The selling is technical and emotions (fear/greed) that are driving the markets on an intraday basis and we should all prepare for more elevated volatility ahead…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
There is a tentative sense of relief in markets this morning with stock futures tracking global equities higher while bond yields and the dollar pullback ahead of key inflation data in the U.S. today.
Economically, Chinese CPI and PPI were both hotter-than-expected however German CPI met estimates of 7.4% y/y which is giving investors hope that price pressures are still high but in the process of peaking.
Looking into today’s session investors will be primarily focused on the CPI report (E: 0.2% m/m, 8.1% y/y), and more specifically the Core CPI figures (E: 0.4% m/m, 6.0% y/y).
We will also hear from one Fed speaker: Bostic (12:00 p.m. ET), and there is a 10-Yr Treasury Note auction at 1:00 p.m. ET.
Bottom line, if today’s inflation data comes in below expectations, it will likely bolster this morning’s already solid gains in stock futures and lead to a further relief rally. Conversely, if inflation runs hot, expect more volatility across asset classes and the potential for new lows in the major equity indices.
What’s in Today’s Report:
Stock futures are trading with tentative gains this morning as yesterday’s steep declines are digested after a mostly quiet night of news.
Economically, data overseas was slightly better than feared (specifically Economic Sentiment within the German ZEW Survey) while the NFIB Small Business Optimism Index in the U.S. held steady at 93.2, topping estimates of 92.9.
There are no notable economic reports today but there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and if the results help the bond market stabilize, that could help equities bounce today.
Finally, there are a slew of Fed speakers today including: Williams (7:40 a.m. ET), Bostic (8:30 a.m. ET), Barkin (9:15 a.m. ET), Kashkari (1:00 p.m. ET), and Mester (3:00 p.m. ET). If they collectively strike a “less-hawkish” tone, that could also help fuel a relief rally in stocks today.
What’s in Today’s Report:
Futures are sharply lower following new COVID lockdowns in China.
COVID cases in Shanghai are rising again, prompting new restrictions on movement and work. Meanwhile, Beijing continues to suffer from limited lockdowns and this is compounding worries about global economic growth.
Geo-politically, Victory Day in Russia offered no notable news and there remains no end in sight to the Ukraine war.
Today there are no economic reports and just one Fed speaker, Bostic at 8:45 a.m. ET. So, we should expect technicals to dominate trading and if last week’s intra-day lows are broken in the S&P 500 and we don’t get any positive news on 1) Fed hawkishness, 2) Chinese lockdowns or 3) Russia/Ukraine, we should not be shocked if the S&P 500 move closer to a test of support at 4,000.
What’s in Today’s Report:
Futures are moderately lower following underwhelming earnings and guidance from AMZN and AAPL.
AMZN results underwhelmed the street (especially margins) while APPL beat earnings but had cautious guidance for Q2 based on supply chain issues.
Economically, inflation pressures remained high as core EU HICP (their CPI) rose 3.5% yoy vs. (E) 3.1%.
Today focus will be on inflation as we get two important readings: Core PCE Price Index (E: 0.3%, 5.3%) and the Employment Cost Index (E: 1.1%). Markets will want to see the actual numbers miss estimates, and in doing so further hint at a peak of inflation. If the opposite happens (the numbers are hotter than estimates) that will further pressure stocks. We also get Consumer Sentiment (E: 65.6) and the Inflation Expectations sub-index will be watched closely.
On the earnings front, some important results today include: XOM ( $2.25), CVX ($3.44), CL ($0.74).
What’s in Today’s Report:
Stock futures are attempting to stabilize this morning while global shares were mixed overnight as traders assess the latest economic data ahead of today’s unofficial start to Q1 earnings season and another important U.S. inflation print.
Economic data was negative and again pointed to stagflation overnight as Japanese Machine Orders plunged -9.8% vs. (E) -1.5% while U.K. CPI jumped to 7.0% vs. (E) 6.7%.
Today is lining up to be a very busy session from a news flow and catalyst standpoint as we kick off Q1 earnings season with reports from: JPM ($2.73), BLK ($8.92), and DAL (-$1.33) ahead of the bell. Investors will be looking for solid results to confirm the strength and resilience of corporate America.
Then we will get the March PPI report at 8:30 a.m. ET (E: 1.1%, 10.6%), but as long as the headlines are not materially hotter than expected, and the “core figures” are in line with estimates, stocks could mount a relief rally as the market has become near-term oversold.
In the afternoon, there is one Fed speaker: Barkin (12:30 p.m. ET) as well as a 30-Yr Treasury Bond auction at 1:00 p.m. ET. And if bond yields hold below the highs from earlier this week, that should be an additional tailwind for stocks today, especially the beaten-down tech sector.
What’s in Today’s Report:
Futures declined overnight as the 10-year topped 2.80% with a focus on today’s CPI report but yields have since pulled back and futures are trading effectively unchanged.
Economically, the Japanese PPI was hot (9.5% vs. E: 9.3%) and the U.S. NFIB Small Business Optimism Index missed estimates (93.2 vs. E: 95.0), neither of which are helping trader sentiment today.
Geopolitically, Russia was accused of using chemical weapons in Ukraine, which would be a significant escalation if true, but that information has not been substantiated yet.
Looking into today’s session, focus will be on economic data early with CPI (E: 1.1%) due out ahead of the bell. If the core number comes in below estimates, that could offer the market some relief and spark a reversal higher.
Then attention will turn to the Fed as Brainard speaks over the lunch hour (12:10 p.m. ET) and Barkin is scheduled to speak after the close (5:30 p.m. ET). Brainard’s comments will be closely watched as her hawkishness last week caused rates to surge higher and stocks to selloff.
Finally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET which will offer some fresh insight to demand for Treasuries amid the latest surge in yields. And if the auction is solid, that could also help yields pullback and stocks rebound.
What’s in Today’s Report:
Futures are moderately lower as a meeting between the Russian and Ukrainian foreign ministers yielded no additional progress towards peace.
Russia and Ukraine’s foreign ministers met in Turkey for over an hour, but there were no tangible breakthroughs made towards a lasting case-fire.
That lack of progress aside, the tone of the meeting was partially positive and a path towards peace appears to be slowly forming.
Today focus will be on the ECB Announcement (7:45 a.m. ET, press conference at 8:30 a.m. ET) and CPI (E: 0.7% m/m, 7.9% y/y).
Regarding the ECB, the key question is “how dovish is Lagarde?” in her comments, given the economic risks to Europe from the war. The market has priced in that she will be quite dovish, so there is a risk of a mildly hawkish surprise.
Regarding inflation, the number to watch is 8%. If CPI prints above 8% y/y, that will show inflation pressures are not receding and given exploding commodity prices, that means higher inflation for longer, which will likely make the Fed more aggressive on rate hikes (although a 50 bps hike next week is still unlikely).
Finally, we also get Jobless Claims (E: 218K) but that’s shouldn’t move markets,
What’s in Today’s Report:
Futures are moderately weaker mostly on momentum from Thursday’s selloff and despite some reassuring commentary from Fed officials overnight.
Fed Presidents Daly and Barkin both pushed back on the idea of a 50 basis point rate hike in March, countering the hawkish commentary from Fed President Bullard.
Economic data was mixed as German CPI met estimates (4.9% y/y) while UK GDP and Industrial Production both slightly missed estimates.
Today there are no notable economic reports and no Fed speakers scheduled, so focus will be on Consumer Sentiment (E: 67.5) and specifically the inflation expectations indices. If one year and five year inflation expectations can decline, that will help ease some inflation concerns and could spark a rebound later this morning.
What’s in Today’s Report:
Futures are slightly lower following Wednesday’s rally and ahead of this morning’s CPI report.
Governments and central banks pushed back a bit overnight on the global hawkish narrative as the European Commission predicted inflation would return to 1.7% yoy in 2023 while the Swedish National Bank was dovish in its commentary (no rate hikes or QT anytime soon).
Economic data was sparse overnight although Chinese money supply did beat estimates, reflecting the continued accommodation in that economy.
Today the key event is the CPI Report (E: 0.5% m/m and 7.3% y/y) and an in-line or smaller than expected increase will likely spur a further rally in stocks as markets try and price in a “not as hawkish as feared” Fed (although we’d be skeptical of that rally – more on that in the Report). We also get Jobless Claims (E: 230K) and one Fed speaker this evening: Barkin at 7:00 p.m. ET.