“Stocks are digesting the declines of the past two weeks and while there are some notable employment and inflation numbers looming on Thursday and Friday, the bottom line is the calendar into year-end should be mostly quiet, again barring any material surprises,” Tom Essaye, the founder of Sevens Report Research, wrote Wednesday. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher following a quiet night of news as investors digest Thursday’s declines and look ahead to the long weekend.
Economically the only notable report was Japanese CPI and it came in slightly lower than expectations at 3.7% y/y vs. (E) 3.8% y/y. but it didn’t move markets.
Today focus will be on economic data and the key reports are, in order of importance: Core PCE Price Index (E: 0.2% m/m, 4.6% y/y), University of Michigan Consumer Sentiment (E: 59.1), Durable Goods (E: -0.8%) and New Home Sales (E: 600k). Markets will want to see further confirmation of dis-inflation in the Core PCE Price Index and the Five Year Inflation Expectations in the University of Michigan report, and if that happens it could spur a mild rally following yesterday’s declines.
What’s in Today’s Report:
Futures are slightly lower following a disappointing earnings report by Micron (MU).
Micron (MU down –3% after hours) reported underwhelming results and guidance and announced layoffs, and that’s reversing some of the earnings-driven gains we saw in stocks on Wednesday.
Economic data remained sparse but UK GDP slightly missed estimates, falling –0.3% vs. (E) -0.2%.
Today’s focus will be on Weekly Jobless Claims (E: 225k) and this number needs to move higher (towards 300k) to show the Fed that the labor market is returning to better balance (something the Fed said is needed before they can think about a pivot). We also get the Final Q3 GDP (E: 2.9%) but that data is very old now (July-September) and it shouldn’t move markets.
What’s in Today’s Report:
Futures are moderately higher following better-than-expected earnings overnight.
Both Nike (NKE up 12% after hours) and FedEx (FDX up 4% after hours) posted better-than-expected earnings overnight and those results are helping to ease rising anxiety about 2023 earnings.
The only notable economic report was German Gfk Consumer Climate and it was in line (–37.8 vs. (E) -37.5).
Today the calendar stays quiet (it picks up tomorrow) but the focus will be on Consumer Confidence (E: 101.0) and Existing Home Sales (E: 4.2M) and the key for data will remain moderation (but not a collapse that implies looming stagflation).
What’s in Today’s Report:
Futures are slightly higher as China continues to remove COVID restrictions. The rest of the weekend was quiet from a macroeconomic perspective.
China announced it will deactivate its COVID tracking app in the latest signal that it is gradually abandoning the “Zero COVID” policy.
Economically, reports were sparse but UK Industrial Production (0.7% vs. (E) 0.0%) and Monthly GDP (0.5% vs. (E) 0.4%) both beat expectations.
Today the economic calendar is quiet and trading should be also, as markets look ahead to the week’s key events tomorrow (CPI) and Wednesday (FOMC Decision).
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What’s in Today’s Report:
Futures are modestly lower as investors digest Wednesday’s earnings disappointments.
CSCO and NVDA reported after the close and both results were better than feared, but that’s not enough to offset growing concerns about future corporate earnings.
On inflation, October EU HICP slightly missed estimates (10.6% vs. (E) 10.7%) although the monthly reading was in-line at 1.5%, signaling that inflation pressures in the EU aren’t declining.
Today’s focus will again be on inflation so the price indices in the Philly Fed Manufacturing Index (E: -7.0) will be the key reports and any declines in those price indices should prompt at least a small rally. Outside of Philly Fed, we also get Housing Starts (E: 1.41M) and Jobless Claims (E: 222k), but neither should move markets.
There are also multiple Fed speakers today including Bostic (7:30 a.m. ET), Bowman (9:15 a.m. ET), Mester (9:40 a.m. ET), and Kashkari (10:40 a.m. ET & 1:45 p.m. ET), and we should expect their message to be consistent with recent Fed speak: The size of rate hikes will shrink, but the Fed still has a long way to go to reach the “Terminal Rate.”
Tom Essaye, founder and president of Sevens Report Research, joins BNN Bloomberg to recap earnings from big tech this week. Click here to watch the full interview.
What’s in Today’s Report:
Futures are modestly higher on continued momentum from Thursday’s CPI report and as Chinese officials further signaled changes to their “Zero COVID” policy.
China made more than 20 changes to COVID policies overnight, all of which relaxed COVID rules and further signaled a departure from “Zero COVID.”
Economic data was mixed as German CPI met expectations at 10.4%, while UK GDP and Industrial Production were slightly better than expected.
Today the only notable number is Consumer Sentiment (E: 59.6) and specifically the Five-Year Inflation Expectations Index. If that number falls further away from 3.0% (and drops to or below 2.7%) that will further fuel the idea that inflation pressures are receding, and stocks should extend the rally.
What’s in Today’s Report:
Stock futures have stabilized after yesterday’s midterm-induced declines and Treasury yields are modestly lower this morning as the focus turns to today’s all-important CPI data.
It was a quiet night of news and there were no market-moving economic reports overseas.
Today, trader focus will be on the October CPI report (E: 0.7%) due out at 8:30 a.m. ET. We will also get Jobless Claims (E: 221K) before the opening.
The Fed speaker circuit picks up as well today with Harker (9:00 a.m. ET), Logan (9:35 a.m. ET), George (1:30 p.m. ET), and Williams (6:35 p.m. ET) all scheduled to speak today.
Bottom line, today’s CPI report is likely to make or break the latest attempt at a broad-based relief rally. If the data is hot and Treasuries decline (yields rise) in a hawkish manner, expect further pressure on equities. Conversely, if CPI is “cooler” than expected and Fed speak is on the dovish side, the S&P 500 could retest recent highs near 3,900.
What’s in Today’s Report:
Futures are modestly higher mostly on momentum from Friday’s rally and despite negative COVID news from China and an APPL warning on I-Phone production.
Reports over the weekend pushed back on Chinese authorities abandoning the “Zero COVID” policy, although markets still expect some relaxing of restrictions.
APPL warned that COVID restrictions in China will impact IPhone production, although demand remains strong (so the news isn’t materially impacting the stock).
Today there are no notable economic reports but there are three Fed speakers: Mester (3:40 p.m. ET), Collins (3:40 p.m. ET) and Barkin (6:00 p.m. ET). If they even slightly push back on the idea that “Terminal” Fed Funds will be higher than expected in September, as Evans did on Friday, then stocks can extend this rebound.