The data, however, also showed “some evidence of improving consumer demand for refined products,” said Tyler Richey, co-editor of Sevens Report Research, with the four-week moving average of gasoline supplied up by just over 200,000 barrels a day to 8.3 million barrels a day. Click here to read the full article.
Now, Tom says, that ‘bear market rally’ is complete—having fooled enough people into thinking the bear market was over—and predicts more volatility and turbulence ahead with the big moves in tech to lead the major US indices lower. Click here to listen to the full interview.
“Global bond yields moved higher after Nikkei reported Kazuo Ueda will become the next BOJ governor, and not the ultra-dove Masayoshi Amamiya (who was expected),” wrote Sevens Report’s Tom Essaye. Click here to read the full article.
Tom Essaye, founder and president of Sevens Report Research and Andrew McCreath, founder at Forge First Asset Management, join BNN Bloomberg to discuss the latest large-cap earnings reports. Essaye says that Uber’s strength this season is a signal that life is getting back to normal and discusses how diversification will be imperative for companies to succeed amid the growth slowdown. Click here to watch the full interview.
“The spike in the 2-year yield tells us the market is now believing the Fed when it has been saying it’s going to raise rates close to or above 5%, notably, it wasn’t Powell’s commentary that got the market to believe that — it was the economic data from Friday, notably the jobs report and ISM Services PMI,” Essaye said, the founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed following a mostly quiet weekend of news as markets look ahead to tomorrow’s CPI report.
The only notable economic report overnight was better than expected growth and inflation updates from the European Commission, who now sees EU growth rising 0.9% this year (up from 0.3%) and inflation at 5.6% (down from the previous 6.1%). These revised estimates are helping to bolster the “No Landing” economic scenario.
Markets should mostly be in a holding pattern today as the CPI report looms tomorrow morning, but there are two notable events on the calendar to watch: New York Fed Inflation Expectations (One Year: 5.0%, Five-Year: 2.4%) and one Fed speaker: Bowman (8:00 a.m. ET). If inflation expectations are higher than before or Bowman is hawkish, that could mildly pressure stocks.
What’s in Today’s Report:
Futures are modestly weaker following a rally in oil prices and a continued rise in bond yields overnight.
Oil rallied 2% after Russia announced it was voluntarily reducing output by 500k bpd while OPEC+ did not signal any intention to increase output to offset the reduction.
Global bond yields moved higher after Nikkei reported Kazuo Ueda will become the next BOJ governor, and not the ultra-dove Masayoshi Amamiya (who was expected).
Today focus will remain on the data and specifically University of Michigan Consumer Sentiment (E: 65.0) and the inflation expectations in the report (any further decline will be positive for stocks). We also get two Fed speakers: Waller (12:30 p.m. ET) and Harker (4:00 p.m. ET) and markets will want to see if they echo the hawkish tone from regional Fed presidents this week.
What’s in Today’s Report:
Futures are enjoying a moderate bounce overnight thanks to slightly better than expected inflation data and earnings.
German CPI rose less than expected (8.7% vs. (E) 9.1%) and that’s helping to slightly calm fears of a bounce back in inflation.
Earnings overnight were also solid as DIS beat estimates and it’s fair to say this earnings season has been not as bad as feared.
Focus will remain on economic data and the only notable report today is Jobless Claims (E: 190K). Holiday effects should be working their way out of these numbers so investors will want to see claims begin to rise over the coming weeks, otherwise it’ll imply the labor market remains much, much too tight (and that means more potential future rate hikes).
Earnings season is winding down but some notable reports today include: PM ($1.29), PYPL ($1.20), LYFT ($0.13).
What’s in Today’s Report:
Futures are moderately lower this morning as investors continue to digest Powell’s commentary from yesterday which was largely viewed as another missed opportunity to push back on recent dovish money flows across markets.
Looking into today’s session there are no notable economic reports but a slew of Fed speakers that could move markets. In chronological order, we will hear from: Williams (9:20 a.m. ET), Cook (9:30 a.m. ET), Bostic (10:00 a.m. ET), Kashkari (12:30 p.m. ET), and finally Waller (1:45 p.m. ET).
Additionally, the Treasury will hold a 10-Yr Note auction at 1:00 p.m. ET and seeing as yesterday’s dismal 3-Yr auction sent the S&P 500 to session lows, the outcome could very well move markets today.
Finally, Q4 earnings season continues today with a few notable companies releasing results: UBER (-$0.21), CVS ($1.92), DIS ($0.80).
What’s in Today’s Report:
Stock futures are little changed while the dollar and Treasuries are steady following a quiet night of news as traders await Powell’s speech today.
Economically, German Industrial Production fell -3.1% vs. (E) -0.6% in December which is rekindling recession worries this morning and helping support the stabilization in bond markets.
Looking into today’s session focus will be on Powell’s speech at 12: 40 p.m. ET as traders brace for the Fed Chair to potentially push back on the market’s dovish reaction to last week’s FOMC decision, something that happened multiple times in 2022 sparking big waves of volatility across asset classes each time.
Expectations for Powell’s speech have already become more hawkish since the January jobs report, however, so he would need to be explicit and firm about raising rates beyond 5% and not cutting rates in 2023 to cause a meaningfully hawkish reaction.
Beyond Powell, there are two lesser followed economic reports to watch: International Trade in Goods Services (E: -$68.8B) and Consumer Credit (E: $25.0B) although neither should have a material impact on markets while the Fed’s Barr also speaks this afternoon (2:00 p.m. ET).
There is a 3-Yr Treasury Note auction at 1:00 p.m. ET and the outcome will offer some evidence of bond traders’ initial take on Powell’s comments. If the auction tails significantly, expect some hawkish follow-through money flows into the afternoon.
Finally, earnings season continues with a couple of notable reports after the close today: CMG ($8.88) and PRU ($2.57).
