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Do Lower Rates Mean Better Stock Returns?

What’s in Today’s Report:

  • Do Lower Rates Mean Better Stock Returns?
  • Another Bad Signal from the Yield Curve

Stock futures are moderately lower this morning as the less-dovish money flows in the wake of the June jobs report continue while multiple companies, notably BASF, have issued profit warnings so far this week.

Economically, the NFIB Small Business Optimism Index fell to 103.3 vs. (E) 104.5 in June as survey responses showed broad weakness in earnings and sales expectations which is further weighing on investor sentiment ahead of earnings season.

Today, there is just one economic report to watch: JOLTS (E: 7.40M) however there are multiple Fed officials scheduled to speak: Bullard (10:00 a.m. ET), Bostic (1:00 p.m. ET), and Quarles (2:00 p.m. ET).

With focus already largely shifting to Powell’s testimony before congress tomorrow and Thursday, investors will be watching today’s Fed speakers closely for any further clues on future policy following Friday’s strong jobs headline.