries about the immediate impact on both growth and inflation.

Geopolitically, the WSJ reported Israel and Hamas are working on a ceasefire deal that could be finalized as soon as today. If successful, the deal would favorably remove a lingering source of market uncertainty.

Looking into today’s session, trader focus will be on inflation data early with the December PPI report due before the open (E: 0.3% m/m, 3.3% y/y). A “cooler” than expected report would likely trigger a continued relief rally in equity markets amid stabilizing bond yields.

There are no other notable economic reports today, but two Fed officials are scheduled to speak: Schmid (10:00 a.m. ET) and Williams (3:00 p.m. ET), and because hawkish money flows have been a major source of volatility in equities recently, their commentary has the potential to move markets today. A more dovish-leaning tone from both would be the most favorable outcome for equities today.

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To Pause or Not to Pause? That Is the Fed Question

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What’s in Today’s Report:

  • To Pause or Not to Pause? That is the Fed Question
  • Weekly Market Preview – Could Inflation Data Reintroduce Rate Hike Possibilities?
  • Weekly Economic Cheat Sheet – Wednesday’s CPI Report in Focus

Futures are tracking global equity markets lower this morning with rate-sensitive small caps and tech shares leading declines as bond yields continue higher on the back of Friday’s “hot” jobs report and new highs in the price of oil.

There were no economic reports overnight, however, the U.S. announced new curbs on AI-chip exports (specifically NVDA chips) which is pressuring mega-cap tech stocks in pre-market trade.

Today, there are a limited number of market catalysts as there are no noteworthy U.S. economic reports on the calendar and no Fed officials are scheduled to speak.

There are two Treasury auctions at 11:30 a.m. ET today (for 3-Month and 6-Month Bills) and given the hawkish reaction to Friday’s jobs data, their outcomes could impact stocks. Bottom line, if Treasury yields hold pre-market levels with the 10-Yr and 30-Yr both approaching 5%, stocks will have a very difficult time stabilizing today.

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Jobs Day (Abbreviated Jobs Report Preview)

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What’s in Today’s Report:

  • Jobs Day (Abbreviated Jobs Report Preview)
  • Are the Global Bond Markets Punishing the UK?

Futures are little changed as none of the economic data or central bank speak of the past 48 hours was impactful, so investors are focused on today’s jobs report it’s potential to move markets, especially if it’s “Too Hot.”

Economically, Euro Zone retail sales missed expectations, adding another lack luster data point to the growing list.

Today the major event is the jobs report and stakes for stocks are clear:  If this report is “Too Hot” and boosts fears the Fed has paused rate cuts, it’ll cause yields to rise and hit stocks, potentially hard.

Expectations for the report are as follows: 164K Job-Adds, 4.2% Unemployment Rate, 4.0% y/y Wage Growth.   An in-line to slightly weak number vs. expectations is the best-case scenario for markets this morning:

In addition to the jobs report we also get Consumer Sentiment (E: 74.5) and some notable earnings from DAL ($1.76), WBA ($0.37) and STZ ($3.34), but today is really all about the jobs report.

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Jobs Report Preview (Markets Closed Tomorrow)

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What’s in Today’s Report:

  • Jobs Report Preview
  • ISM Services PMI Takeaways – Strong Data Supports Hawkish Fed Stance
  • Chart – JOLTS Jump to Multi-Month High But Still Trending Lower

Futures were slightly higher earlier this morning as traders digested disappointing data out of Europe but volatility has picked up since CNN reported that Trump is weighing emergency measures to implement new tariffs programs.

Economically, German Manufacturing Orders plunged -5.4% vs. (E) 0.0% while EU Economic Sentiment fell 93.7 vs. (E) 95.7 and Eurozone PPI declined just -1.2% vs. (E) -2.5%.

Today, traders are likely to remain keenly focused on the early tariff headlines that have roiled futures in the pre-market. Any commentary from Trump that tamps down concerns about aggressive tariffs and the threat of global trade wars will help settle markets over the course of the day.

Additionally, there are two key labor market reports to watch today, the ADP Employment Report (E: 134K), and Jobless Claims (E: 216K). After yesterday’s “hot” ISM and JOLTS data, investors will want to see a return to “Goldilocks” data consistent with a cooling labor market to help temper the recent spike in yields and help stocks stabilize.

Finally, there is one Fed speaker early in the day: Waller (8:30 a.m. ET) and a 30-Yr Treasury Bond auction in the early afternoon (1:00 p.m. ET) that cold move yields, and in turn, impact equity markets (strong demand for the long bonds is the best outcome for stocks).

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What Does Wall Street Expect for 2025? (SPX Forecasts)

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What’s in Today’s Report:

  • What Does Wall Street Expect for 2025? (SPX Forecasts)
  • S&P Services PMI Takeaways – Slightly Hawkish

Futures are little changed this morning as global investors digest the solid rebound in stocks over the last two sessions amid largely as-expected economic data overnight.

Economically, Eurozone CPI met estimates with a 0.2% rise to 2.4% Y/Y in December while the EU Unemployment Rate held steady at 6.3%, also inline with expectations.

Today, market focus will be on economic data early with International Trade in Goods (E: $-77.6B), ISM Services PMI (E: 53.2), and JOLTS (E: 7.65 million) all due to be released this morning. The ISM report will be critical as a “hot” print is a risk to the early 2025 rally as it will support the case for a Fed “pause” in their rate cutting cycle and put upward pressure on yields.

There is also one Fed speaker who could shed light on FOMC policy plans (although that is not very likely): Barkin (8:00 a.m. ET).

Finally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET and the results will be important to watch as yesterday’s weak 3-Yr Note auction contributed to the afternoon rise in yields that weighed on stocks. So, the best-case scenario outcome for stocks is a solid auction that turns yields lower, ideally with the 10-Yr yield falling back below 4.60%.

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Why Have Stocks Dropped?

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What’s in Today’s Report:

  • Why Have Stocks Dropped?
  • Weekly Market Preview:  Can Goldilocks Data Fuel A Rebound?
  • Weekly Economic Cheat Sheet:  Friday’s Jobs Report is the First Big Report of 2025.

Futures are extending Friday’s rally thanks to a rebound in political optimism and despite more mixed global economic data.

Mike Johnson was relatively easily re-elected Speaker of the House on Friday, providing a needed positive political event for markets and boosting pro-growth policy hopes.

Economically, global data remained lack luster as the UK Services PMI missed expectations (51.1 vs. (E) 51.4.).

Today focus will turn back to data with Factory Orders (E: -0.3%) and the December Services PMI (E: 58.5) and the more Goldilocks the readings, the more they’ll fuel this early bounce.  There is also one Fed speaker, Cook (9:15 a.m. ET), but she shouldn’t move markets.

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Are Credit Spreads Confirming Stock Market Weakness?

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What’s in Today’s Report:

  • Are Credit Spreads Confirming Stock Market Weakness?

Futures are slightly higher and are seeing a modest bounce following a generally quiet night of news.

Economically, the only notable number overnight was German Unemployment, which met expectations at 6.1%.

Politically, the House of Representatives will vote on a Speaker today and if Speaker Johnson fails to quickly win that election, it’ll be a market negative as it will raise doubts Republicans can actually pass tax cuts later in 2025.

Today is an important day for markets from a political perspective, it’s also important from an economic standpoint as we get the first of the “Big Three” monthly economic reports via the December ISM Manufacturing PMI (E: 48.5).  Markets will want to see that number in-line to slightly lower, as a much better than expected number will likely see a repeat of yesterday, as the dollar and yields should rise and this early rally in stocks should fade as investors reduce expectations for future rate cuts.  Goldilocks data is needed for this stock market dip to end.

Speaking of the Fed, we get our first two speakers of 2025 in Barkin (11:00 a.m. ET), and Daly (5:30 p.m. ET) although they shouldn’t move markets.

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