“The stock market is relentless in asking the question, ‘What’s next?’ ” says Tom Essaye, founder of the “Sevens Report,” a financial newsletter. “The idea of ‘peak everything’ is a legitimate one. There is a fear that … while things are great right now, it’s as good as it gets.”
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Futures are modestly higher thanks to decent Chinese economic data, following a generally quiet weekend.
Chinese August exports beat expectations, rising 10.0% vs. (E) 9.8%, providing more evidence that economic stimulus measures from Chinese officials are starting to work.
On trade, Friday afternoon President Trump again threatened to tax all Chinese exports to the U.S., but that threat is a repeat, and nothing new happened over the weekend.
Today there are no economic reports and only one Fed speaker, Bostic (11:30 a.m. ET), so focus will remain on any trade headlines regarding the $200 billion in additional Chinese tariffs. Any hints the tariffs are imminent and near the stated total of $200 billion will hit markets, and without support from the tech sector, the chances of a short term pullback in stocks remain uncomfortably high.
“Yesterday’s tech weakness, even if it just part of a healthy pullback in an extended sector, does set up a potential danger spot for stocks over the coming days,” says Tom Essaye of The Sevens Report, noting tech has powered stock gains this year even in the face of trade uncertainty.
“Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space,” says Tyler Richey of the Sevens Report.
Futures are modestly lower following a night of mixed economic data and a somewhat negative trade headline.
The WSJ published a trade article that implied the chances of a near term U.S./China deal were declining, but also said a decision on the 200 bln in new tariffs was weeks away.
Economic data was mixed as German Industrial Production missed estimates (-1.1% vs. (E) 0.3%) while Japanese Household Spending beat (0.1% vs. (E) 1.0%).
Today focus will be on the jobs report, and the expectations are: Jobs (E: 195K), Unemployment (E: 3.8%) and Wages (E: 0.3% m/m, 2.8% y/y). As has been the case for the last few jobs report, as long as we don’t have “3’s” across the board (300k job adds, 3% unemployment and 3.0% yoy wage gains) this report shouldn’t be too much of a headwind on stocks.
Finally, in addition to the jobs report we also have two Fed speakers, Rosengren (8:30 a.m. ET) and Mester (9:00 a.m. ET), but neither should move markets.
“Gasoline and heating-oil futures are still in the driver seat of the energy markets, after early week rallies due to [Gulf storm] Gordon have steadily come unwound since the short trading week started on Tuesday,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.
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Futures are slightly higher following a generally quiet night of news.
There was no new trade news overnight so markets continue to wait for the administration decision on the 200 billion in new Chinese tariffs (it can come any day now).
Economically the only notable report was German Manufacturers’ Orders, which missed estimates (-0.9% vs. (E) 2.1%).
Today markets will be watching the news wires for any tariff related headlines. But, outside of that, we get thee notable economic reports, the most important of which is the ISM Non-Manufacturing Index (E: 56.8). On the employment front, we also get the ADP Employment Report (E: 182K) and Jobless Claims (E: 213K) and both reports should show continued strength in the job market.
Oil prices settled on Wednesday at their lowest levels in about a week as a major storm that passed through the Gulf of Mexico missed the bulk of the oil and natural-gas operations in the region.
“Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space,” said Tyler Richey, co-editor of the Sevens Report.
Read the full article here.
Futures are down roughly 10 points, the dollar is modestly higher, and international markets were broadly lower o/n amid fresh trade angst and concerns that the Chinese economy may be slowing.
The privately published Caixin China General Services PMI fell to a five month low in August, contradicting government data that showed continued growth last month.
Today, investor focus will return to trade as talks with Canada are set to resume and the initial tariff deadline for the next wave of tariffs on China, looms.
There is one economic report to watch: International Trade (E: -$50.2B), and several Fed speakers on the schedule: Williams (12:30, 3:00, 5:30 p.m. ET), Kashkari (4:00 p.m. ET), and Bostic (6:30 p.m. ET).
The dollar remains the single best indicator for near term moves in the market right now, so if the dollar continues to extend last week’s rally, stocks will likely remain under pressure, especially emerging market shares. But, if the dollar starts to fade, and fall back towards key support, stocks should be able to retest recent highs.
Futures are marginally higher this morning and global markets were mostly flat overnight after a very quiet and uneventful holiday weekend as focus turns to data this week.
Economically, Eurozone PPI was solid at 4.0% YoY, but most of the rise was due to energy prices and core inflation levels remain slow but steady in the EU.
Energy prices are notably higher this morning due to Tropical Storm Gordon’s near term threat to Gulf oil operations.
Today, focus will be on economic data early: ISM Manufacturing Index (E: 57.6) and Construction Spending (E: 0.4%) while there are no Fed speakers scheduled to speak.
Beyond data, investors will largely be focused on trade relations this week, more so with China but negotiations with Canada will also be important.
The dollar has been a good, inverse indicator for investor sentiment towards trade and it is handily higher this morning. If the dollar strength continues, it will be hard for stocks to continue last week’s gains this week.