It is a similar situation to the 2014 Russian invasion of the Crimean Peninsula, once part of Ukraine…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are down slightly this morning but well off the overnight lows as traders digest the latest geopolitical developments between Russia and Ukraine.
Russian President Putin recognized the independence of two “breakaway” regions in eastern Ukraine yesterday, but the risk of a full scale invasion of Ukraine still remains low.
Looking into today’s session, there are several economic reports due to be released including: Case-Shiller Home Price Index (E: 1.1%), FHFA House Price Index (E: 1.0%), PMI Composite Flash (E: 51.9), and Consumer Confidence (E: 110.0). There is also one Fed speaker on the schedule: Bostic (3:30 p.m. ET).
Finally, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET and with the underlying market focus still on future Fed policy, a soft outcome (hawkish) could add to the current geopolitically fueled market volatility.
Regarding Ukraine, investors will await the announcement of new sanctions from the west against Russia, and depending on how severe they are, it could add to the selling pressure on stocks today. Additionally, as of now, Blinken and Lavrov are still scheduled to meet this week but if that meeting is canceled that will suggest a more severe conflict is imminent, resulting in more risk-off money flows.
What’s in Today’s Report:
Futures are enjoying a modest bounce as the headlines on Russia/Ukraine turned a bit more positive overnight.
The U.S. Secretary of State and his Russian counterpart will meet next week, signaling diplomatic efforts to de-escalate will continue.
Economic data was sparse but generally solid as Japanese CPI met expectations while UK Retail Sales beat estimates.
Today’s focus will again be on geopolitical headlines, and any reports of de-escalation will help stocks recoup more of Thursday’s losses, while negative headlines will likely erase these early gains.
Beyond the Russia/Ukraine situation, we do get three Fed speakers today, two of which are Fed leadership: Williams (11:00 a.m. ET) and Brainard (1:30 p.m. ET). If they make hawkish commentary (especially Brainard) look for stocks to drop again. Fed President Evans (10:15 a.m. ET) also speaks this morning.
Finally, on the economic front, we get one report today, Existing Home Sales (E: 6.08M), but that shouldn’t move markets.
What’s in Today’s Report:
Futures are modestly weaker as negative headlines on Russia/Ukraine weighed on sentiment.
Russia accused Ukraine of attacking Russian-back separatists in the Dontesk region of Ukraine, and analysts fear this could be the pretext for a larger military conflict if Russia moves to annex Dontesk, (this would be a replay of what happened with Crimea in 2014).
Russia/Ukraine headlines are driving short term trading and that will remain the case today, with any headlines implying diplomacy causing a rally, and any headlines implying conflict causing a sell off.
Beyond geopolitics, however, we get several pieces of economic data, including Jobless Claims (E: 224K), Housing Starts (E: 1.708M) and the Philadelphia Fed Manufacturing Index (E: 19.7) and as has been the case the market will be looking for stability in the data.
Finally, we also get two Fed speakers, Bullard (again) at 11:00 a.m. ET and Mester at 5:00 p.m. ET.
Bottom line, inflation remains the single biggest potential influence over Fed policy, and Fed policy will determine whether stocks continue to rally, or decline…said Tom Essaye, founder of the Sevens Report. Click here to read the full article.
Inflation has to stop going up. I know that sounds overly simplistic, but the bottom line is that for the past several months, markets and the Fed have seen ‘hints’ of a peak in inflation pressures, yet that wasn’t reality…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower while most global markets rallied overnight as traders continue to monitor the situation in Ukraine and look ahead to the Fed minutes release.
Geopolitically, there were no major developments regarding Ukraine o/n but U.S. officials continue to warn that an invasion is possible at anytime, leaving markets on edge.
Economically, Chinese inflation data came in below estimates while U.K. PPI ran hot but neither release materially moved markets overnight.
Today is lining up to be a fairly busy day from a catalyst standpoint as there are several notable economic reports due out including: Retail Sales (E: 2.0%), Import & Export Prices (E: 1.3%, 0.7%), Industrial Production (E: 0.4%), and Housing Market Index (E: 83).
From there, focus will shift to a 20-Yr Treasury Bond auction at 1:00 p.m. ET and then likely the most important catalyst of the day, the FOMC Minutes will be released at 2:00 p.m. ET.
The market has been very indecisive in recent sessions and that is likely to continue today, however, if the geopolitical backdrop remains largely calm, economic data is favorable, and the FOMC minutes are not interpreted as overly hawkish, we may finally see the market break back to test the February highs.
What’s in Today’s Report:
Easing geopolitical tensions are driving risk on money flows this morning with U.S. stock futures higher by well over 1% while bonds and other safe havens decline.
Multiple news outlets reported overnight that Russian troops completed their drills and were returning to their bases, reducing fears of an imminent invasion of Ukraine.
There were a few economic reports overnight including the U.K. Labour Market report and the German ZEW Survey but both largely met estimates and neither meaningfully moved markets.
Looking into today’s session, there are no Fed speakers or Treasury auctions but there are two notable economic reports to watch: PPI (E: 0.5%, 9.2%) and Empire State Manufacturing Index (E: 10.0).
Bottom line, this is a headline driven market right now and investors will want to see continued de-escalation in the Russia-Ukraine conflict (German Chancellor Scholz meets with Russian President Putin) as well as a PPI print that is not too hot and Empire report that shows growth is not materially slowing for the overnight relief rally to extend higher.
What’s in Today’s Report:
Futures are moderately lower following a quiet weekend of actual news, as futures are being pulled lower by international markets as there was no progress on the Russia/Ukraine standoff.
The Russia/Ukraine situation was unchanged over the weekend and a Russian invasion could occur at any moment and that is acting as a short term headwind on markets.
There was no notable economic or inflation data overnight.
Today Ukraine headlines will drive trading and any headlines that imply the start of a conflict will be a headwind, while any that imply a delay in hostilities will be a tailwind. We also get one Fed speaker, Bullard (8:30 a.m. ET on CNBC) and he obviously moved markets last week with this 50 bps March hike and 100 bps of tightening by June calls, so we’ll be watching closely to see if he further clarifies or doubles down on those comments (any dovish clarification would provide a small tailwind for stocks).
What’s in Today’s Report:
Futures are moderately weaker mostly on momentum from Thursday’s selloff and despite some reassuring commentary from Fed officials overnight.
Fed Presidents Daly and Barkin both pushed back on the idea of a 50 basis point rate hike in March, countering the hawkish commentary from Fed President Bullard.
Economic data was mixed as German CPI met estimates (4.9% y/y) while UK GDP and Industrial Production both slightly missed estimates.
Today there are no notable economic reports and no Fed speakers scheduled, so focus will be on Consumer Sentiment (E: 67.5) and specifically the inflation expectations indices. If one year and five year inflation expectations can decline, that will help ease some inflation concerns and could spark a rebound later this morning.