Looking ahead, the outlook for gold is still bullish and “the level to beat for futures to begin a new leg in the current uptrend is the 2022 high close of $2,058” an ounce, analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.
We do see them [commodities] as stretched in the short term… said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following a generally quiet weekend of news.
Chinese economic data was better than expected as Q1 GDP rose 4.8% vs. (E) 4.2%, but concerns remain about future economic growth given continued lockdowns (concerns about future Chinese growth is a headwind on global stocks right now).
Geopolitically there was no change in the Russia/Ukraine war as fighting ranges in eastern Ukraine and there is no reason to expect a cease fire anytime soon.
Today the key report is the Housing Market Index (E: 78) and we’ll be looking for any signs that mortgage rates at 10+ year highs are starting to slow the housing market. We also get one Fed speaker, Bullard (4:00 p.m. ET), and we can expect him to be hawkish (but the market already knows that).
Finally, this is a big week for earnings and some important reports today include: BAC ($0.76), SCHW ($0.85), JBHT ($1.91).
What’s in Today’s Report:
Stock futures are attempting to stabilize this morning while global shares were mixed overnight as traders assess the latest economic data ahead of today’s unofficial start to Q1 earnings season and another important U.S. inflation print.
Economic data was negative and again pointed to stagflation overnight as Japanese Machine Orders plunged -9.8% vs. (E) -1.5% while U.K. CPI jumped to 7.0% vs. (E) 6.7%.
Today is lining up to be a very busy session from a news flow and catalyst standpoint as we kick off Q1 earnings season with reports from: JPM ($2.73), BLK ($8.92), and DAL (-$1.33) ahead of the bell. Investors will be looking for solid results to confirm the strength and resilience of corporate America.
Then we will get the March PPI report at 8:30 a.m. ET (E: 1.1%, 10.6%), but as long as the headlines are not materially hotter than expected, and the “core figures” are in line with estimates, stocks could mount a relief rally as the market has become near-term oversold.
In the afternoon, there is one Fed speaker: Barkin (12:30 p.m. ET) as well as a 30-Yr Treasury Bond auction at 1:00 p.m. ET. And if bond yields hold below the highs from earlier this week, that should be an additional tailwind for stocks today, especially the beaten-down tech sector.
What’s in Today’s Report:
Futures are modestly lower as Chinese inflation stayed high while the Russia/Ukraine war may be intensifying.
Chinese PPI rose 8.3% vs. (E) 8.1% while CPI gained 1.5% vs. (E) 1.4%, underscoring that inflation has not yet peaked in China.
Geo-politically, Russia is poised for a large assault on eastern Ukraine and analysts are anticipating some of the more intense fighting of the war.
Today there are no economic reports but there are several Fed speakers including Bostic (9:30 a.m. ET), Williams (12:00 p.m. ET) and Evans (12:40 p.m. ET) and we expect them to continue the trend of guiding markets towards a 50 bps hike in May and endorsing the idea of 250 basis points of tightening by year-end (but that shouldn’t move markets as that is already well known).
What’s in Today’s Report:
Futures are slightly higher mostly on momentum from Thursday’s close, following a quiet night of news.
The global trend in central banks turning more hawkish continued overnight as the Reserve Bank of India left rates unchanged (as expected) but warned that inflation was too high.
Geopolitically, a Kremlin spokesman said that Russia hoped to end its “operation” in Ukraine in the coming days or weeks, although analysts are skeptical of the promise.
Today there are no notable economic reports nor any Fed speakers, so between the sparse calendar and the Masters, I’d expect a relatively slow day. That said, if we get any geo-political headlines from Russia that imply a sooner than expected cease-fire, then stocks can extend Thursday’s rally.
What’s in Today’s Report:
Futures are bouncing slightly following a quiet night as markets digest the declines of the past two days.
Economic data was mixed overnight as German Industrial Production missed estimates while Euro Zone Retail Sales beat expectations, but neither number is moving markets.
Geopolitically there was no new news on Russia/Ukraine as the conflict continues with little signs of any progress towards a cease fire.
Today we get one notable economic report, Jobless Claims (E: 202K) but three Fed speakers: Bullard (9:00 a.m. ET), Evans (2:00 p.m. ET) and Williams (4:05 p.m.). We expect each of them to further hammer the point that rates are rising by 50 bps in May, with balance sheet reduction beginning in the same month. But, as long as they don’t say anything “hawkishly new” then stocks should be able to look past the commentary.
We must acknowledge the challenges ahead, and be ready with a plan to insulate ourselves from volatility and protect portfolios…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
The market has, to a degree, called the Fed’s bluff on rate hike plans as rate hike expectations were dialed back in the immediate wake of the dot plot release and economic projections, but the Fed is indeed tightening policy and regardless of the pace of the trend, yields are going higher in the months and quarters ahead, said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures recovered from overnight losses as investors digest President Biden’s State of the Union speech, and a slight de-escalation in the Russia-Ukraine conflict.
Geopolitically, President Biden announced that the U.S. would close its airspace to Russian planes during the open of his State of the Union address, however overnight, Russia expressed willingness to resume talks with Ukrainian leadership today and that is raising hopes for a ceasefire deal, fueling moderate risk-on money flows.
Economically, the Eurozone HICP Flash was hot with the headline jumping to 5.8% vs. (E) 5.3% which is adding to angst about stagflation.
Today, there are a few data points to watch including: Motor Vehicle Sales (E: 14.6M) and the first look at official February jobs data in the form of the ADP Employment Report (E: 320K).
Additionally, there are two Fed speakers around the time of the open: Evans (9:00 a.m. ET) and Bullard (9:30 a.m. ET) before Fed Chair Powell will begin his semi-annual Congressional testimony at 10:00 a.m. ET.
Bottom line, the Russia-Ukraine conflict will continue to dominate the headlines and markets today, and any de-escalation could trigger a further relief rally. However, investors will be watching Powell closely for any signs of a change in policy which could also impact markets.