What’s in Today’s Report:
- Five Catalyst To Determine the Year
- EIA Analysis and Oil Update
Futures are modestly lower as markets digest the recent rally.
Concerns about China (both trade and the economy) are the most cited reason for the mild dip this morning but nothing materially negative occurred overnight.
Economically, Japanese retail sales beat estimates (1.5% vs. (E) 1.2%) while Euro Zone Economic Sentiment slightly missed expectations (111.6 vs. (E) 112.0).
Today markets will be looking for any official news on Canada joining the U.S./Mexico trade deal (it’s not expected but possible).
Beyond those trade-related headlines, the most important event today will be the Core PCE Price Index (E: 0.2% m/m, 2.0% y/y) contained in the Personal Income and Outlays Report. Slowly accelerating inflation remains a key pillar in the bull thesis on this market, and if we see a core PCE Price Index materially above 2% (say 2.2% or higher) that will push the dollar and yields higher, and likely be a headwind on stocks.