The market still views the Fed as the ‘most dovish’ global central bank, and as long as that’s the case, the dollar will have…said Tom Essaye, the founder and president of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are little changed this morning while overseas markets were down modestly overnight as a sense of trader paralysis grips global markets ahead of key catalysts due in the back half of the week.
Economically, Chinese PPI hit 9.0% vs. (E) 8.3% in May, the hottest reading since 2008, however, May CPI was 1.3% vs. (E) 1.5%, keeping inflation fears relatively subdued.
There are no market moving economic reports on the calendar for today and no Fed officials are scheduled to speak however the Treasury will hold a 10-Yr Note auction at 1:00 p.m. ET.
The Treasury auction could move markets today but only if there is a big surprise in the results as markets are more likely to continue to churn into tomorrow’s CPI report and ECB Announcement.
What’s in Today’s Report:
Futures are slightly lower on underwhelming economic data and as markets digest last week’s rally.
Economic data was slightly disappointing as Chinese exports missed expectations (27.9% vs. (E) 32.1%) as did German Manufacturers’ Orders (-0.2% vs. (E) 1.0%).
The G-7 agreed in principle to a global minimum corporate tax and that is weighing slightly on global markets. But, investors view implementation of the tax as taking a very, very long time (if it ever actually happens).
Today there are no notable economic reports and no Fed speakers so focus will be on any apparent infrastructure progress, although at this point any infrastructure deal likely won’t be big enough to provide material stimulus to the economy (and push markets higher).
What’s in Today’s Report:
Futures are modestly lower following mixed economic data while the Fed announced it’s winding down one of its pandemic era support programs.
Service PMIs for May were mixed as the Chinese PMI missed estimates while the EU & British PMIs were in-line with expectations, but none of the data is altering the expectation that the global economic recovery is on going.
The Fed announced it’s going to start selling assets from the “Secondary Market Credit Facility” which was the program the Fed used to buy corporate bonds to stabilize markets during March/April of 2020. This has nothing to do with QE, but it is a general reminder that we are seeing central banks removing market support as society returns to normal, and it’s a tangential reminder that tapering of QE is coming at some point.
Today’s focus will be on economic data as we get several notable reports today: ISM Services PMI (E: 63.1), Jobless Claims (E: 400k), and ADP Employment (627k). Generally speaking, markets will want to see “Goldilocks” data from all three reports – close to or better than expectations but not so good they make the Fed think more about tapering. We also have three Fed speakers: Bostic (12:30 p.m. ET), Harker (1:50 p.m. ET), and Quarles (E: 3:05 p.m. ET) but none of them should move markets.
Inflation not being temporary is easily the biggest long-term risk to this market, because it will cause the Fed to get more…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are drifting modestly higher following a generally quiet night of news.
Economic data was solid as European Commission Economic Sentiment beat estimates (114.5 vs. (E) 112.1) while the Japanese unemployment rate was in-line with expectations. But, neither number is moving markets.
Earnings overnight were very strong (especially in the retailers like COST) but questions remain about the sustainability of the results so they aren’t causing a big rally.
Today focus will be on the Core PCE Price Index (E: 0.7% m/m, 3.0% y/y). The market expects and has priced in a strong number, so something slightly above estimates should not cause a hawkish reaction (yields higher/stocks lower). But, if we see the Core PCE Price Index print close to 4% yoy, that would likely be a headwind on stocks (and push the 10 year yield towards 1.70%).
The market is basically in a holding pattern until the next big event, which is the Fed’s tapering schedule (or not tapering schedule), until we have more clarity on Fed tapering and the longer-term…wrote Tom Essaye, founder of Sevens Report, in a note. Click here to read the full article.
The market is basically in a holding pattern until the next big event, which is the Fed’s tapering schedule (or not tapering schedule), until we have more…said Tom Essaye, founder of Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher as markets ignore more Bitcoin volatility following a generally quiet weekend.
Bitcoin volatility remained elevated, with the cryptocurrency falling more than 10% over the weekend, and then bouncing back more than 5% this morning, but markets are ignoring the volatility so far today.
There were no notable economic reports over the weekend, nor any notable central bank speak.
Today there are multiple Fed speakers but we’ll be watching Brainard (9:00 a.m. ET) and Mester (11:00 a.m. ET) specifically to see if there’s any reference to thinking about tapering (if there is look for a small hawkish response from markets). Bostic (12:00 p.m. ET) and George (5:30 p.m. ET) also speak today but shouldn’t move markets.
What’s in Today’s Report:
Futures are modestly higher on momentum from Friday’s strong (but not too strong) jobs report.
Friday’s jobs report handily beat estimates (916k vs. (E) 660k) but the unemployment rate remained above 6% and wages were soft, so the number didn’t spike Treasury yields and futures rose Friday after the release.
There was no notable economic data or political news over the weekend and many foreign markets are closed for Easter Monday.
Today the key economic report is the ISM Services PMI (E: 58.6) and markets will want to see a strong number showing a continued rebound in the service sector. With many foreign markets closed, trading should be otherwise quiet but the 10 year yield is still key. It digested Friday’s strong jobs report well, but if we see a rally today towards 1.80%, that will be a headwind on stocks.