Oil futures finished with a loss on Monday, with traders weighing the prospects for energy demand. A “shockingly strong” Empire State Manufacturing Index reading Monday helped to live the odds of an interest-rate hike by the Federal Reserve in May, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are higher this morning as Chinese economic data was mostly better than expected while investors await more big bank earnings today.
Economically, Chinese Retail Sales jumped 10.6% y/y vs. (E) 7.0% in March which helped Q1 GDP to rise 4.5% y/y vs. (E) 3.9%. Other metrics including Fixed Asset Investment and Industrial Production were less encouraging, but the strong consumer data was well received by investors overnight.
Meanwhile U.K. wage growth rose 5.9% vs. (E) 5.1% in March which adds some pressure to the BoE to remain aggressive as there is clearly more work to do to get inflation under control.
Looking into today’s session, focus will be on earnings early with BAC ($0.79), GS ($8.14), JNJ ($2.51), and BK ($1.09) reporting quarterly results before the open while NFLX ($2.81) and UAL (-$0.73) report after the close.
After the open, investors will be watching for the only notable economic release today: Housing Starts and Permits (E: 1.400 million, 1.431 million) before there is a 52-Week Treasury Bill auction at 11:30 a.m. ET which may offer some fresh insight into market expectations for Fed policy over the next year.
Finally, the Fed’s Bowman speaks at 1:00 p.m. ET and investors will be looking any further clues about May rate hike plans and longer term policy outlook.
What’s in Today’s Report:
Futures have stabilized with global shares as easing geopolitical angst offsets more hot inflation data in Europe.
The AP reported the projectile that killed two in Poland on Tuesday originated in Ukraine (by their air defense systems) and not Russia which has eased concerns about NATO being pulled into the war between Russia and Ukraine.
Economically, U.K. CPI rose to 11.1% vs. (E) 10.6% in October, a fresh 41-year high which rekindled some global inflation fears overnight.
Today, the focus will be on the slew of economic data due to be released: Retail Sales (E: 1.0%), Import & Export Prices (E: -0.4%, 4.0%), Industrial Production (E: 0.2%), and the Housing Market Index (E: 36). The market will want to see a continued slowdown in growth metrics but more importantly, a faster slowdown in any price measures within the data as that dynamic would improve the prospects of a soft landing.
Additionally, the Fed speakers circuit remains active with: Williams (9:50 a.m. ET), Barr (10:00 a.m. ET), and Waller (2:35 p.m. ET) all due to speak over the course of the session.
Bottom line, if economic data and geopolitical headlines remain favorable today, the S&P 500 should be able to make another run at critical technical resistance at 4,007 in the S&P 500. A close above that level would open the door to another leg higher in the latest relief rally in the broader stock market.
What’s in Today’s Report:
U.S. equity futures are up more than 1% in sympathy with EU markets following mixed messages about BOE policy.
An FT article overnight said the BOE would delay QT plans further in an attempt to insure stability in U.K. markets which fueled a continued rebound in risk assets, however, the BOE later said the report was “inaccurate” which has seen some of those pre-market moves unwind.
Looking into today’s session, there are two economic reports to watch: Industrial Production (E: 0.1%) and the Housing Market Index (E: 44) while there are two Fed officials scheduled to speak: Bostic (2:00 p.m. ET) and Kashkari (5:30 p.m. ET).
Earnings season will continue to pick up today with GS ($7.47), JNJ ($2.49), and LMT ($6.60) reporting ahead of the bell while NFLX ($2.11), UAL ($2.21), and JBHT ($2.46) releasing results after the close.
Bottom line, risk assets remain buoyant following last week’s volatility, and as long as fixed-income markets continue to stabilize and earnings do not materially disappoint, the relief rally that stocks enjoyed yesterday should be able to extend higher today.
What’s in Today’s Report:
Futures are modestly lower this morning as investors digest more downbeat economic data and disappointing earnings out of HD ahead of the Fed Minutes tomorrow.
The German ZEW Survey’s Economic Sentiment reading was -55.2 vs. (E) -52.7, underscoring ongoing concerns about the outlook for growth in the months ahead.
Looking to today’s session, there are two economic reports to watch: Housing Starts and Permits (1.540M, 1.650M) and Industrial Production (E: 0.3%). Data has been disappointing so far this week so any positivity in the releases could help buoy equities in what has been so far a pretty quiet trading week.
There are no Fed officials scheduled to speak today but WMT ($1.60) will report earnings in the pre-market and investors will be looking for the massive retailer to reiterate guidance and meet or beat estimates to provide evidence that the consumer remains resilient in the face of extremely high inflation. Any disappointment in the quarterly results could spur volatility given the most recent leg higher in stocks leaving the market overbought.
What’s in Today’s Report:
U.S. stock futures are trading higher by more than 1% amid new stimulus optimism and progress towards a ceasefire in Ukraine ahead of today’s FOMC announcement.
The Hang Seng led Asian markets higher with a 9.1% gain o/n after the Chinese government pledged new stimulus to combat slowing economic growth trends while covid-19 cases showed signs of peaking.
In Europe, both Russian and Ukrainian negotiators have reported progress in talks as the possibility of a “neutrality model” for Ukraine has been introduced.
Looking into today’s session there are a few economic reports to watch early including: Retail Sales (E: 0.4%), Import & Export Prices (E: 1.5%, 1.3%), and the Housing Market Index (E: 81) but none should materially move markets given the geopolitical backdrop and looming rate hike from the Fed.
From there, focus will turn to the conclusion of the Federal Reserve meeting with the FOMC Announcement at 2:00 p.m. ET, and Powell’s Press Conference 2:30 p.m. ET. A 25 basis point hike is fully priced in for today’s meeting however any insight as to the pace of hikes going forward (dot plot) or plans for QT will move markets and the “less-hawkish” the better for equity markets.
What’s in Today’s Report:
Stock futures are slightly lower this morning following a mostly quiet night of news as investors continue to cautiously eye this week’s sharp rise in bond yields.
The 10-Yr Note yield notably topped 1.33% overnight, pressuring S&P futures to session lows but yields have pulled back and stock futures have stabilized in pre-market trading.
Looking into today’s session, there are multiple economic reports to watch this morning including: Retail Sales (E: 1.0%), Industrial Production (E: 0.5%), PPI (E: 0.4%), and the Housing Market Index (E: 83).
As we move into the afternoon, focus will be on the 20-Yr Treasury Bond Auction at 1:00 p.m. ET as the results could move yields and in turn impact equity markets.
Then, the FOMC Meeting Minutes will be released at 2:00 p.m. ET, and finally Robert Kaplan is scheduled to speak at 6:05 p.m. ET.
With the slew of potential catalysts on the calendar today, bond yields will be the key factor to watch as if we see another sharp rise in the 10-year it will act as an increasing headwind for stocks.