We need to see more proof those Keys to the Bottom are becoming more likely for stocks to move materially higher from here…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
Since those lows near 3,800 in the S&P 500 there has been real progress: China is reopening and hopefully the economy will be close to operating at near-full capacity within a month. That will add a large tail-wind to the global economy, and perhaps most importantly, ease supply chain stress…Tom Essaye of the Sevens Report said in a note. Click here to read the full article.
What’s in Today’s Report:
Stock futures are modestly lower this morning as bond yields continued to rise overnight thanks to a more hawkish than expected central bank decision.
The RBA raised rates by 50 bps vs. (E) 40 bps overnight citing elevated inflation pressures which have rekindled fears about more aggressive monetary policy globally.
Meanwhile, economic data was soft as German Manufacturers Orders fell -2.7% vs. (E) 0.5% which underscores the recent loss of momentum in economic growth.
Looking into today’s session, there is just one economic report: International Trade in Goods (E: -$90.2B) which is not likely to materially move markets while no Fed officials are scheduled to speak.
That will leave investors focused on the latest move higher in yields as that was the main reason for the steady fade in stocks yesterday. To that point, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET that could move the bond market, and for stocks to move higher today, we will need to see yields level out.
Tom Essaye of the Sevens Report noted that “very strong data would incur more Fed hawkishness while really soft data would spike stagflation concerns — and ‘moderating’ was just what we got from the ADP jobs report.” Click here to read the full article.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report told CNBC. Click here to read the full article.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases, because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report said. Click here to read the full article.
What’s in Today’s Report:
Futures are solidly higher thanks to positive news from China.
The economic reopening in China progressed over the weekend as COVID cases continued to decline, authorities relaxed more restrictions in Beijing, and none of the fifty largest cities in China have intense restrictions in place.
Also in China, the WSJ reported authorities may soon end their probe into Didi, and that might also signal an end to the government crackdown on Chinese tech stocks (if so that’d be a major positive for Chinese tech names and a peripheral positive for tech stocks more broadly).
Today there are no notable economic reports or Fed speakers, so it should be a generally quiet day of news. Across the pond, UK Prime Minister Johnson faces a “no confidence” vote in Parliament, but he’s expected to survive it (if he doesn’t, that could be a surprise negative for stocks today but again that is unlikely).
What’s in Today’s Report:
Futures are slightly lower following a generally quiet night of news as markets look ahead to today’s jobs report.
Economic data from Europe underwhelmed as Euro Zone Services PMI declined to 56.1 vs. (E) 56.3 while Euro-Zone Retail Sales missed estimates, falling –1.3% vs. (E) 0.4%.
Elon Musk made cautious comments saying he had a “super bad” feeling about the economy in a Reuters interview.
Today’s focus will be on the Jobs Report and expectations are as follows: Job Adds (E: 325k), UE Rate (E: 3.5%), Wages (E: 0.4% m/m & 5.3% y/y). As long as data shows “moderation” in the labor market (so a positive number but in the lower part of the range) then stocks can extend Thursday’s rally. Other data today includes ISM Services PMI: 56.3, and we get one Fed speaker: Brainard (10:30 a.m. ET).
What’s in Today’s Report:
Futures are modestly higher following a soft EU inflation reading and on reports, OPEC members may increase oil production.
Euro Zone PPI undershot expectations (1.2% vs. (E) 2.3%) offering some hope that inflation in the EU is peaking.
Oil is down 2.5% after Saudi Arabia said it may increase oil production to make up for any Russian shortfall.
Today’s focus will be on the economic and inflation data including, in order of importance: ADP Employment Report (E: 240k), Unit Labor Costs (E: 11.6%), and Jobless Claims (E: 210k). If the data is “Goldilocks” then this early rally can continue. Finally, there are two Fed speakers today, Logan (12:00 p.m. ET) and Mester (1:00 p.m. ET), with the latter more important (and if she’s hawkish that will weigh on sentiment).
What’s in Today’s Report:
Futures are little changed following a quiet night of news.
Economic data was mixed as final May manufacturing PMIs were in-line with expectations for the EU and UK, although German Retail Sales missed estimates (–5.4% vs. (E) -0.1%).
On the Fed front, Bostic said his comments about a “pause” on rate hikes shouldn’t be interpreted that the Fed will help rescue volatile markets.
Today focus will be on economic data and Fed speak via the ISM Manufacturing PMI (E: 54.5), JOLTS (E: 11.40M) and comments by Williams (11:30 a.m. ET) and Bullard (1:00 p.m. ET). Bottom line, the ideas of slowly moderating (but not collapsing) growth and the possibility for a Fed “pause” in rate hikes in late summer/early fall have helped stocks rally, and as long as today’s data and Fed speak don’t refute those possibilities, stocks can extend the recent rally.