Since those lows near 3,800 in the S&P 500 there has been real progress: China is reopening and hopefully the economy will be close to operating at near-full capacity within a month. That will add a large tail-wind to the global economy, and perhaps most importantly, ease supply chain stress…Tom Essaye of the Sevens Report said in a note. Click here to read the full article.
What’s in Today’s Report:
Stock futures are modestly lower this morning as bond yields continued to rise overnight thanks to a more hawkish than expected central bank decision.
The RBA raised rates by 50 bps vs. (E) 40 bps overnight citing elevated inflation pressures which have rekindled fears about more aggressive monetary policy globally.
Meanwhile, economic data was soft as German Manufacturers Orders fell -2.7% vs. (E) 0.5% which underscores the recent loss of momentum in economic growth.
Looking into today’s session, there is just one economic report: International Trade in Goods (E: -$90.2B) which is not likely to materially move markets while no Fed officials are scheduled to speak.
That will leave investors focused on the latest move higher in yields as that was the main reason for the steady fade in stocks yesterday. To that point, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET that could move the bond market, and for stocks to move higher today, we will need to see yields level out.
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.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report told CNBC. Click here to read the full article.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases, because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report said. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed following a quiet night of news.
Economic data was mixed as final May manufacturing PMIs were in-line with expectations for the EU and UK, although German Retail Sales missed estimates (–5.4% vs. (E) -0.1%).
On the Fed front, Bostic said his comments about a “pause” on rate hikes shouldn’t be interpreted that the Fed will help rescue volatile markets.
Today focus will be on economic data and Fed speak via the ISM Manufacturing PMI (E: 54.5), JOLTS (E: 11.40M) and comments by Williams (11:30 a.m. ET) and Bullard (1:00 p.m. ET). Bottom line, the ideas of slowly moderating (but not collapsing) growth and the possibility for a Fed “pause” in rate hikes in late summer/early fall have helped stocks rally, and as long as today’s data and Fed speak don’t refute those possibilities, stocks can extend the recent rally.
What’s in Today’s Report:
Stock futures are moderately lower this morning, tracking losses in EU shares amid renewed inflation concerns.
German CPI jumped to 7.9% vs. (E) 7.5% and the Eurozone HICP Flash rose to 8.1% vs. (E) 7.7% in May. Additionally, the EU agreed to a partial ban on Russian energy imports which has sent oil to multi-month highs, compounding inflation fears this morning.
Looking into today’s session, there are three economic reports due to be released: Case-Shiller Home Price Index (E: 2.2%), FHFA HPI (E: 1.9%), and Consumer Confidence (E: 104.0). Investors will want to see the latter report at least meet estimates as the health of the U.S. consumer has become less certain in the face of lofty inflation pressures.
Finally, there are no Fed officials speaking today but Powell is set to meet with Biden at the White House at 1:15 p.m. ET. And following Waller’s more hawkish comments about suggesting 50 bp hikes until inflation is back at 2% from yesterday, any insight to the Fed’s policy plans after the summer rate hikes, which are solidly priced in, will move markets (more aggressive policy expectations could hit stocks today).
This two-day rally in the market is mostly built on the premise that the Fed may ‘pause’ rate hikes after the two 50-bps adjustments this summer…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher as incrementally positive macro news offset more disappointing tech earnings.
Nvidia earnings underwhelmed and the stock fell 5% after hours, and that is weighing on tech this morning.
But, not as hawkish as feared in FOMC minutes and the continued reopening of Shanghai offset the soft NVDA earnings.
Today’s focus will be on economic data via the Revised Q1 GDP (-1.4%), Jobless Claims (E: 208K), and Pending Home Sales (E: -1.3%). Given the recent weakness in other economic data, the market will want to see stability in the numbers to continue to push back on stagflation concerns.
What’s in Today’s Report:
Futures are moderately higher mostly on momentum from Friday’s rebound following a generally quiet weekend.
COVID news from China remains mixed as Shanghai continues to relax lockdowns although Beijing is seeing a continued increase in cases (keeping the threat of more lockdowns alive).
The dollar is down one percent after ECB President Lagarde signaled two rate hikes were likely in the 3rd quarter (this was a bit more hawkish than expected).
Today there are no notable economic reports and just one Fed speaker, Bostic (12:00 p.m. ET). If Bostic echoes Bullard’s slightly less hawkish than feared commentary from Friday afternoon, then stocks can extend Friday’s rebound.
