What’s in Today’s Report:
- Wildcard to Watch: Powell’s Press Conference
- Employment Cost Index Takeaways
- Key Technical Levels to Watch in the Wake of the Fed – Chart
Global markets are rallying on the back of favorable economic data in Europe while large cap tech shares are dragging U.S. futures lower following dismal SNAP earnings (shares of the company are down ~15% in pre-market trading).
Economically, the Eurozone Manufacturing PMI met estimates at 48.8 while the HICP Flash (their CPI) cooled to 8.5% vs. (E) 9.1% which is being received as mildly dovish ahead of this week’s all-important central bank meetings.
Looking into today’s session, we will get our first look at January jobs data with the ADP Employment Report (E: 158K) ahead of the bell while JOLTS (E: 10.2 million) and the ISM Manufacturing Index (E: 48.0) will be released at the top of the 10:00 a.m. hour ET.
From there focus will shift to the Fed with the FOMC Decision at 2:00 p.m. ET (E: +25 bp to 4.50% – 4.75%) followed by Powell’s Press Conference at 2:30 p.m. ET.
There are also a few notable earnings releases to watch today: TMUS ($1.39), META ($2.12), and ALL (-$1.37).
Bottom line, investors will be looking for further moderation in the morning economic data but not a sharp drop off indicating a deep recession looming while an as-expected or dovish Fed decision and press conference would likely see January’s gains extended in the afternoon. Conversely, a hawkish press conference (like the Jackson Hole speech in August) would very likely trigger a surge in volatility into the final hour of the day.