What’s in Today’s Report:
- Bottom Line – Incremental Positive Developments, But Not Enough for a Bottom
- Industrial Production Takeaways
- Chart: 5-Yr Breakevens Continue to Trend Lower Amid Confidence in the Fed
- Housing Market Index Underscores Cooling Real Estate Market
Futures are slightly higher in more cautious trade this morning as strong earnings from NFLX (+14%) and UAL (+3%) are helping offset hot inflation data overseas.
UK CPI rose 0.2% to 10.1% vs. (E) 10.0%, revisiting a 40-year high which is bringing inflation back into focus today.
From a catalyst standpoint, there is one economic report to watch today: Housing Starts (1.475M), and two Fed speakers to watch: Kashkari (1:00 p.m. ET) and Evans (6:30 p.m. ET).
There is also a 20-Yr Treasury Bond Auction at 1:00 p.m. ET. If yields rise in the wake of the auction, that could once again weigh on equities.
Finally, earnings continue with: ALLY ($1.73), PG ($1.55), CFG ($1.21), and WGO ($2.99) reporting ahead of the bell, and TSLA ($1.01), IBM ($1.78), AA ($0.09), and PPG ($1.67) releasing their results after the bell.
Bottom line, there have been some incremental fundamental positives that have helped support the relief rally in stocks this week, and if fixed-income markets can remain orderly and earnings continue to surprise to the upside, the S&P 500 could continue towards 3,800 or beyond today.