Is Canada the Biggest Trade Winner?
Is Canada the Clear Winner from the New NAFTA? S&P futures are decidedly lower while most international markets were down overnight thanks to Italian political/budget fears, the 2.4% budget deficit Italy proposed to the EU was not well received yesterday, there are no notable US economic reports but there are two Fed speakers to watch: Quarles (10:00 a.m. ET), and more importantly Chair Powell (12:00 p.m. ET) and more.
A Big Week for Economic Data (And It Needs to Be Good)
Today the key economic report is the September ISM Manufacturing PMI (E: 59.9). That number needs to remain firm to help support stocks, more broadly, while futures are higher on the U.S./Canada trade news, that’s unlikely to spur a sustainable rally for two reasons: First, a U.S./Canada deal was always expected, so this isn’t a real surprise. Second, the big trade wildcard, China, saw things get incrementally worse over the weekend with the cancellation of the security meeting. Bottom line, I’ll be surprised and impressed if this early Canada related rally can hold throughout the day.
Two Steps Forward, One Step Back
The official Italian budget produced a deficit of 2.4% of GDP, larger than hoped by markets. The euro extended its loses from Thursday and German bund yields declined following the announcement and more.
Fed Takeaways
Today there are multiple economic reports including Durable Goods Orders (E: 2.2%), Final Q2 GDP (E: 4.3%), Jobless Claims (E: 216K) and Pending Home Sales (E: 0.0%) as well as two Fed speakers, Kaplan (2:00 p.m. ET), Powell (4:30 p.m. ET). But, Powell just spoke at length yesterday so he shouldn’t say anything too surprising. Meanwhile, unless we get a very disappointing Durable Goods report, the economic data shouldn’t move markets.
Fed Wildcard to Watch
Today, the main market focus will be the Fed Events: FOMC Announcement and Forecasts (2:00 p.m. ET), Fed Chair Press Conference (2:30 p.m. ET) although, there is also one economic report out in the U.S. this morning: New Home Sales (E: 630K), stock futures are slightly positive this morning and more.
Tom Essaye Quoted in Fox Business on September 25, 2018
The Federal Reserve appears ready to hike interest rates Wednesday for the third time this year, as the central bank responds to rising inflation and robust hiring by U.S. employers. “Something pretty significant would have to happen for the Fed not to hike in December,” said Tom Essaye, founder and editor of The Sevens Report.
Sentiment Update: Bullish Enthusiasm Reduced, But Not Eliminated
/in Investing, Reports/by Tom EssayeWhat’s in Today’s Report: Sentiment Update: Bullish Enthusiasm Reduced, But Not Eliminated