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MMT Chart (December Edition)

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What’s in Today’s Report:

  • MMT Chart (December Edition)

Futures are modestly higher on momentum from Thursday’s rally and as the BOJ rate decision was no worse than feared

The Bank of Japan hiked rates by 25 bps, as expected, but gave no indication when rates might rise again and the yen weakened 1% vs. the dollar.

Today focus will remain on economic data via another important inflation report, the Core PCE Price Index (E: 0.2% m/m, 2.8% y/y) and some growth data: Existing Home Sales (E: 4.15 million), Consumer Sentiment (E: 53.4).

The best outcome for stocks remains that the data generally hits expectations and it’s not so good it encourages the hawks to push back on further rate cuts, nor so weak it raises growth concerns.  Most of the data we’ve received this week (and really the last few weeks) has been that way and Goldilocks data is absolutely helping support this market.

 

Pullback Update: What Makes It Better, What Makes It Worse

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What’s in Today’s Report:

  • Pullback Update: What Makes It Better, What Makes It Worse?

Futures are showing signs of stabilizing in pre-market trade as investors await fresh (but delayed) economic data, the October Fed meeting minutes, and critical NVDA earnings.

Economically, U.K. and EU CPI/HICP reports met estimates which is helping to quell worries about a resurgence in global inflation pressures.

Looking into today’s session, there are two economic releases that will be in focus early: Housing Starts (1.330M), International Trade (E: $-61.0B) as well as a pair of Treasury auctions mid-day: 4-Month Bills (11:30 a.m. ET) and 20-Yr Bonds (1:00 p.m. ET).

Regarding the Fed, there are two noteworthy speakers on the calendar today: Miran (10:00 a.m. ET) and Williams (2:00 p.m. ET) and the October FOMC meeting minutes will be released mid-afternoon (2:00 p.m. ET). The more dovish for markets, the better for stocks.

Finally, there are multiple noteworthy earnings releases today including TGT ($1.76), TJX ($1.22), LOW ($2.97), NVDA ($1.18), PANW ($0.50), however, NVDA results are widely considered to be the most important catalyst of the week as any disappointment could amplify the recent selling pressure and weigh heavily on big-tech, equities more broadly, and risk assets in general.

 

Five Concerning Market Breadth Developments

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What’s in Today’s Report:

  • Five Concerning Market Breadth Developments

Futures are modestly higher thanks to better than expected tech earnings.

APPL and AMZN both beat estimates and the stocks are rallying 2% and 12% respectively pre-market and pushing futures higher.

Economically, Chinese PMIs were mixed as the manufacturing PMI slightly missed estimates (49 vs. (E) 49.6).

There are no economic reports today but there are two Fed speakers, Logan (9:30 a.m. ET) and Bostic (12:00 p.m. ET) and given Powell’s hawkish surprise earlier in the week, markets will want to hear a dovish tone from both.

On earnings, the heart of the season is now over but there are still some notable reports today including: XOM ($1.78), CVX ($1.66) and ABBV ($1.77).

Finally, with President Trump back in the U.S., focus will shift to the government shutdown and any chatter about a resolution will be a mild market positive.

 

Takeaways from OpenAI’s Secondary Offering (More Evidence of An AI Bubble?)

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What’s in Today’s Report:

  • Takeaways from OpenAI’s Secondary Offering (More Evidence of An AI Bubble?)

Futures are slightly higher following another quiet night of news, as there was no notable progress on resolving the government shutdown overnight.

Economic data from Europe was mixed as the EU Services PMI as essentially in-line (51.3 vs. (E) 51.4) and rose since August, while the UK reading was weak, falling to 50.8 vs. (E) 51.9, a solid drop from the 54.2 August level.  That will add to anxiety about the UK economy.

Today there is no jobs report because of the slowdown so all the focus will be on the ISM Services PMI (E: 51.6) and the key for this number is to stay above 50.  If it drops below 50, that will add to slowdown concerns (although don’t be shocked by another “bad is good” rally in the short term).

There are also two Fed speakers today, Logan (1:30 p.m. E.T) and Jefferson (1:40 p.m. ET) but they shouldn’t move markets.

 

Technical Trends in the Economic Data

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What’s in Today’s Report:

  • Technical Trends in the Economic Data

Futures are little changed following a flurry of new tariff announcements overnight.

The administration announced several new tariffs on specific industries, most notably pharmaceuticals and semiconductors.

While the tariff headlines appear negative, the announcements include provisions to reduce the practical impact, they aren’t materially impacting markets.

Today focus will be on further dissecting the tariff announcements (as long as there are “outs” for companies, the announcements won’t be direct negative influences on markets) but also on inflation, as we get the Core PCE Price Index (E: 0.2% m/m, 2.9% y/y), and the inflation expectations in Consumer Sentiment (1-Yr Inflation Expectations: 4.8%, 5-Yr. Inflation Expectations: 3.0%).  Markets need inflation data to stay stable to continue to support rate cut hopes, so in-line to slightly soft numbers will be welcomed by markets (and a hot number would be a negative headwind).

Turning to the Fed, there are two speakers today:  Barkin (9:00 a.m. ET) and Bowman (1:00 p.m. ET) but they shouldn’t move markets.

 

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What’s in Today’s Report:

  • Is Valuation a Problem for the Market (Yes & No)
  • September Flash PMI Takeaways

Futures are rebounding from yesterday’s Powell-induced declines with tech leading as MU reported solid Q3 earnings while BABA announced a $50B AI investment overnight.

Economically, Germany’s Ifo Survey disappointed across the board with the headline Business Climate down to 87.7 vs. (E) 89.1.

Today, there is one economic report to watch: New Home Sales (E: 649K) and one Fed official scheduled to speak: Daly (4:10 p.m. ET).

The Treasury will hold a 4-Month Bill auction (11:30 a.m. ET) and a 5-Yr Note auction (1:00 p.m. ET) today, and as has been the case recently, the results have the potential to move fixed income markets/Fed policy expectations and ultimately could impact stocks.

Additionally, there are a few more noteworthy earnings releases due out today including: CTAS ($1.19), THO ($1.16), KBH ($1.50).

 

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Understanding Why Stocks Hit New Highs

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What’s in Today’s Report:

  • Understanding Why Stocks Hit New Highs
  • Weekly Market Preview: Does Goldilocks Growth and Inflation Data Continue?
  • Weekly Economic Cheat Sheet: September Flash PMIs Tuesday, Core PCE Price Index Friday are Key Reports

Futures are modestly lower as markets digested last week’s new highs following a mostly quiet weekend of news.

Politically, the U.S. government could shut down this Friday and that is weighing slightly on markets, although we don’t view any temporary, partial shutdown as a risk to the rally.

There was no notable economic data overnight.

Today the only economic report is the Chicago Fed National Activity Index (E: -0.19) and it’s unlikely to move markets, so focus instead will be on the Fed.

There are several Fed speakers today and the most important of them is Williams at 9:45 a.m. ET.  If Williams embraces two additional rate cuts this year, that should help support markets.  More broadly, markets will want to see dovish tones from most Fed speakers going forward, confirming the Fed intends several more rate cuts.  Other Fed speakers today include: Musalem (10:00 a.m. ET), Hammack (12:00 p.m. ET) and Barkin (12:00 p.m. ET).

 

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).

 

What Happens If AI Loses Momentum?

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What’s in Today’s Report:

  • What Happens if AI Loses Momentum?
  • Oil Update and Weekly EIA Takeaways

Futures are little changed following a quiet night of news and as CSCO earnings largely met expectations.

Economically, data was mixed in Europe as UK GDP (0.4% vs. (E) 0.2%) and Industrial Production (0.7% vs. (E) 0.5%) beat estimates while EU GDP met estimates (0.1%) but Industrial Production missed (badly) (-1.3% vs. (E) -0.5%).

Today focus will turn back to economic data and there are two notable reports today: Jobless Claims (E: 230K) and PPI (E: 0.2% m/m, 2.6% y/y).  Of the two, PPI is more important and if it confirms the mostly tame CPI reading from Tuesday, it will further solidify rate cut expectations and support stocks.  There is also one Fed speaker today, Barkin (2:00 p.m. ET), and given recent conflicting commentary from voting members on the FOMC, the tone of each speaker will become more important.

Finally, mid-season earnings continue and some notable reports today include: JD ($0.44), AMAT ($2.34), NTES ($1.85), DE ($4.62), AAP ($0.59), NU ($0.13).

 

Why Today’s CPI Is So Important (Hint: 50, 25, 0)

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What’s in Today’s Report:

  • Why Today’s CPI Is So Important (Hint: 50, 25, 0)
  • Gold Chart: Fragile Record Highs

Futures are flat as traders look ahead to today’s all-important CPI report.

Economically, the U.K.’s Unemployment Rate held steady at 4.7%, as expected, while the German ZEW Survey missed estimates, but the July NFIB Small Business Optimism Index rose to 100.3 vs. (E) 98.9 from 98.6 in June.

Today, market focus will be almost exclusively on inflation data before the bell with CPI (E: 0.2% m/m, 2.8% y/y) and Core CPI (E: 0.3% m/m, 3.0% y/y) due out at 8:30 a.m. ET.

After the open, there are two Fed officials scheduled to speak: Barkin (10:00 a.m. ET) and Schmid (10:30 a.m. ET), and any comments or insights they may offer in reaction to the CPI data could move markets.

Finally, earnings season continues to wind down but there are a handful of companies due to report quarterly results today which could move markets, including: CAH ($2.03), SE ($0.72), RGTI ($-0.05), HRB ($2.81), CRCL ($-1.29), and ETOR ($0.49).