For Friday’s trading, if the employment result shows more than 750,000 jobs were added…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
Right now, the current market valuation assumes that tax increases are relatively small and that companies bear most of the…Tom Essay said. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed as the debt ceiling extension was made official during an otherwise quiet night.
Economic data was mixed as the Chinese Service Sector PMI beat estimates (53.4 vs. (E) 49.1) while Japanese House Hold Spending missed expectations (-3.0% vs. (E) -1.9%), but those numbers aren’t moving markets.
The debt ceiling extension was signed late last night and the proverbial “can” has been kicked to late December.
Today focus will be on the Employment Situation report are expectations are as follows: E: Job Adds: 475K, UE Rate: 5.1%, Wages: 0.4% m/m 4.6% y/y. Treasury yields remain buoyant (the 10-year yield was above 1.60% overnight) so risk remains that a “Too Hot” number spikes yields and hits stocks.
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What’s in Today’s Report:
Stock futures are trading higher with global shares this morning as investors cheer the likely deal to extend the debt ceiling while falling energy prices, particularly in Europe, are helping ease broader inflation concerns.
Economically, German Industrial Production for August was very disappointing with a -4.0% headline drop in August (E: -0.4%) however the data is not materially moving markets this morning.
Looking into today’s session, there is just one economic report to watch: Jobless Claims (E: 348K), but a meaningful beat or miss in the headline could cause a hawkish or dovish reaction in markets ahead of tomorrow’s September jobs report.
Additionally, there are a few central bank events that could move markets: ECB Minutes (7:30 a.m. ET) and Cleveland Fed President Loretta Mester speaks (11:45 a.m. ET).
Beyond those potential catalysts, markets will remain focused on the debt ceiling negotiations in Washington and bond yields. And as long as there is not material deterioration in the former or a major resurgence higher in the latter, then stocks should be able to maintain yesterday’s upside momentum.
Prices also got a boost from forecasts for colder weather later in the week across much…analysts at Sevens Report Research wrote in Tuesday’s newsletter. Click here to read the full article.
The yield has been rangebound between 1.46% and 1.54%. A move above that higher level could indicate the yield…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are down more than 1% and bond yields continue to climb higher amid renewed stagflation fears while traders look ahead to this week’s U.S. jobs data.
Economically, data was disappointing overnight as German Manufacturers Orders fell by -7.7% vs. (E) -2.1% in August and EU Retail Sales for the same month rose just 0.3% vs. (E) 0.8%.
Meanwhile, U.K. 10-year Gilt breakevens jumped 10 basis points to the highest since 2008 (above 4%) as surging energy costs add to inflation concerns.
Looking into today’s session, focus will be on the September ADP Employment Report (E: 428K) ahead of the bell while there is one Fed official speaking this morning: Bostic (9:00 & 11:30 a.m. ET). The bond market is continuing to have a significant impact on stocks right now so if there is a spike higher in yields in the wake of the private payrolls print, expect stocks to remain under pressure today.
What’s in Today’s Report:
Futures are enjoying a modest bounce following yesterdays’ declines after a generally quiet night of news.
Economic data was solid overnight as both EU (56.2 vs. (E) 56.1) and UK (54.9 vs. (E) 54.1) September Composite PMIs beat estimates, reflecting stability in the global economic recovery.
On inflation, Euro Zone PPI rose 1.1% vs. (E) 1.3%, implying inflation pressures could be starting to ease.
Today focus will be on economic data and specifically the ISM Services PMI (E: 60.0). Markets will want to see stability in this number to further confirm the COVID spike in July/August didn’t have a lasting impact on the recovery. We also get two Fed speakers today, Barkin (10:30 a.m. ET) and Quarles (1:15 p.m. ET), and markets will continue to be on the lookout for any signs of a compromise on the reconciliation/debt ceiling bill (although nothing material is expected today).
What’s in Today’s Report:
Futures are modestly lower following a mostly quiet weekend of news as investors digested last week’s volatility.
On the Debt Ceiling and other Washington issues, there was no major progress over the weekend although Democrats continue to narrow the gap and progress is occurring towards a compromise deal between liberals and moderates (the compromise is likely at $1.5 trillion and the current negotiations are just above $2 trillion, down from $3.5 trillion).
Trade will be in focus again today as the Biden Administration gives a China trade and tariff update at 10:00 a.m. although no new tariffs are expected.
Today there are no notable economic reports although there are two Fed speakers, Bullard and Rosengren, both at 10:00 a.m. ET. So, focus will be on the trade speech at 10:00 and on the Democrat’s ongoing negotiations. Any signs of further progress towards a deal could help extend Friday’s rally.
What’s in Today’s Report:
Futures are modestly lower to start the fourth quarter as House Democrats failed to pass infrastructure legislation, while economic data was better than expected.
House Democrats remain divided about the size of the infrastructure and reconciliation bills, and the Debt Ceiling can’t be increased until a compromise is found.
EU and UK global final PMIs slightly beat estimates while EU Core HICP (their CPI) was slightly hot (1.9% yoy vs. (E) 1.8% yoy), implying the global recovery remains on track and that inflation pressures are still firm.
Today’s focus will be on important economic reports. First, the Core PCE Price Index (E: 0.2%, 3.6%) is the Fed’s preferred measure of inflation and if it’s much hotter than expectations, that will push yields higher and be another headwind on stocks. Also, the ISM Manufacturing PMI (E: 59.8) gets released and markets will want to see stability there. We also get Consumer Sentiment (E: 71.0) and the inflation expectations component will be closely watched. Finally, there are two Fed speakers today, Harker (11:00 a.m. ET) and Mester (1:00 p.m. ET) but neither should move markets.
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