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U.S./China Trade Update (What’s Priced In Now?)

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What’s in Today’s Report:

  • U.S./China Trade Update:  What’s Priced in Now?
  • One More Important Stat on Corporate Buybacks

Futures are modestly higher as the Chinese Ministry of Commerce  said the U.S. and China have agreed to existing tariff reduction in “phases.”

There were no further details on the timing or conditions that would accompany tariff reduction, however, and that’s tempering the rally somewhat.

Economically, German Industrial Production declined but slightly beat estimates (-0.6% vs. (E) -0.7%).

Today the only notable economic reports are Jobless Claims (E: 220K) while we also have two Fed speakers: Kaplan (1:05 p.m. ET), Bostic (7:10 p.m. ET), but none of that should move markets.

Instead, the focus will remain on the U.S./China trade, and if the U.S. confirms this “tariff reduction in phases” statement by the Chinese, then we could see the S&P 500 make a run at 3100.

How Corporate Buybacks Are Skewing EPS Statistics

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What’s in Today’s Report:

  • How Share Buybacks Are Skewing EPS Statistics

S&P futures are flat after a quiet night of mixed trading overseas as investors digest mostly positive economic data.

The Japanese PMI Composite was the only report to miss overnight as German Manufacturers’ Orders jumped 1.3% vs. (E) 0.2% while the EU Composite PMI edged up to 50.6 vs. (E) 50.2 and EU Retail Sales rose 3.1% vs. (E) 2.7% year over year.

On balance, the data was slightly hawkish from a monetary policy standpoint but is importantly easing global growth concerns.

Today, there is one economic report to watch: Productivity and Costs (E: 1.1%, 2.2%) and three Fed officials are scheduled to speak: Evans (8:00 a.m. ET), Williams (9:30 a.m. and 6:30 p.m. ET), and Harker (3:15 p.m. ET).

With limited catalysts on the calendar, the market will likely remain focused on the trade war and any incremental developments, negative or positive, will move stocks today.