The rise in the dollar was certainly a renewed headwind for oil and all commodities, prompting some cross-asset funds…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 trading cautiously higher this morning while international equities were mixed overnight as markets attempt to stabilize following last week’s volatile, Fed-induced declines.
News flow was quiet over the weekend as there were no major economic releases or central bank developments however the yield curve remains in focus as several key spreads have flattened to multi-month lows on hawkish policy expectations and a more cautious growth outlook.
There are no notable economic reports and no Fed officials are scheduled to speak today.
The lack of market catalysts will leave investors to continue to digest last week’s Fed developments and closely monitor the bond markets for further clues on expectations for both monetary policy and the state of the economic recovery.
Stock futures are flat this morning as a sense of Fed paralysis grips global markets ahead of…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower as markets digest yesterday’s more hawkish than expected FOMC meeting.
The U.S. dollar is surging this morning off the more hawkish than expected Fed and gold is getting hit hard as currency markets re-price for a less dovish Fed.
Economically the only notable number was the Australian Labour Force Survey, which handily beat expectations (115k job adds vs. (E) 30k), reflecting the global nature of the economic recovery.
Today there are two notable economic reports, Jobless Claims (E: 364K) and Philadelphia Fed manufacturing Index (E: 30.8) but unless either number is a substantial surprise, they shouldn’t move markets. Instead, markets will be watching the dollar and Treasury yields for reaction to the Fed. If both rally hard throughout the day, that will pressure stocks further as it erodes some of the “dovish Fed” support that’s helped the S&P 500 rally to recent highs.
What’s in Today’s Report:
Stock futures are flat this morning as a sense of Fed paralysis grips global markets ahead of the FOMC announcement while economic data disappointed overnight.
Chinese Fixed Asset Investment, Industrial Production and Retail Sales data all missed estimates for the month of May which resulted in Asian markets underperforming overnight.
Looking into this morning’s trading session, there are two lesser followed economic reports due to be released: Housing Starts (E: 1.630M) and Import & Export Prices (E: 0.7%, 0.7%) but neither release should move markets with the Fed looming.
The Biden-Putin meeting in Geneva will also get media attention but it is very unlikely to actually impact markets. Treasury Secretary Janet Yellen’s testimony before Congress regarding Biden’s budget (10:00 a.m. ET), however, could move markets as she will likely be discussing taxes and any hint of a material hike in capital gains rates or corporate tax rates could weigh on markets even ahead of the Fed.
Today’s main event for the markets will of course be the conclusion of the June Fed meeting with the FOMC Meeting Announcement at 2:00 p.m. ET and then Fed Chair Powell’s Press Conference at 2:30 p.m. ET. If anything causes tapering expectations to be pulled forward towards September or evidence emerges of plans to raise rates in 2022, that will be viewed as hawkish and cause significant volatility across assets classes. Otherwise, an “as expected” or dovish meeting outcome will likely result in equities continuing to trade at or near all-time highs.
What’s in Today’s Report:
Futures are slightly higher following a quiet weekend as markets look ahead to Wednesday’s FOMC decision.
The G-7 meeting in England produced a lot of headlines including broad agreement on a minimum corporate tax. But there were little specifics of any new policies released and the meeting won’t impact markets.
Economic data was sparse as the only notable number was Eurozone Industrial Production which rose 0.8% vs. (E) 0.4%.
Today there are no economic reports and no Fed speak (the Fed meeting starts tomorrow so officials are in their “quiet period” ahead of the meeting) so for markets to extend last week’s rally we’ll need to get corporate commentary that confirms inflation pressures are “peaking.” Absent that, I’d expect stocks to largely tread water ahead of Wednesday’s FOMC decision.
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.
