Is the Trade War Optimism Warranted?

What’s in Today’s Report:

  • Is Rising Optimism Towards “Phase One” of the U.S.-China Trade Deal Warranted?

Futures are little changed while most international markets rallied overnight as investors remain optimistic about the “phase one” trade deal, continue to eye the fluid Brexit situation, and look ahead to the peak of earnings season.

There were no market-moving headlines overnight.

There are a lot of moving pieces in the market today between economic data and earnings.

On the data front, Existing Home Sales (E: 5.445M) is due out shortly after the open and then things will quiet down until the early afternoon when the Dallas Fed’s Kaplan speaks at 1:00 p.m. ET.

There is also a 10-Yr Treasury Note Auction at 1:00 p.m. ET. Yields have been steadily grinding higher in recent sessions, so strong demand (low yields) could weigh on stocks in the afternoon.

Switching to earnings, there are multiple consumer, defense, and transport companies reporting today including: LMT ($5.03), MCD ($2.20), PG ($1.24), UPS ($2.05), UTX ($2.03), JBLU ($0.53), TRV ($2.39).

For now, the trend in stocks is cautiously positive, but any of the catalysts above could potentially trigger a pullback given the tentative nature of the latest rally.