Economic Breaker Panel: May Update

What’s in Today’s Report:

  • Economic Breaker Panel: May Update

Futures are little changed this morning while international markets were mixed overnight in quiet trade as investors assess the risk-reward of reopening global economies.

Economically, China’s April PPI headline notably fell further into deflationary territory, down -3.1% from -1.5% suggesting an ongoing lack of demand throughout China’s supply chain.

Meanwhile the April NFIB Small Business Optimism Index in the U.S. dropped by less than feared to 90.9 vs. (E) 84.8 and the forward looking “6-month outlook” jumped 24 points as business owners maintain hopes for an economic rebound in the second half of the year.

Today, there is one economic report to watch: CPI (E: -0.8%) while multiple Fed officials are scheduled to speak: Bullard (9:00 a.m. ET), Quarles (10:00 a.m. ET), Harker (12:00 p.m. ET), and Mester (5:00 p.m. ET).

Finally, there is a 10-Yr Treasury Note Auction at 1:00 p.m. ET and if the outcome lifts longer dated yields, the curve could further steepen out to multi-month highs which would be an encouraging development and add a tailwind to the equity markets today.

Economic Breaker Panel: December Update

What’s in Today’s Report:

  • Economic Breaker Panel: December Update

Stock futures are flat and international markets were little changed overnight amid very quiet newswires while investors look ahead to today’s Fed decision.

Economically, the Japanese PPI release was the only report out overnight and the headline met expectations at 0.2% which did not move markets.

In the energy market, oil futures are down nearly 1% after the API reported an inventory build of +1.4MM bbls vs. (E) -2.8MM ahead of today’s EIA report.

Today, the focus will be on the Fed decision with the Meeting Announcement at 2:00 p.m. ET and the Fed Chair Press Conference following shortly after at 2:30 p.m. ET.

Any significant market moves before the Fed are unlikely but there is one economic report to watch: CPI (E: 0.2%), and the EIA report at 10:30 a.m. ET could trigger a reaction in the energy market which could affect sector trading.

Beyond those catalysts, the trade war remains the single biggest influence on this market right now so investors will be looking for any incremental developments regarding the Dec. 15 tariff plans or news on a phase one trade deal.

An Economic Fork in the Road

What’s in Today’s Report:

  • Economic Breaker Panel Update: An Economy at a Fork in the Road

Global markets are trading with a moderate risk-off tone this morning as the trade war weighs on sentiment.

It remains unclear whether the U.S. will offer relief on existing tariffs as part of the “phase one” trade deal with China (which has been priced into stocks in recent weeks), or just cancel the scheduled December tariffs, which would be a disappointment.

Meanwhile, on the economic front, Eurozone Industrial Production was largely overlooked because of trade angst but the release was not as bad as feared (0.1% vs. E: -0.3%) further easing recession concerns in Europe.

There were other headlines overnight including escalating protests in Hong Kong which saw the Hang Seng underperform (down nearly 2%) and chatter about the public impeachment hearings in Washington today but neither are materially affecting U.S. stocks at this point as the market’s main focus remains the trade war.

Looking into today’s session, there is one economic report to watch: CPI (E: 0.3%) before focus will turn to Powell’s testimony before Congress on the state of the economy at 11:00 a.m. ET. Later in the day, there are two other Fed officials scheduled to speak before the closing bell: Barkin (12:30 p.m. ET) and Kashkari (1:30 p.m. ET).

Bottom line, there are a lot of headlines this morning but the trade war remains the single most important influence on this market so if expectations for tariff removal continue to fade, stocks are likely to trade with a heavy tone.

Economic Breaker Panel: How We Know the Fed is Still Too Tight

What’s in Today’s Report:

  • Economic Breaker Panel:  How We Know the Fed is Still Too Tight

Futures are modestly higher following news of a new Brexit agreement.

The EU and Britain have agreed to a new Brexit deal that solves the Northern Ireland border issue.  However, it remains unclear if the deal can get through Parliament, and remember that Parliament killed the last Brexit agreement between Britain and the EU

Economically, British Retail Sales slightly missed estimates (flat vs. (E) 0.2%) but that’s not moving markets.

Today focus will be on earnings (some notable reports include MS: $1.10, PM: $1.35 and UNP: $2.29).

Additionally, there are several economic reports including (in order of importance): Philly Fed (E: 7.1), Industrial Production (E: -0.2%), Jobless Claims (E: 210k) and Housing Starts (E: 1.3M).  Broadly speaking, the stronger the data, the better for stocks.

Is Impeachment a Negative for Markets?

What’s in Today’s Report:

  • What Impeachment Means for Markets
  • Economic Breaker Panel September Update

Stock futures are extending losses this morning and international equity markets were broadly lower overnight as political and trade uncertainties weigh on sentiment.

Speaker of the House, Nancy Pelosi, formally announced an impeachment inquiry regarding President Trump’s interactions with the President of Ukraine which has added to an already crowded list of potential market headwinds.

Otherwise, it was a relatively quiet night of news with no material economic data releases and no trade war developments.

Today, there is one economic report to watch: New Home Sales (E: 665K) and a relatively busy schedule of Fed speakers: Evans (8:00 a.m. ET), George (10:00 a.m. ET), and Kaplan (7:00 p.m. ET). There is also a 5-Yr Treasury Note Auction at 1:00 p.m. ET and based on yesterday’s very solid 2-Yr Auction that helped steepen the yield curve, the results could once again influence the stock market.

Beyond those scheduled market catalysts, investors will be focused on the fluid impeachment situation as well as sensitive to any trade war developments.

Economic Breaker Panel: July Update

What’s in Today’s Report:

  • Economic Breaker Panel – July Update

Futures are trading modestly higher this morning as investors digest the mixed set of corporate earnings releases so far this week after an otherwise quiet night of macro news.

Eurozone inflation was 1.3% vs. (E) 1.2% year/year in June, but the slightly firmer than expected print was not enough to alter the outlook for ECB policy (the euro is flat).

Today, there is one economic report to watch: Housing Starts (E: 1.260M) and one Fed official scheduled to speak: George (12:30 ET).

With news-flow considerably slower today than yesterday, investor focus will remain on earnings as the reporting season continues to pick up.

Notable releases today include: BAC ($0.70), PNC ($2.83), USB ($1.07), BK ($0.94) before the open, and NFLX ($0.56), IBM ($3.06), EBAY ($0.62), AA (-$0.34), KMI ($0.23) after the close.

Economic Breaker Panel Update

What’s in Today’s Report:

  • Economic Breaker Panel: May Update

U.S. stock futures are flat as investors look ahead to today’s release of the FOMC Minutes while most overseas markets bounced o/n in sympathy with the U.S. rally yesterday, although trade tensions remain elevated.

A NYT article released late yesterday revealed a modest escalation in the “tech war” as the U.S. will likely add several Chinese surveillance companies to the same “blacklist” that Huawei is on. This is an incremental negative as the odds of the broader “trade war” being resolved in the near-term continue to fall amid escalations in the U.S.-China “tech war.”

There are no major economic reports today but the calendar is relatively busy with the EIA Petroleum Status Report  due out at 10:30 a.m. ET (oil has traded with a sluggish tone this week and a selloff could drag stocks lower), while the main focus of the session will be on the release of the FOMC Meeting Minutes at 2:00 p.m. ET.

Additionally, there are multiple Fed speakers on the calendar: Williams (10:00 a.m. ET), Bostic (10:10 a.m. ET), and Kaplan (10:15 a.m. ET), however it is unlikely any of them move markets ahead of the Minutes.

Economic Breaker Panel: April Update

What’s in Today’s Report:

  • Economic Breaker Panel Update – More Improvement
  • Earnings Review – Not the Greatest Start

Futures are tracking international shares higher this morning amid dovish central bank speak and earnings optimism.

Both Evans and Rosengren made dovish comments regarding inflation which is helping influence mild risk-on money flows this morning.

Economically, the German ZEW Survey was mixed as the headline weakened for a seventh straight month while the forward looking business expectations rose for the sixth time in a row.

Today, there are two economic reports to watch: Industrial Production (E: 0.3%) and the Housing Market Index (E: 63), and Kaplan speaks at 2:00 p.m. ET.

Earnings however will remain the primary market focus with notable reports being released from BAC ($0.65) ahead of the bell and NFLX ($0.57) and IBM ($2.21) after the close. With a mixed start to the season, if we do not see corporate results begin to improve, underwhelming earnings will become a growing headwind on equities this week.

Economic Breaker Panel: March Update

What’s in Today’s Report:

  • What’s Next for Brexit
  • Economic Breaker Panel – March Update
  • Another (Potentially Bearish) Copper Development

Stock futures are marginally higher this morning after a very quiet night of news while no major international market moved more than 1% overnight.

Asian shares declined modestly after a report that Japanese Machine Orders fell –5.4% in January vs. (E) -1.9%.

In Europe, EU Industrial Production beat expectations (1.4% vs. E: 1.0%) while focus remains on today’s “hard Brexit” vote in the U.K. (which is very unlikely to pass).

Looking into today’s U.S. session, focus will be on economic data early with two reports due ahead of the bell: Durable Goods Orders (E: -0.8%), PPI (E: 0.2%), and one shortly after the open: Construction Spending (E: 0.3%).

There are no Fed officials speaking today so investor focus will shift to the “hard Brexit” vote but it is very unlikely to pass which will result in another vote to delay the Brexit date tomorrow. This scenario is priced in however and should not materially move markets.

Why The Dovish ECB Isn’t Good For Stocks

What’s in Today’s Report:

  • Why The Dovish ECB Decision Isn’t Good for Stocks

Futures are modestly lower following more disappointing economic data.

Chinese exports badly missed expectations at –20.7% vs. (E) -6.5%, although that number was likely skewed by the Lunar New Year, so it’s not as bad as it looks.  German Manufacturers’ Orders also missed (-2.6% vs. (E) 0.5%).  So, the data overnight is just adding to the growth worries that came from the ECB projections yesterday and that’s why stocks are down again.

Today the key will be the Employment Situation Report.  Estimates are:  Jobs: 178K, UE: 3.9%, Wages: 3.4% yoy), and thankfully the range for a “Just Right” number is wide, as we said in our Jobs Report Preview.  But, given the recent soft global economic data, while the range for a “Just Right” number is wide, the penalty for a number being “Too Cold” and causing growth concerns or “Too Hot” and resulting in a hawkish Fed will be extreme, and if either one of those outcomes occur, it’ll likely be a painful day in stocks.

Outside of the jobs report we also get Housing Starts (E: 1.17M) and two Fed Speakers:  Daly (10:00 a.m. ET) and Powell (10:00 p.m. ET).