Investors took profits on Friday while they could ahead of the weekend…explained Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
U.S. benchmark oil remains overbought and could continue to pullback towards an initial support zone between $107 and $112…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are trading higher with European shares amid renewed hopes of a ceasefire in Ukraine while Asian markets declined overnight on new Covid-19 lockdowns.
Geopolitically, Russia continued with aggressive military attacks against Ukraine over the weekend but diplomatic negotiators noted solid progress in ceasefire discussions which is helping risk assets bounce this morning.
There are no economic reports today and no Fed officials are scheduled to speak.
The Treasury will hold an auction for both 3-month and 6-month Bills at 11:30 a.m. ET today which may shed some light on the market’s current outlook for near-term Fed policy. And if shorter duration rates rise in the wake of the auctions, that could weigh on stocks as the Fed meeting comes into focus.
Bottom line, markets are still very much focused on Russia and Ukraine right now and for stocks to meaningfully bounce today, we will need to see real progress towards a ceasefire. Conversely, a deteriorating situation in Ukraine could see stocks retest multi-month lows to start the week today.
What’s in Today’s Report:
Futures are moderately higher on growing optimism for a sooner than later cease-fire in the Russia/Ukraine war.
Reuters quoted Putin as stating there had been “certain positive shifts” in the negotiations for a cease-fire, although the fighting continued and an imminent cease-fire is unlikely.
Economic data was sparse but generally fine. German CPI met expectations at 5.1% yoy while UK Industrial Production rose 0.7% vs. (E) 0.1%.
Today there is only one economic report, Consumer Sentiment (E: 61.7), and the inflation expectations index within the report will be important because if five-year inflation expectations move sharply above 3%, that will get the Fed’s attention and possibly make them more hawkish.
Outside of that report, focus will remain on Russia/Ukraine and if we get any additional hints at a cease-fire, it will extend this morning rally.
What’s in Today’s Report:
Futures are moderately lower as a meeting between the Russian and Ukrainian foreign ministers yielded no additional progress towards peace.
Russia and Ukraine’s foreign ministers met in Turkey for over an hour, but there were no tangible breakthroughs made towards a lasting case-fire.
That lack of progress aside, the tone of the meeting was partially positive and a path towards peace appears to be slowly forming.
Today focus will be on the ECB Announcement (7:45 a.m. ET, press conference at 8:30 a.m. ET) and CPI (E: 0.7% m/m, 7.9% y/y).
Regarding the ECB, the key question is “how dovish is Lagarde?” in her comments, given the economic risks to Europe from the war. The market has priced in that she will be quite dovish, so there is a risk of a mildly hawkish surprise.
Regarding inflation, the number to watch is 8%. If CPI prints above 8% y/y, that will show inflation pressures are not receding and given exploding commodity prices, that means higher inflation for longer, which will likely make the Fed more aggressive on rate hikes (although a 50 bps hike next week is still unlikely).
Finally, we also get Jobless Claims (E: 218K) but that’s shouldn’t move markets,
Ongoing concerns about price pressures and Fed policy expectations being dialed back slightly due to geopolitics are both strong tailwinds behind gold here…analysts at Sevens Report Research wrote. Click here to read the full article.
What’s in Today’s Report:
Markets are trading with a clear risk-on tone today as U.S. stock futures track big gains in European shares, while both the dollar and oil decline on potential progress towards an end to the conflict between Russia and Ukraine.
Earlier today, Kremlin Press Secretary, Peskov, noted that sanctions by the West are making Russia “think carefully” about the situation and that Russia will continue with talks with Ukraine, spurring fresh optimism for a peace deal.
Looking into today’s session, there is one economic report to watch in the morning: JOLTS (E: 10.90M), and then a 10-Yr Treasury Note Auction at 1:00 p.m. ET.
The market’s main focus will remain Russia/Ukraine today as this morning’s risk-on money flows are being driven by perceived progress towards a ceasefire deal ahead of tomorrow’s scheduled talks in Turkey. And if news flow about the conflict is generally positive, oil continues to decline on fading geopolitical concerns, and the S&P 500 can top yesterday’s intraday highs, a relief rally could really gain momentum today.
What’s in Today’s Report:
U.S. futures fell sharply overnight following Russia’s threat to shut the Nord Stream 1 pipeline and the U.S. expressing a willingness to ban imports of Russian oil. But reports of successful evacuations from Ukraine through a corridor agreed upon with Russia has sparked risk on money flows in pre-market trading.
Economic data in Europe was generally good o/n with German Industrial production topping estimates while Eurozone GDP met expectations. Domestically, the NFIB Small Business Optimism Index fell to 95.7 vs. (E) 97.1.
Today, there is one economic report to watch: International Trade in Goods & Services (E: -$84.0B), however, it should not move markets, while the Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET.
Bottom line, the market is attempting to stabilize this morning following yesterday’s route, but for the market to bounce further, we will need to see meaningful de-escalation between Russia and Ukraine over the course of the day.
What’s in Today’s Report:
Futures are sharply lower as oil spiked more than 6% (above $120/bbl) overnight on multiple reports the West is actively considering an embargo on Russian oil and gas.
Geopolitically, there were attempts at localized cease-fires in southern Ukraine to allow citizens to flee the cities, but those efforts have been, so far, a failure. More peace talks are scheduled for today although not much progress is expected.
Economic data was solid as German Manufacturers’ Orders and Retail Sales both beat estimates, but that’s not moving markets.
Today there are no notable economic reports and no Fed speakers, so oil and geopolitics will continue to move markets. If oil continues to rally throughout the day, that will further pressure stocks and it’ll take meaningful progress on a cease-fire to help markets rebound (and that doesn’t seem likely, at least not today).
What’s in Today’s Report:
Futures are moderately lower and European markets are down 3% as the Russia/Ukraine war shows little to no signs of actual de-escalation.
Russian forces attacked the largest nuclear power plant in Ukraine (and Europe) and a fire broke out at the plant. The fire has been extinguished, but Russians now control the plant and the episode highlights the increasing chances of regional collateral damage from the ongoing conflict.
Today focus will remain first on the Russia/Ukraine conflict and any headlines about a cease-fire will obviously result in a knee-jerk rally higher (although to be clear no cease-fire headlines are expected today).
Away from Russia/Ukraine, the key event today is the Employment Situation report and expectations are as follows: Job adds: 390K, Unemployment Rate: 3.9%, Wages: 0.5% m/m, 5.8% y/y. Especially given geopolitical concerns, the market needs a “Just Right” number to help limit losses this morning, and if we get a “Too Hot” reading (on all three metrics) or a very soft number, expect losses to accelerate.
Finally, we get one Fed speaker today, Evans (8:45 a.m. ET), but he shouldn’t move markets given Powell’s testimony the past two days.