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What’s Next for Markets

What’s in Today’s Report:

  • What’s Next For Markets
  • Weekly Market Preview (Key earnings this week)
  • Weekly Economic Cheat Sheet (Important Growth Updates Wed/Thurs)

Futures are modestly lower following a quiet weekend as civil unrest in Hong Kong weighed on investor sentiment.

Protests in Hong Kong, which have been ongoing for weeks, intensified over the weekend as all flights out of Hong Kong have been canceled.  The turmoil is just adding to general geopolitical concerns and that’s pushing bond yields lower, which is why stock futures are down.  The 10 year Treasury yield broke below 1.70% this morning and is trading as of this writing at 1.68%.

Economic data was sparse over the weekend and there was no new news on U.S./China trade.  The next event in this drama is whether the September trade talks still occur (for now the answer is “yes” but that could change at any minute and if it does, stocks will drop).

Today the calendar is quiet as there are no economic reports and no Fed speakers, but any China related headlines will move markets.

The Most Important Week of the Year

What’s in Today’s Report:

  • Fed Week – Why This is the Most Important Fed Decision of the Year
  • Weekly Market Preview – Will the Fed Meet Incredibly Dovish Expectations?
  • Weekly Economic Cheat Sheet – One of the Busiest Weeks of the Year (Jobs Report, Inflation Data, Global PMIs)

Futures are little changed following a quiet weekend as all eyes now turn to the Fed decision on Wednesday.

Former Fed Chair Yellen endorsed a rate cut over the weekend, but did not advocate for sustained easing.   And, this gets right to the heart of this market.  We know the Fed will cut 25 bps this week, but we don’t know if they’ll signal the start of a sustained easing campaign (i.e. 75-100 bps of cuts by year-end) and that’s something the market has already aggressively priced in at these levels.

Economic data was sparse over the weekend although Japanese Retail Sales (0.3% vs. (E) 0.1%) beat estimates.

There was no notable U.S.-China trade news over the weekend and expectations are low for any actual progress at the talks this week.

Today there are no notable economic reports nor any important central bank speak, so focus will remain on earnings (this is the last important week of earnings) and on any U.S.-China trade headlines (although none are expected).

Fed Expectations and Earnings

What’s in Today’s Report:

  • Weekly Market Preview (Fed Expectations and Earnings)
  • Weekly Economic Cheat Sheet (July Flash PMIs this week).

Futures are slightly higher on positive U.S.-China trade headlines following an otherwise quiet weekend.

Tech firms will meet today with administration officials to discuss the Huawei tech ban, while multiple reports stated China will increase soybean purchases and a face to face meeting between Chinese & U.S. officials could occur soon.

Fed policy expectations continue to shift back to a 25 basis point rate cut next week as hope for a 50 basis point cut continues to recede.

Today there are no economic reports and no Fed speakers as we enter the “quiet period” ahead of next Wednesday’s rate decision.  So, there’s not much on the calendar today that could cause volatility, although headlines from the tech company/administration meeting today on Huawei is something to watch, as any hints at relaxing of the ban will be a mild positive for stocks.  Earnings are sparse today as well although I’ll be watching Whirlpool (WHR $3.80) results after the close for any insight into the state of the U.S. consumer.

What the Strong Jobs Report Means for Markets

What’s in Today’s Report:

  • What Friday’s Jobs Report Means for the Markets
  • Weekly Market Preview (Powell’s testimony is the big event this week)
  • Weekly Economic Cheat Sheet (Fed Minuets and CPI)

Futures are slightly lower this morning following a quiet weekend of news, as markets digest what Friday’s jobs report means for future Fed rate cuts.

Following the jobs report, investors still expect a rate cut this month, but what’s now in doubt is whether we see additional cuts after that, something the market is assuming and has already priced in.  Doubts over the number of future cuts is why stocks dipped Friday and are marginally lower this morning.

Economic data was again underwhelming as Japanese Machine Orders (-7.3% vs. (E) -3.0%) and German Industrial Production (-3.7% vs. (E) -3.2%) missed estimates, while German exports were slightly better (-1.1% vs. (E) -0.9%).

The important events this week come Wednesday via Fed Chair Powell’s testimony before Congress (will he telegraph a rate cut?), the FOMC Minutes (also out Wednesday – is there consensus for a cut?) and CPI (out Thursday).  So, today should be generally quiet as there are no economic reports or notable Fed speakers, although U.S.-China trade negotiations will re-start, so we’ll have to watch for any headlines from there.

S&P 500 Back At 2900: What’s Changed Since October

What’s in Today’s Report:

  • S&P 500 Back At 2900:  What’s Changed Since October.
  • Weekly Market Preview (All About Earnings)
  • Weekly Economic Cheat Sheet (More Important Chinese Data)
  • I’ll be joining Liz Claman on Countdown to the Closing Bell at 3:55 p.m. today on Fox Business to Discuss the Markets.  Tune In!

Futures are flat following a quiet weekend as markets digest last week’s rally.

Expectations of a U.S./China trade deal continue to rise, with some anticipating an announcement this week.  The WSJ, Reuters and others had positive articles this morning.  But, as a reminder, the market has already priced in a deal, so the real focus of any announcement will be when tariffs are removed, and the sooner, the better.

There was no notable international or U.S. economic data overnight.

Today there is one notable economic report, Empire State Manufacturing Index (E: 6.8) and one Fed speaker, Evans at 8:30 a.m. & noon.  Given that somewhat light calendar, focus will be on earnings, and some numbers we are watching today include: C ($1.78), GS ($5.05), JBHT ($1.25).  If data and earnings are solid, this rally can continue.

Can The S&P 500 Breakthrough 2900?

What’s in Today’s Report:

  • The Next Positive Catalyst For Stocks (Potentially)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (Chinese Exports The Big Number This Week)

Futures are slightly weaker following a generally quiet weekend as markets digest last week’s rally.

Economic data was mixed and is putting mild pressure on stocks this morning as German exports missed expectations (-1.3% vs. (E) 0.1%), reminding markets the global economy isn’t healed yet.

U.S./China trade talks ended last week without an announcement of a deal but talks will continue this week via video-conference and a deal is still widely expected.

Today there are no economic reports and no Fed speakers, so focus will remain on any U.S./China headlines (again a deal could be announced any minute).  But, barring any surprises today should be generally quiet as the big events of the week (FOMC Minutes, Chinese data, bank earnings) happen Wed-Friday.

Updated Equity Market Outlook

What’s in Today’s Report:

  • Updated Equity Outlook:  A Resilient Market vs. Two Building Headwinds
  • Weekly Market Preview (All About Data)
  • Weekly Economic Cheat Sheet

Futures are sharply higher following better than expected global PMIs as hope for a global economic rebound stays alive.

China’s “official” Manufacturing PMI rose to 50.5 vs. (E) 49.8 in March, Japan’s Manufacturing PMI rose to 49.2 vs. (E) 48.9, and the UK’s Manufacturing PMI surged to 55.1 vs. (E) 51.2.

The only disappointment in Europe, where the EU Manufacturing PMI slipped to 47.5 vs. (E) 47.6, and inflation also underwhelmed.

Today focus will remain on economic data and the key report today is the ISM Manufacturing Index (E: 54.2).  If that number can beat expectations, it will further reinforce the idea of a growth rebound and bonds yields should rise, the dollar should fall, and this morning’s rally should be extended, although I think it’s hard to imagine the S&P 500 moving more than a percent or two ahead from here of earnings season (more on that in the issue).  Other reports today include Retail Sales (E: 0.3%) and Construction Spending (E: -0.2%).

Finally, a “head’s up” that today is April Fool’s Day, just in case anyone (in my case most likely my children) tells you something preposterous!

What Caused Last Week’s Rally (And Can It Continue?)

What’s in Today’s Report:

  • Justification For Last Week’s Rally?
  • Market Internals – Not As Strong As You’d Think
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are only slightly lower despite disappointing U.S./China trade headlines over the weekend and more underwhelming global economic data.

The South China Morning Post reported that a Trump/Xi trade summit (to end the trade war) might not happen until June, later than the current April expectation, as talks on key issues continue to drag out.

Global economic data remained underwhelming as Japanese exports missed expectations, falling –1.2% vs. (E) 0.7%.

Today there is only one economic report, Housing Market Index (E: 63.0), and no Fed speakers (they’re in the blackout period ahead of Wednesday’s meeting) so unless we get a surprise U.S./China trade headline (and chatter there seems to be rising following the weekend) I’d expect digestion of last week’s big rally.

Weekly Market Preview

What’s in Today’s Report:

  • What Stocks Fell Late Last Week (It Wasn’t China)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (Important Reports This Week)

Futures and global markets are moderately higher following positive reports on U.S./China trade and the potential for economic stimulus in the EU.

Reuters and Axios both had positive U.S./China trade articles this morning, with Axios reporting Trump & Chinese President Xi may meet in mid-March in Florida.  That’s particularly notable because it’s assumed the two leader’s won’t meet until a trade deal is effectively done.  So, if the report proves to be true, there’s an end in sight which is an incremental positive.

There were also numerous reports that the ECB is considering re-introducing TLTROs (a type of cheap loan to spur economic activity) to combat slowing EU growth.

Today there are no economic reports or Fed speakers so I’d expect a generally quiet trading day unless we get surprise political (possible government shutdown Friday) or geo-political (more U.S./China trade) headlines.

What’s Next for Markets

What’s in Today’s Report:

  • Why We Still Think Stocks Are in a Trading Range (And We’re Near the Top)
  • Two Indicators That Would Make Us More Bullish on Stocks (In the Currency & Bond Section)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are flat following a very quiet weekend of no incremental news (the weekend news flow was similar to the scoring in the first half of the super bowl).

The only notable economic report was Chinese Service PMI which met expectations at 53.6 vs. (E) 53.9.  But, the composite PMI still dropped to 50.9 vs. the previous 52.2 so there are still legitimate reasons to worry about Chinese, and global, economic growth.

Today there are no notable economic reports and the only notable earnings report comes after the close (GOOGL ($11.08)) so I’d expect a generally quiet trading day as investors digest the recent rally/news.