“Archegos Capital was unable to make margin calls last week which resulted in losses, and Nomura and Credit Suisse, and that’s causing some mild anxiety about more…” wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are flat and bond markets are trading in an orderly manner this morning as investors await details on President Biden’s infrastructure plan amid end of month and quarter positioning money flows.
Economic data was mostly positive overnight as China’s CFLP Manufacturing PMI came in at 51.9 vs. (E) 51.0 while German Unemployment met estimates at 6.0% and the Eurozone HICP Flash for March was 1.3% vs. (E) 1.3%.
Today, we will get our first look at March jobs data via the ADP Employment Report (E: 500K) and the market will be looking for a number that is not “too hot” to cause another leg higher in bond yields which would weigh on tech stocks but not too underwhelming to suggest the recovery in the labor market is beginning to lose momentum.
There is one other second tiered economic report: Pending Home Sales Index (E: -3.0%) and one Fed official scheduled to speak: Bostic (10:45 a.m. ET) but neither should move markets.
The main focus of the market today will be Biden’s two-part infrastructure plan which is expected to top $4T total and how the Administration and Congress plan to pay for it (higher taxes). If the plans push yields higher, expect some pressure on equities with tech underperforming however stocks are also susceptible to volatility linked to end of month/quarter positioning today.
What’s in Today’s Report:
Stock futures are mixed as investors continue to digest the Archegos liquidation drama and look ahead to Biden’s infrastructure plans due tomorrow while yields rose overnight.
The 10 year Treasury yield rose by as much as 5 basis points overnight, reaching fresh 52-week highs which is weighing on Nasdaq futures this morning (down 0.40%).
Economic data was mostly positive overnight with Japanese Retail Sales and Eurozone Economic Sentiment both topping estimates which is supporting modest risk-on and reflationary money flows this morning.
Looking into today’s session, there are two reports on the housing market due out before the open: Case-Shiller Home Price Index (E: 1.2%) and FHFA House Price Index (E: 1.0%) and then Consumer Confidence (E: 96.4) after the bell, however none of the releases should materially move markets.
There are also a few Fed officials scheduled to speak: Quarles (9:00 a.m. ET), Bostic (12:00 p.m. ET) and Williams (2:00 p.m. ET) but they are largely expected to stick to the very dovish narrative of recent.
Today, market focus is likely to return to the bond markets given the sizeable move higher in yields overnight which is already pressuring Nasdaq futures. And if the rise in yields continues over the course of the day, expect renewed pressure on tech shares which will likely weigh on the broader stock market.
What’s in Today’s Report:
Futures are modestly lower following a generally quiet weekend as markets reverse Friday’s late day rally amidst concern about forced selling due to a hedge fund failure.
Archegos Capital was unable to make margin calls last week which resulted in losses and Nomura and Credit Suisse, and that’s causing some mild anxiety about more potentially forced selling looming in the equity markets.
There were no notable economic reports overnight.
Today there are no notable economic reports and just one Fed speaker, Waller (11:00 a.m. ET). So, focus will be on any perceived fallout from the Archegos Capital failure and if there’s any forced selling appearing in certain stocks (if there is, it could weigh temporarily on the entire market).
“I think what we’ve seen over the past couple days is some end-of-quarter…” Tom Essaye, Sevens Report Research founder, told Yahoo Finance. Click here to read the full article.
Tom Essaye, an analyst at Sevens Report Research, stated that “I think what we’ve seen over the past couple days is some end-of-quarter positioning. The best performers quarter-to-date are getting sold right now…” Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher following a quiet night, mostly on momentum from Thursday’s strong U.S. market close.
Economic data was mixed as UK Retail Sales missed estimates (2.1% vs. (E) 2.3%) while the German Ifo Business Expectations survey beat (100.4 vs. (E) 95.0).
Politically, Biden’s press conference revealed nothing new and market focus is now on the details of the looming infrastructure spending/tax hike plan (out this Wednesday).
Today focus will be on the Core PCE Price Index (E: 1.5%) which is the Fed’s preferred measure of inflation. If that number runs “hot” and more towards 2.0% yoy, expect more upward pressure on the 10 year Treasury yield (which is up four basis points this morning to 1.67%). If the 10 year yield breaks above 1.70%, that will likely be a headwind on stocks today. The other notable number is Consumer Sentiment (E: 83.5), but unless inflation expectations spike, the number shouldn’t move markets.
“This is the first bull market that any of us have been through where it’s been essentially manufactured by the government and by the Fed,” said Tom Essaye, founder of Sevens Report. Click here to read the full article.
What’s in Today’s Report:
U.S. equity futures are trading higher this morning as upbeat economic data is helping offset renewed fears about COVID-19 lockdowns and the global economic recovery.
PMI Composite Flash data was better than expected overnight, especially in the EU (52.5 vs. E: 49.1) where economic lockdown concerns have weighed heavily on stocks this week.
Looking into today’s session, there are two economic releases that will be in focus early: Durable Goods Orders (E: 0.9%) and the PMI Composite Flash (E: 59.0), and it is important that we see more positive trends in the data or concerns about a slowing recovery could become a stronger headwind on risk assets in the near term.
From there, focus will shift to this week’s busy Fed circuit with several more central bank officials speaking today: Barkin (8:50 a.m. ET), Powell (10:00 a.m. ET), Williams (1:35 p.m. ET), and Daly (3:00 p.m. ET). Powell and Yellen’s continued testimony before Congress today will be the most important for stocks as investors look for further reiteration of easy policy measures for the foreseeable future.
Finally, there is a 5-Yr Treasury Note Auction at 1:00 p.m. ET and as we saw last month, a surprise outcome can shake bond markets which ultimately tends to reverberate through to equities.
Bottom line, as long as there are no surprises in the auction or in the morning economic data, and policy makers stick to their accommodative message, volatility should begin to ease, but all of the possible catalysts listed above have the potential to weigh on stocks and other risk assets today.
What’s in Today’s Report:
Stock futures are tracking global shares lower this morning as a rebound in COVID-19 cases has prompted new lockdowns in Europe while vaccine news was negative o/n.
A WSJ article released earlier today suggested that AstraZeneca vaccine trial data may have been “incomplete.” AZN shares are down 2.5% in the pre-market as further reviews mean a likely delay in U.S. approval of the vaccine.
Looking into today’s session, there is just one economic report due to be released: New Home Sales (E: 875K) but as was the case with yesterday’s housing market data, it shouldn’t move broader equity markets.
That will leave markets focused on the very long list of Fed speakers today: Bullard (9:00 a.m. ET), Bostic (10:10 a.m. ET), Barkin (11:00 a.m. ET), Powell (12:00 p.m. ET), Brainard (1:25 p.m., 3:45 p.m. ET), and Williams (2:45 p.m. ET).
As long as there are no hawkish surprises from Fed officials, and 10-year yields continue to pull back as they are in early trading, the morning weakness in equities should not materially accelerate over the course of the day.