How Bad Was Last Week for the Rally?

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What’s in Today’s Report:

  • Initial Thoughts on the Iranian Strikes on Israel
  • How Bad Was Last Week for the Rally
  • Weekly Economic Cheat Sheet – Growth Metrics in Focus

Stock futures are rebounding modestly from Friday’s steep selloff as geopolitical developments from the weekend were not as bad as feared leaving focus on the start to Q1 earnings season and key economic data this week.

Geopolitically, Iran attacked Israel with a series of well-telegraphed drone and missile strikes over the weekend, but most were intercepted. There were limited casualties and little damage so the situation is seen as “contained” for now, however, a retaliatory strike by Israel would be a negative development for risk assets.

Looking into today’s session, there are two important investment bank earnings reports due out ahead of the bell: GS ($8.54) and SCHW ($0.73). following Friday’s disappointing results from other major banks including JPM, investors will want to see good numbers.

Economically, we get several important data points today including the Empire State Manufacturing Index (E: -5.1), Retail Sales (E: 0.4%), and the Housing Market Index (E: 51). Data needs to come in Goldilocks, especially, Retail Sales as the last two reports missed estimates and have raised concerns about the health of the consumer. Otherwise selling pressure is likely to pick up again today.

Finally, there are two Fed officials speaking today: Williams (8:30 a.m. ET) and Daly (8:00 p.m. ET). Any less hawkish tone will be welcomed while “higher for longer” commentary will be negative for stocks and bonds (yields higher).

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