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Credit Spreads: Are We Seeing Liquidity Tightening?

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What’s in Today’s Report:

  • Credit Spreads: Are We Seeing Liquidity Tightening?

U.S. futures are solidly higher with European equity markets thanks to strong earnings from LVMH and ASML.

Economically, Eurozone Industrial Production fell -1.2% vs. (E) -1.6% m/m in August.

Today, there is one economic release to watch: the Empire State Manufacturing Index (E: -0.9) and a 4-Month Treasury Bill auction at 11:30 a.m. ET that could move short duration yields.

Additionally, today will be a busy day of Fed Speak with Miran (9:30 a.m. & 12:30 p.m. ET), Bostic (12:10 p.m. ET), Waller (1:00 p.m. ET), and Schmid (1:35 p.m. ET) all scheduled to deliver comments over the course of the day.

Finally, investors will remain keenly focused on earnings with quarterly reports due from ASML ($6.36), BAC ($0.94), MS ($2.08), PGR ($5.08), ABT ($1.30), UAL ($2.64), and JBHT ($1.48) today.

 

Volatility Reset or New Volatility Cycle?

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What’s in Today’s Report:

  • “Volatility Reset” or the Start of a New “Volatility Cycle?”
  • Silver Joins Gold at All-Time Highs

Markets are trading with a clear risk-off tone this morning amid a reescalation in trade tensions between the U.S. and China ahead of a slew of big bank earnings releases today.

Economically, the NFIB Small Business Optimism Index fell to 98.8 vs. (E) 100.5 in September but the Employment Subindex favorably rose for a fourth straight month which should help ease some labor market angst.

Looking ahead to today’s session, focus will remain on the trade war, specifically tensions between the U.S. and China, however, there are also two Treasury auctions (for 3-Month and 6-Month Bill at 11:30 a.m. ET) that could impact yields/Fed policy expectations and subsequently move equities.

Additionally, there are two Fed speakers on the calendar today: Bowman (8:45 a.m. ET) and Powell (12:20 p.m. ET). Obviously, any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today.

Finally, today marks the unofficial start of Q3 earnings season with several big banks/financials reporting quarterly results including: BLK ($11.25), JPM ($4.83), GS ($10.93), WFC ($1.55), and C ($1.83) as well as other notables: JNJ ($2.77), DPZ ($4.00).

 

The Sector Winner from a “Run-Hot” Economy

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What’s in Today’s Report:

  • The Sector Winner From a “Run-Hot” Economy
  • Pending Home Sales Takeaways

Futures are lower and bonds are rallying modestly amid the growing threat of a government shutdown this week.

Economically, China’s official Manufacturing PMI edged up 0.4 points to 49.8 vs. (E) 49.6 in September.

Today kicks off jobs week with the August JOLTS report (E: 7.100 million) due out shortly after the bell. The closer the headline is to estimates, the better as a too-hot or too-cold print could weigh on already shaky markets amid the government shutdown worries.

Additionally, Consumer Confidence (E: 96.0), the Case-Shiller Home Price Index (E: -0.2%), the FHFA House Price Index (E: 6.7%), and Chicago PMI (E: 43.5) will all be released today.

There are a handful of Fed speakers today: Collins (9:00 a.m. ET), Goolsbee (1:30 p.m. ET), and Logan (7:10 p.m. ET), and the more dovish their tone, the better for markets as two more rate cuts in 2025 are still largely priced in.

Finally, there are a few late-season earnings releases to watch: PAYX ($1.21), UNFI ($-0.22), NKE ($0.28).

 

New ETFs to Watch and AI-Bubble Update

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What’s in Today’s Report:

  • More Bubble Signs? OpenAI and NVDA Partnership
  • New ETFs for Your Watchlist

Futures are little changed as traders digest mixed EU Flash PMI data and await fresh comments from Fed Chair Powell today.

Economically, the EU Composite PMI Flash rose to 51.2 vs. (E) 50.9 with the Services Index notably rising to 51.4 vs. (E) 50.5 however the Manufacturing index disappointed.

Today, there are two economic reports to watch in the U.S., both of which will print shortly after the open: PMI Composite Flash (E: 53.0) and the Richmond Fed Manufacturing Index (E: -10).

The Fed’s speaker circuit will remain fairly busy today with Bowman (9:00 a.m. ET) and Bostic (10:00 a.m. ET) speaking this morning before focus will turn to commentary from Powell (12:35 p.m. ET) mid-day.

Additionally, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET that could move bond yields and ultimately impact equities if there are any surprises regarding demand metrics (the stronger the demand the better for stocks).

Finally, some late season earnings reports continue to trickle in with notables reporting today including AZO ($50.52) and MU ($2.69).

 

September Bitcoin Update and Outlook

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What’s in Today’s Report:

  • September Bitcoin Update and Outlook
  • What Yesterday’s CPI Means for Markets

Futures are slightly lower on mixed data and earnings overnight.

ADBE was the latest tech company to post earnings and the results were solid (beat on EPS and revenue and a guidance increase) but concerns about AI sapping demand for software kept gains modest (ADBE is up 3% pre-market).

Economically, data was mixed.  UK Industrial Production badly missed estimates (-1.3% vs. (E) 0.5%) while German CPI and UK Monthly GDP both met expectations.

Today the only notable economic report is University of Michigan Consumer Sentiment (E: 58.0) and focus will be on the inflation expectations.  As long as they don’t move sharply higher, it’ll cap a generally positive week for markets on the inflation front (which has been the main reason stocks are higher this week).

 

How ORCL Earnings Explain the Opportunities and Risks in AI

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What’s in Today’s Report:

  • How ORCL Earnings Explain the Opportunities and Risks in AI

Futures are slightly higher following a mostly quiet night of news as investors digested the better than expected PPI report and looked ahead to today’s all-important CPI.

Economically, the only notable number was Japanese PPI which was better than expected, rising 2.7% y/y vs. (E ) 2.8% y/y.  Japanese stocks rallied 1% in response.

Today brings the highlight of the week, CPI, and expectations are as follows:  0.3% m/m, 2.9% y/y.  A better-than-expected headline will solidify rate cut expectations and push back on stagflation concerns and that should be a solid market positive.  A “hot” number, however, will put three rate cuts before year-end in doubt and almost certainly pressure stocks.

Other events today include an ECB Rate Decision (E: No Changed), Jobless Claims (E: 234K) and some notable earnings reports:  KR ($1.00), ADBE ($4.21), RH ($3.20).

 

Market Multiple Levels: S&P 500 Chart

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What’s in Today’s Report:

  • MMT Levels S&P 500 Chart – September Update

Futures are solidly higher this morning thanks to strong tech earnings as traders await key U.S. inflation data.

ORCL shares are surging 30%+ in the pre-market as a measure of future revenue jumped $455B or 359% Y/Y in Q2 thanks to new AI-related cloud contracts.

Economically, Chinese CPI fell -0.4% vs. (E) -0.2% which is helping ease worries about a global resurgence in price pressures due to the trade war.

Today, trader focus will be on inflation data early with the August PPI report due out ahead of the bell (E: 0.3% m/m, 3.3% y/y).

After the open, the Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a 10-Yr Note auction at 1:00 p.m. ET and investors will want to see ongoing signs of strong demand for Treasuries to shore up increasingly dovish Fed expectations.

Finally, earnings season continues to wind down but there is one notable company reporting quarterly results today: CHWY ($0.14).

 

Market Technical Assessment: Bitcoin vs. Ethereum

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What’s in Today’s Report:

  • Market Technical Assessment:  Bitcoin vs. Ethereum

Futures are flat following very slightly underwhelming NVDA earnings amidst an otherwise quiet night of news.

NVDA beat earnings and revenue estimates but guidance didn’t meet very elevated expectations.  NVDA is down –2% pre-market but results weren’t disappointing enough to shake broader AI enthusiasm (so the slightly underwhelming NVDA earnings shouldn’t impact the broader market).

Today focus will be on economic data and the key report is Weekly Jobless Claims (E: 230K).  Claims jumped last week and if that continues this week we’ll see a small uptick in labor market anxiety ahead of next Friday’s jobs report (which could put a headwind on markets today).  Other economic reports today include Revised Q2 GDP (E: 3.1%) and Pending Home Sales (E: 0.2%) while we also have one Fed Speaker, Waller at 6:00 p.m. ET.  However, barring a major negative surprise, all of that is unlikely to move markets.

On the earnings front, the reports continue and important results we’re watching today include: BBY ($1.22), MRVL ($0.51) and DELL ($2.09).

 

Why NVDA Earnings Are So Important

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What’s in Today’s Report:

  • Why NVDA Earnings Are So Important
  •  Why Markets Shrugged Off the Trump-Cook Drama
  • Durable Goods and Case-Shiller Data Takeaways

Futures are flat after a mostly quiet night of news as global traders await AI-behemoth NVDA’s quarterly earnings (due out after the close today).

Economically, Australian CPI jumped from 1.9% to 2.8% vs. (E) 2.3% in July, the latest global inflation release to surprise to the upside which is adding to concerns about a resurgence in price pressures across major economies as a result of the trade war.

There are no noteworthy economic releases in the U.S. today and just one Fed official scheduled to speak: Barkin (12:00 p.m. ET).

There is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s solid 2-Yr auction results added a tailwind to the afternoon equity rally) with investors looking for more signs of strong demand.

With the limited list of catalysts today, markets should be quiet and trade with a positioning-style tone as investors await earnings from KSS ($0.33), ANF ($2.27), RY ($2.36), NVDA ($0.94), SNOW (-$0.57), HPQ ($0.75), and CRWD (-$0.19).

NVDA’s results will clearly be the primary focus as the chip-making giant accounts for roughly ~8% of the entire S&P 500; a miss could spark meaningful volatility while a positive surprise would likely see the major indexes make a run at all-time highs.

 

Is the NOB Spread Signaling a “Run Hot” Economy?

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What’s in Today’s Report:

  • Is the NOB Spread Signaling a “Run Hot” Economy?

Futures are in the red but off their overnight lows as traders digest President Trump’s latest efforts to “fire” Fed Governor Cook, rekindling “Fed independence” concerns.

Economically, French Consumer Confidence fell 2 points to 87 vs. (E) 89 in August while Prime Minister Bayrou has called for a confidence vote on September 8, surrounding budget concerns which introduces a renewed sense of market uncertainty in Europe.

Looking into today’s session there are multiple noteworthy economic reports to watch today including Durable Goods (E: -4.0%), Case-Shiller Home Price Index (E: 2.6%), FHFA House Price Index (E: 0.0%), and likely most importantly, Consumer Confidence (E: 96.4).

There is one Fed official scheduled to speak: Barkin (8:30 a.m. ET) as well as a 2-Yr Treasury Note auction at 1:00 p.m. ET, both of which could impact Treasuries and impact equity market trading today.

Finally, a handful of late season earnings releases are due out including: BMO ($2.12), BNS ($1.28), and OKTA ($0.33), but the main earnings catalyst this week will be NVDA’s release later in the week.