“The expectation that consumer demand will firm markedly in China as the economy continues to recover from the impact of strict economic lockdowns is another supporting factor for oil markets this week,” said Richey. Click here to read the full article.
What was interesting about Wednesday’s rally was that the U.S. petroleum inventory data, which were largely bearish, were “ignored and traders instead bid up the market on the easing headline CPI figure. To me, that suggests the market has largely priced in the OPEC+ production cut planned for next month and is again focused on the demand outlook, as the cooling price pressures bolstered hopes a hard economic landing can be avoided,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower on digestion of Thursday’s rally and as markets await bank earnings this morning.
Fed balance sheet news overnight was mixed, as total usage of the Discount Window and BTFP dropped to $139 bln from $149 bln, but that’s still very elevated and it underscores there’s still stress in the regional banks.
Focus today will be on economic data and earnings, and the key here remains stability in both sets of reports (so no major disappointments). Important economic reports today include, in order of importance, Retail Sales (E: -0.4%), Industrial Production (E: 0.3%) and Consumer Sentiment (E: 62.7).
Earnings season starts today and key reports we’re watching include: JPM ($3.41), C ($1.66), WFC ($1.15), PNC ($3.60), BLK ($7.73), UNH ($6.24).
Finally, there’s one Fed speaker, Waller at 8:45 a.m. ET but he shouldn’t move markets (the Fed message is very consistent right now).
“Bottom line, the fundamental dynamics of the oil market changed this week with OPEC+’s announced production cut, which they said was geared towards regaining control of the markets and spooking speculators out of the market,” said analysts at Sevens Report Research, in a Thursday note. Click here to read the full article.
The surprise announcement also suggests OPEC+ may be getting more cautious about its outlook for global oil demand given the elevated threat of a potentially deep recession looming, says Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are tracking European markets higher this morning thanks to a cooler-than-expected inflation print in Europe while news flow was otherwise mostly quiet overnight.
Economically, Eurozone PPI for February came in at -0.5% vs. (E) -0.3% m/m but a still lofty 13.2% vs. (E) 13.5% y/y. Despite the still elevated annual figure, the lower than expected print is bolstering risk assets this morning.
Today, there are three economic reports to watch in the U.S. including: Motor Vehicle Sales (E: 14.9 million), Factory Orders (E: -0.4%), and JOLTS (E: 10.4 million). Investors will want to see more evidence of slowing growth and a weakening labor market to reinforce hopes for both a less-hawkish Fed and soft landing in order for the recent stock market resilience to continue.
Finally, there is one Fed speaker to watch late in the day: Mester (6:45 p.m. ET).
“The banks are the main driver of oil, and really all risk assets today, as fading confidence in the financial system is reigniting fears that another crisis may be looming after we saw some of the biggest bank failures since 2008 in early March,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
“However, the banks are the main driver of oil, and really all risk assets, as fading confidence in the financial system is reigniting fears that another crisis may be looming, after we saw some of the biggest bank failures since 2008 in early March,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher and are extending Wednesdays’ gains following better than expected inflation data overnight.
Spanish CPI, which was the first inflation indicator to warn of the stall in disinflation, rose just 3.3% y/y, less than the 3.8% expectation and much lower than the 6% y/y reading last month. That’s offering some initial hope that disinflation has restarted.
Today focus will be on economic data, with Jobless Claims (E: 195K) the key report, although we also get the Final Q4 GDP (E: 2.7%). There are also two Fed speakers today, including Collins (12:45 p.m. ET) and Barkin (12:45 p.m. ET) and markets will look for additional confirmation that the Fed has finally pivoted.
What’s in Today’s Report:
Money flows are decidedly risk off this morning with stock futures lower while Treasury yields fall sharply amid continued worries about the global banking system.
UBS shares are down more than 6% after Jefferies downgraded the bank following its acquisition of Credit Suisse while the bank is also under investigation regarding its bankers role in helping Russian oligarchs avoid sanctions following the Russian invasion of Ukraine.
Economically, measure of Core CPI in Japan came in hot at 3.5% vs. (E) 3.4% y/y while the European PMI Composite Flash was strong, jumping to 54.1 vs. (E) 52.0. Both data points have hawkish implication for respective central bank policy in the near term but banking fears are preventing a move higher in yields.
Looking into today’s session, there are two economic reports to watch: Durable Goods Orders (E: 1.5%) and the PMI Composite Flash (E: 49.3) while there is one Fed speaker: Bullard (9:30 a.m. ET). Markets want to see signs of slowing growth, but not a collapse, in the data, and a less hawkish tone from Bullard.
Bottom line, banks have reemerged as the primary influence on markets in the back half of the week and if the weakness in the sector continues today, stocks will have a very hard time extending yesterday’s modest bounce. Conversely if banks are able to stabilize, we could see the S&P 500 move back towards the 4,000 mark.