Market Multiple Table: January Update
What’s in Today’s Report:
- Market Multiple Table – January Update: Still More Optimistic Than Fundamentals Warrant
S&P 500 futures are trading with modest losses this morning as investors digest positive economic news out of Europe ahead of Powell’s speech today.
In Europe, French Industrial Production rose 2.0% vs. (E) 0.8% in November while GS dropped their Euro-area recession call for 2023 bolstering market hopes for a soft landing.
Domestically, the NFIB Small Business Optimism Index fell to 89.8 vs. (E) 91.3 which is weighing modestly on sentiment in pre-market trading.
There are no additional economic reports in the U.S. today which will leave investors focused on any insight Fed Chair Powell offers on either the economy or monetary policy plans when he speaks in Sweden at a Riksbank symposium beginning at 9:00 a.m. ET.
Hawkish Fed speak out of Daly and Bostic is what caused stocks to reverse early gains and close lower yesterday, so if Powell strikes a hawkish tone and pushes back against the market’s latest optimism for a lower terminal rate (below 5%), that could see stocks extend yesterday’s afternoon selloff and the market give back some or all of Friday’s post-jobs report gains.
Finally, The Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET that could signal the bond markets response to Powell (if he even says anything notable). A weak outcome to the auction and rising yields could amplify any hawkish money flows and result in more broad market volatility.
