Tom Essaye of the Sevens Report noted that “very strong data would incur more Fed hawkishness while really soft data would spike stagflation concerns — and ‘moderating’ was just what we got from the ADP jobs report.” Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher following a surprise rate cut by Chinese authorities.
Officials in China announced a larger than expected rate cut to the 5-year Loan Prime Rate (15 bps vs. (E) 5 bps) in a move that potentially signals greater ongoing support for the economy (if China can reopen and authorities substantially support the economy that would remove a big headwind on stocks).
Economic data was mixed overnight as German PPI remained hot (2.8% vs. (E) 1.2% m/m) while UK Retail Sales modestly beat estimates (rising 1.4% vs. (E) 0.2%) but neither number is altering the rate hike outlooks for the ECB or BOE (both are expected to continue to hike rates over the summer).
Today there are no notable economic reports and no Fed speakers scheduled so look for momentum and shorter-term technicals to drive trading.
What’s in Today’s Report:
Futures are little changed following a quiet night of news and ahead of the long weekend.
There were no notable economic reports overnight. Geopolitically, the Russia/Ukraine war raged on as fighting intensifies in eastern Ukraine (as has been expected).
Earnings overnight were net positive as Taiwan Semiconductor (TSM) provided solid guidance and that’s helping to relieve some ongoing semiconductor supply anxiety.
Today will be a busy day, with the first potentially big event being the ECB Decision at 7:45 a.m. ET. No change is expected to rates or QE, but if Lagarde is hawkish in her commentary it could hit stocks.
Economically, we’ll have multiple reports today including, in order of importance, Retails Sales (E: 0.6%), Consumer Sentiment (E: 58.8), and Jobless Claims (E: 175K). As has been the case, markets will want to see continued stability in the data.
Finally, we have two Fed speakers, Mester (2:30 p.m. ET) and Harker (6:00 p.m. ET), but they shouldn’t move markets.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night of news as oil declined modestly and there was no further escalation in the Russia/Ukraine war.
Economic data disappointed overnight as UK Retail Sales missed estimates (-.3% vs. (E) 0.7%), while German IFO Business Expectations plunged to 85.1 vs. (E) 92.4, reflecting uncertainty related to the Russia/Ukraine war.
Today’s focus will be on the Consumer Sentiment Report (E: 59.7) and specifically the Inflation Expectations index, and if five-year inflation expectations move meaningfully above 3%, that will put a headwind on stocks. Pending Home Sales (E: 0.9%) is the other notable report today, but it shouldn’t move markets.
From the Fed we have multiple speakers, including Williams (10:00 a.m. ET), Daly (11:00 a.m. ET), Barkin (11:30 a.m. ET) and Waller (12:00 p.m. ET) but as long as they stick to the current “script” of being open to a 50 bps hike at the May meeting (but not calling for even more) then they shouldn’t move markets.
What’s in Today’s Report:
Futures are starting the new year with moderate gains driven mostly by momentum/start of year positioning, following a quiet weekend of news. Many major markets today (London, Japan, Australia, U.S. Bonds) are closed.
Tesla (TSLA) reported better than expected deliveries for the fourth quarter and the stock is up 7% pre-market, and that’s helping markets rally.
There was no new news on Omicron over the weekend as cases skyrocket but hospitalizations remain relatively low.
With so many major markets closed, today will be a mostly quiet day, and barring any surprises tomorrow will be the first “real” trading day of the year. We do get one notable economic report today, the Markit December Manufacturing PMI (E: 57.8), and markets will want to see a “Goldilocks” number that shows Omicron isn’t a major economic headwind, but at the same time the data isn’t so strong it makes the Fed more aggressive.
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What’s in Today’s Report:
Stock futures are slightly lower this morning following a mostly quiet night of news as investors look ahead to several important economic releases in the U.S. today.
Economic data was in-line to slightly better than expected overnight while the Xi-Biden talks, while largely uneventful, did help to modestly improve general market sentiment.
Today, focus will be on economic data early with Retail Sales (E: 1.0%), Import & Export Prices (E: 0.9%, 0.7%), and Industrial Production (E: 0.9%) all due out ahead of the opening bell while the Housing Market Index (E: 80) will be released at the top of the 10:00 a.m. hour (ET).
Additionally, there are several Fed speakers today: Bostic (12:00 p.m. ET), Harker (2:55 p.m. ET), and Daly (3:30 p.m. ET) and the market will continue to look for patient remarks that suggest the pace of the taper will not be accelerated and rate hikes will not be pulled forward from late 2022.
What’s in Today’s Report:
Stock futures are little changed this morning as investors digest some mildly disappointing earnings from Europe and an uptick in tensions between the U.S. and China.
Asian shares underperformed overnight after the FCC banned China Telecom from doing business in the U.S., raising concerns about the political relationship between the world’s two largest economies.
Looking into today’s session there are two economic reports to watch: Durable Goods Orders (E: -0.9%) and International Trade in Goods (E: -$87.9B), both due out in the morning, while no Fed officials are scheduled to speak.
There is a 5-Yr Treasury auction at 1:00 p.m. ET that could move yields and ultimately impact equities, but bonds have been fairly quiet this week as focus shifts ahead to central bank decisions later this week and next.
Finally, we are in the heart of earnings season and there are several more big names reporting Q3 results today: BA (-$0.17), GM ($0.89), KO ($0.58), MCD ($2.46), HOG ($0.81), BMY ($1.91), F ($0.28), EBAY ($0.89).
What’s in Today’s Report:
Futures are little changed following a night of mixed earnings and economic data.
Earnings overnight were disappointing with SNAP (down 20%) and INTC (down 3%) posting disappointing results, although they aren’t hitting the market broadly.
Economic data was mixed as UK flash PMI beat estimates (56.8 vs. (E ) 54.0) while the Euro Zone PMI slightly missed expectations (54.3 vs. (E ) 55.2). But, neither number is materially moving markets.
Today the key economic report is the October Flash Manufacturing PMI (E: 60.7) and markets will want to see continued stability in the economic recovery. We also get two Fed speakers, Daly (10:00 a.m.) and Powell (11:00 a.m.), although we do not expect anything incremental regarding tapering expectations (everyone now expects tapering to start in November).
On the earnings front, three notable reports we’ll be watching today are: AXP ($1.78), HON ($2.01) and SLB ($0.36).
What’s in Today’s Report:
Futures are modestly lower on a resumption of the commodity rally following an otherwise quiet weekend.
Energy prices (oil, natural gas, coal) are all rallying again (up 2% – 3%) and that’s increasing global inflation anxiety, which is weighing moderately on futures.
Global bond yields are also rising as two hawkish Bank of England members warned of a possible rate hike this year, although that is not the consensus expectation (although a rate hike from the BOE in early 2022 is looking more likely).
Today is Columbus Day and the U.S. bond markets are closed and there are no economic reports today, although there is one Fed speaker: Evans (6:00 p.m. ET). So, commodity prices are Treasury yields should drive trading today. The more they rise, the stronger the headwind on stocks will become.
What’s in Today’s Report:
Futures are enjoying a modest bounce following yesterdays’ declines after a generally quiet night of news.
Economic data was solid overnight as both EU (56.2 vs. (E) 56.1) and UK (54.9 vs. (E) 54.1) September Composite PMIs beat estimates, reflecting stability in the global economic recovery.
On inflation, Euro Zone PPI rose 1.1% vs. (E) 1.3%, implying inflation pressures could be starting to ease.
Today focus will be on economic data and specifically the ISM Services PMI (E: 60.0). Markets will want to see stability in this number to further confirm the COVID spike in July/August didn’t have a lasting impact on the recovery. We also get two Fed speakers today, Barkin (10:30 a.m. ET) and Quarles (1:15 p.m. ET), and markets will continue to be on the lookout for any signs of a compromise on the reconciliation/debt ceiling bill (although nothing material is expected today).