Cutting Through the Policy Headline “Noise”
What’s in Today’s Report:
- Market Implications of Recent Policy Headlines
- A Closer Look at Credit Card Limits and Defense Company Shareholder Return Policies
Futures are lower thanks to ongoing geopolitical tensions overseas and “Fed independence” concerns ahead of a key U.S. inflation report due ahead of the bell as well as the unofficial start of earnings season today.
Economically, the NFIB Small Business Optimism Index firmed by 0.5 points to 99.5 vs. (E) 99.4 in December which is being viewed as a modest positive this morning.
Starting with the critical pre-market catalyst, investors will be focused on the release of December CPI (E: 0.3% m/m, 2.6% y/y) and the all-important Core CPI figure (E: 0.3% m/m, 2.7% y/y). An in-line to cooler-than-expected print would be ideal for the stock market rally to continue.
Shortly after the open, the delayed November New Home Sales data (E: 714K) will be released but is not likely to move markets as the report is dated at this point.
Looking into the middle of the day, the Treasury will hold a 6-Week Bill auction at 11:30 a.m. ET and a 30-Yr Bond auction at 1:00 p.m. ET. Strong auction results yesterday offered the market a modest tailwind, helping the S&P 500 end positive, so investors will be looking for more strong demand in today’s auctions.
With the Fed in focus amid the Trump-Powell drama from the weekend, the two Fed officials scheduled to speak today: Musalem (10:00 a.m. ET) and Barkin (4:00 p.m. ET) will likely be closely watched for any commentary regarding “Fed Independence.”
Finally, today marks the unofficial start to Q4’25 earnings season with quarterly results due from JPM ($5.01), DAL ($1.53), and BK ($1.97) and with rather optimistic earnings/revenue estimates for 2026, investors will be looking for strong results to support the equity rally.
