Posts

Hard Landing, Soft Landing, or No Landing?

/in , /by

What’s in Today’s Report:

  • Hard Landing, Soft Landing, or No Landing? (Printable PDF Table Available)
  • Powell Interview Takeaways

Futures are moderately lower this morning as investors continue to digest Powell’s commentary from yesterday which was largely viewed as another missed opportunity to push back on recent dovish money flows across markets.

Looking into today’s session there are no notable economic reports but a slew of Fed speakers that could move markets. In chronological order, we will hear from: Williams (9:20 a.m. ET), Cook (9:30 a.m. ET), Bostic (10:00 a.m. ET), Kashkari (12:30 p.m. ET), and finally Waller (1:45 p.m. ET).

Additionally, the Treasury will hold a 10-Yr Note auction at 1:00 p.m. ET and seeing as yesterday’s dismal 3-Yr auction sent the S&P 500 to session lows, the outcome could very well move markets today.

Finally, Q4 earnings season continues today with a few notable companies releasing results: UBER (-$0.21), CVS ($1.92), DIS ($0.80).

Jobs Report Preview

/in , /by

What’s in Today’s Report:

  • Jobs Report Preview

Futures are moderately lower following a disappointing night of tech earnings and more hot inflation data.

AAPL, AMZN, and GOOGL all reported earnings overnight and the results underwhelmed.  Each stock is down between 2% and 5% pre-market.

Economically, EU PPI rose 1.1% vs. (E) -0.7% and became the third inflation number this week to hint at a rebound.

Focus today will be on the Employment Situation Report and expectations are as follows: Job Adds 185K, UE Rate 3.6%, Wages 0.3% m/m, 4.5% y/y).  Financial media focus will be on the headline job adds number but thanks to Powell’s less hawkish speech it’ll take a big number (300k or more) to be “Too Hot.”  Instead, focus on wages as they are directly related to services inflation, which remains sticky.  If wages are strong, that’ll be a negative.  The other notable economic report today is the ISM Services Index (E: 49.6) and markets will want to see stability in the data (no not worse than expectations).

FOMC Meeting Preview

/in , /by

What’s in Today’s Report:

  • FOMC Preview
  • VIX Chart – Is Volatility About to Surge Again?

U.S. stock futures are tracking European markets lower this morning amid a hawkish reaction to strong economic data and disappointing earnings from UBS and Samsung.

Economic data in Europe showed a reversal back higher in French inflation and better than-feared growth in the EU which is resulting in more hawkish money flows ahead of the several key central bank decisions this week and that is ultimately weighing on risk assets this morning.

Looking into today’s session, there are a few economic reports to watch in the U.S. (in order of importance): Q4 Employment Cost Index (E: 1.1%), Consumer Confidence (E: 109.0), Chicago PMI (E: 45.1), and the Case-Shiller Home Price Index (E: -0.5%).

With the FOMC Meeting getting underway, the macro focus will be on rate markets and expectations for the terminal rate as tomorrow’s 25 basis point hike is priced in with nearly 100% confidence. If market-based terminal rate expectations rise today, expect further pressure on risk assets and lower equity prices broadly.

Meanwhile, earnings season continues in full force today with notable releases coming from: UPS ($3.58), GM ($1.65), XOM ($3.32), MCD ($2.45), CAT ($3.95), and AMD ($0.67).

Has the Market Priced in Peak Hawkishness?

/in , /by

What’s in Today’s Report:

  • Has the Market Already Priced in Peak Hawkishness?
  • Weekly Market Preview:  Why This is the Most Important Week of Q1
  • Weekly Economic Cheat Sheet:  Fed on Wed, Jobs on Friday (It’s a busy week!)

Futures are moderately lower following a hotter-than-expected Spanish CPI report and as markets look ahead to a week filled with potential market-moving events.

Spanish CPI rose 5.8% vs. (E) 4.8% y/y and that is challenging the idea that disinflation is accelerating, and stocks are dropping as a result.

Investors are also booking profits ahead of a key week of catalysts including Fed/ECB/BOE rate meetings, critical earnings reports (this is the most important week of earnings), and the monthly jobs report on Friday.

This week is very, very busy from an economic standpoint between the Fed on Wednesday, jobs report on Friday, ISM PMIs and key inflation readings.  But, all the important reports start tomorrow so today’s focus will be on the earnings, and some notable reports today include NXPI ($3.60) and WHR ($3.43) which will give us insight into semi-conductor production (any more shortages?) and consumer demand.

Did Yesterday’s Data Imply a Soft Landing is More Likely?

/in , /by

What’s in Today’s Report:

  • Did Yesterday’s Data Imply a Soft Landing is More Likely?

Futures are slightly lower as markets digest Thursday’s rally following a mostly disappointing night of earnings.

Intel (INTC) posted very disappointing results and the stock dropped –9% overnight while other earnings reports were mostly mixed.

Economic data was sparse as Euro Zone Money supply was the only notable indicator and it rose 4.7% vs. (E) 4.8%.

Today focus will turn to inflation via the Core PCE Price Index (E: 0.3%, 4.4%) and five-year inflation expectations in U-Michigan Consumer Sentiment (E: 64.6).  The lower those inflation numbers, the better, and if we get soft inflation data that likely will help extend this week’s rally as it’ll increase expectations for a Fed pause in the next month or two.  We also get Pending Home Sales (E: -1.0%) but that shouldn’t move markets.

On the earnings front, important reports today include: CVX ($4.16), AXP ($2.18), and CL ($0.76).

Earnings Season Update (What MSFT’s Results Mean for Markets)

/in , /by

What’s in Today’s Report:

  • Earnings Season Update (What MSFT’s Results Mean for Markets)
  • EIA Analysis and Oil Market Update

Futures are slightly higher thanks mostly to momentum from Wednesday’s rebound and as earnings overnight were no worse than feared.

On earnings, TSLA rallied 6% after hours as Elon Musk teased more deliveries on the call in ‘23 than actual guidance, while IBM results were slightly disappointing.

Today focus will be on economic data and the key reports today are:  Durable Goods (E: 2.8%), Jobless Claims (E: 202K), Q4 ’22 GDP (E: 2.7%), and New Home Sales (E: 614K).  As has been the case through the end of ’22 and early ’23, moderation in the data, not an outright collapse, is what stocks and bonds need to extend yesterday’s rally.

On earnings, the key report today comes after the close with INTC ($0.20), while other notable reports include: V $($2.01), MA ($2.56), AAL ($1.14), JBLU ($0.19), and VLO ($7.45).

Economic Breaker Panel: January Update

/in , /by

What’s in Today’s Report:

  • Economic Breaker Panel – January Update
  • January Composite PMI Data Takeaways

U.S. stock futures are lower this morning, led by mega-cap tech after MSFT earnings topped estimates but guidance disappointed which is weighing on sentiment broadly.

Economically, the Business Expectations component of the German Ifo Survey notably firmed to 86.4 vs. (E) 85.0 further supporting hopes that Europe will avoid a recession in 2023 but concerns about the global tech sector is offsetting the good economic data this morning.

There are no notable economic reports and no Fed officials are scheduled to speak today which will leave the focus on earnings.

Notable companies releasing quarterly results today include: BA ($0.30), T ($0.58), and FCX ($0.40) ahead of the bell, and TSLA ($1.15), IBM ($3.60), CSX ($0.47), and STX ($0.08) after the close.

Intraday, the Treasury will hold a 5-Yr Note auction at 1:00 p.m. ET, and as we saw with yesterday’s 2-Yr auction which sent stocks to new session highs, the outcome of the auction could move markets before focus returns to post-market earnings reports.

Why Is Tech/Growth Rallying So Hard?

/in , /by

What’s in Today’s Report:

  • Why Is Tech/Growth Rallying So Hard?
  • Leading Indicators – Data Takeaways
  • Chart: Dollar Index Approaches Key Long-Term Technical Support

Futures are slightly lower as yesterday’s gains are digested while focus shifts to the start of big tech earnings.

Economically, Flash PMI data was mixed overnight with the broader Eurozone figure topping estimates but the U.K. headline badly missing expectations. The Solid Eurozone data is helping shore up recently more hawkish policy expectations for the ECB and that is weighing on EU shares this morning.

Today, the U.S. Composite PMI Flash will be in focus right after the opening bell. The report is comprised of two parts: the PMI Manufacturing Flash (E: 46.5) and the PMI Services Flash (E: 45.5) and investors will want to see some degree of stabilization in the data.

There are no Fed speakers today however the Treasury will hold a 2-Yr Note auction at 1:00 p.m. ET and the results could shed light on the market’s latest policy expectations ahead of next week’s Fed meeting, and weak demand (higher yields out of the auction) could weigh on stocks.

Finally, earnings season is continuing to pick up with: JNJ ($2.22), VZ ($1.21), MMM ($2.34), UNP ($2.75), and TRV ($3.50) reporting before the bell while the big report will be MSFT  ($2.29) after the bell. COF ($3.81) will also report after the close.

Hard Landing or Soft Landing?

/in , /by

What’s in Today’s Report:

  • Hard Landing or Soft Landing?
  • Weekly Economic Cheat Sheet:  Does Growth Stabilize?
  • Weekly Market Preview:  The Peak of Earnings Season

Futures are little changed following a mostly quiet weekend of news as markets look ahead to more earnings and economic data this week.

On Sunday the WSJ published an article on the Fed that stated the Fed will hike 25 bps at the upcoming meeting and begin discussions on when to end the rate hike cycle.  The article is being taken as dovish, but it’s not very different from current consensus thinking.

Today the focus will be on Leading Indicators (E: -0.7%) because this number flashed an intense recession warning signal last month and if there’s further deterioration that will likely weigh on stocks modestly.

On the earnings front, most of the key names this week report Tuesday – Thursday, but some results we’re watching today include:  SYF ($1.12), BKR ($0.41), and LOGI ($1.06).

Is Tech Still An Anchor on the S&P 500?

/in , /by

What’s in Today’s Report:

  • Is Tech Still An Anchor on the S&P 500?

Futures are slightly higher following a better night of earnings and more encouraging inflation data.

Earnings from NFLX and PPG were solid after yesterday’s close and that’s helping to slightly bolster sentiment.

On inflation, Japanese CPI was slightly better than estimates (4.0% y/y vs. (E) 4.1%) and that will help to reduce hawkish expectations for the BOJ.

Today there’s just one economic report, Existing Home Sales (E: 3.97 million) and that shouldn’t move markets.  So, focus will be on Fed speak and we get two speakers today: Harker (9:00 a.m. ET) and Waller (1:00 p.m. ET).  If they reiterate the desire for Fed Funds to get above 5%, despite the recent progress on inflation, that will be a mild headwind on stocks.

On earnings, two notable results to watch today are ALLY ($0.98) and STT ($2.00).