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What’s in Today’s Report:
- Will the Restart of Student Loan Payments Hurt the Economy?
Stock futures are lower with European shares after some hawkish ECB chatter and more bad EU economic data overnight.
The ECB’s Klass Knot noted overnight that a September rate hike is being “underestimated” by markets. This is weighing on risk assets modestly this morning.
Economically, German Manufacturers’ Orders collapsed by -11.7% vs. (E) -4.0% in July while Eurozone Retail Sales in July met estimates with a monthly decline of -0.2%. The data offered fresh evidence that the European economy is threatening to fall into recession despite ongoing calls for a global soft landing.
Today’s focus will be on economic data this morning with International Trade in Goods and Services (E: -$68.0B) and the ISM Services Index (E: 52.4) due to be released. The market is looking for signs of slowing demand but not a sharp downturn in growth.
The ISM will be the more important report to watch. If we get a number that is “too hot” or “too cold” will likely see yesterday’s stock market declines extended, while a Goldilocks print will help markets stabilize.
There is also one Fed speaker today: Collins (8:30 a.m. ET). If she pushes back on the peak rate narrative or rate cuts in 2024, that will add another headwind to stocks and other risk assets today.
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