Yesterday’s FOMC decision and Powell’s presser was both positive and negative for markets, but in the end, it mostly reinforced what we know: The Fed is serious about raising rates, that’s going to continue to…Tom Essaye, founder of Sevens Report, said in a note. Click here to read the full article.
What’s in Today’s Report:
Stock futures are firmly higher as trader focus shifts ahead to the Fed while investors digest mostly upbeat earnings.
MSFT initially fell by 7%+ after earnings yesterday but a positive outlook by management during the investor call has helped shares turn positive and rise by more than 4%.
Looking into today’s session, there are two economic reports due out this morning: International Trade in Goods (E: -$95.1B) and New Home Sales (E 760K) but neither should move markets ahead of the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) which will be the main events today.
Earnings today include: BA (-$0.09), T ($0.76), FCX ($0.96), PGR ($0.99), TSLA ($2.26), INTC ($0.90), STX ($2.36), RJF ($1.77).
Bottom line, the market is coiled up after the volatile start to the week and whether the Fed is dovish or hawkish today will decide whether we see a relief rally or break down to new lows.
What’s in Today’s Report:
Futures are trading off of the overnight lows but still down roughly 1% as yesterday’s volatile session is digested ahead of the Fed while IBM posted strong Q4 earnings yesterday and economic data largely met estimates overnight.
The FOMC meeting begins today which will increasingly capture trader focus ahead of tomorrow’s announcement and press conference.
Economically, we get two reports on the housing market this morning: the Case-Shiller Home Price Index (E: 1.0%) and the FHFA House Price Index (E: 1.0%) but Consumer Confidence (E: 111.9) will be the more important number to watch given the growing uncertainty about the state of the economic recovery. Another bad print like we saw with yesterday’s Composite PMI Flash could send stocks lower.
There is a 5-Yr Treasury Note auction at 1:00 p.m. ET and investors will be looking for strong demand (which would reflect dovish shifting Fed expectations) as we saw with yesterday’s 2-Yr auction which helped stocks bottom and reversed so sharply in intraday trade.
Finally, on the earnings front, we will hear from: JNJ ($2.12), VZ ($1.28), GE ($0.83), MMM ($2.03), and AXP ($1.78) before the open, and then MSFT ($2.29), TXN ($1.95), and COF ($5.14) after the close.
What’s in Today’s Report:
Futures are little changed following Wednesday’s sell-off, as solid economic data is helping sentiment.
The Chinese December Composite PMI beat estimates at 53.0 vs. (E) 51.2, the second straight better than expected data point from China. UK Composite PMI also beat estimates, imply a resilient economy in response to Omicron.
President Biden and Senator Manchin are set to resume negotiations on “Build Back Better” signaling the legislation isn’t dead (again passage of this in Q1 shouldn’t shock markets but it will not likely be a major market influence, either).
Today’s focus will be on economic data, specifically Jobless Claims (E: 205K) and the ISM Services PMI (E: 67.0). If the data is very strong, will that increase concerns the Fed will get even more hawkish, and that will pressure stocks again.
What’s in Today’s Report:
U.S. futures are trading lower with most global equity markets after some negative Omicron headlines while investor focus shifts ahead to this week’s central bank meetings.
Initial studies in South Africa show the PFE vaccine has a lower efficacy rate against Omicron, rekindling concerns about the strain potentially leading to new restrictions or lockdown measures around the globe.
Economically, EU Industrial Production grew 1.1% vs. (E) 1.2% in October and the U.S. NFIB Small Business Optimism Index came in at 98.4 vs. (E) 98.3 but neither release materially changed the outlook for central bank policy.
Looking into today’s session, there is one inflation data point due ahead of the bell: PPI (E: 0.5%) but unless it is a material surprise against expectations, it should not move markets with the December FOMC meeting getting underway.
Bottom line, the focus has largely turned to this week’s central bank meetings, most importantly the FOMC, so it is likely that we see a form of “Fed paralysis” grip the markets between now and tomorrow afternoon’s meeting announcement, barring any unforeseen surprises regarding Omicron.
What’s in Today’s Report:
Stock futures are little changed near record highs as a sense of Fed paralysis grips the markets ahead of the FOMC announcement today.
Economic data overnight was slightly better than expected (both the Chinese PMI Composite and Eurozone Unemployment rate beat) but the market reaction was limited with the Fed in focus.
This morning, there are several fairly important economic reports to watch as the ADP Employment Report (E: 400K) kicks off jobs week before the bell, and then we get both Factory Orders (E: 0.1%) and the ISM Services Index (E: 61.9) shortly after the open. Unless there are major surprises in any of the reports, however, the market impact should be limited with the Fed looming.
After the data is released, markets are likely to quiet down ahead of the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) which will be the session’s main events.
Finally, earnings will continue to roll out with CVS ($1.79), MAR ($0.97), and HUM ($4.61) releasing results before the open, and ROKU ($0.06), QCOM ($2.26), and MGM (-$0.04) reporting after the close.
What’s in Today’s Report:
U.S. futures are trading slightly lower along with most overseas markets following mostly inline economic data and a less-hawkish-than-feared RBA meeting outcome.
The RBA struck a slightly dovish tone in their latest meeting announcement, especially with regard to inflation, which is pressuring bond yields this morning.
Today is lining up to be a fairly slow day with just one economic data point due out: Motor Vehicle Sales (E: 12.4M) while the focus will begin to shift to the November FOMC meeting which begins this morning.
There is a 52-Week Treasury Bill auction at 11:30 a.m. ET and while it is not typically a widely followed auction, the results could shed new light on investor expectations for rate hikes next year, and therefore could impact markets ahead of tomorrow’s Fed announcement.
Lastly, earnings season remains in full swing with several notable results due out today from: PFE ($1.08), UAA ($0.15), COP ($1.53), ZG ($0.16), TMUS ($0.54), LYFT (-$-0.04), PGR ( $1.09).
What’s in Today’s Report:
Stock futures are extending yesterday’s late session bounce while most overseas markets stabilized overnight amid easing concerns about China’s property sector and positioning into the Fed.
According to Bloomberg, S&P Global Ratings said Evergrande is “on the brink of default” but that a contagion effect impacting other developers is unlikely at this time and that the Chinese government would intervene if necessary which eased some concerns surrounding the issue.
Looking into today’s session, trader focus will be shifting towards the September FOMC meeting, which begins this morning, and that could influence a sense of Fed paralysis if broad market volatility continues to ease.
Economically, there is one report today: Housing Starts and Permits (E: 1.575M, 1.610M) but given all of the other market influences right now, it is not likely to move equities. Finally, there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET which could impact bond yields and potentially influence price action in stocks but again, it is unlikely with the Fed looming tomorrow.
Bottom line, the pieces are falling into place for the market to stabilize today as yesterday’s volatility is digested and focus shifts to the Fed. On the charts, a break above yesterday’s open near 4,400 in the S&P could trigger some follow-through buying while a failure to do so would leave the door open to another surge in volatility in the sessions ahead.
What’s in Today’s Report:
Stock futures are slightly lower as investors digest dovish central bank developments, mixed inflation data out of Europe and look ahead to the release of the Fed minutes.
The Reserve Bank of New Zealand unexpectedly left rates unchanged at 0.25% (E: 0.50%) citing COVID-19 uncertainties which crashed the kiwi to a fresh 9-month low overnight.
Economically, Eurozone HICP met estimates however U.K. PPI ran slightly hot versus expectations while revisions were to the upside which is keeping inflation concerns elevated for now.
Looking into today’s session, it should be a fairly slow morning as far as news flow goes with just one economic report to watch: Housing Starts (E: 1.61M) and no Fed officials scheduled to speak.
Then in the afternoon investors will be watching a 20 Year T-Note auction at 1:00 p.m. ET before the FOMC Meeting Minutes are released at 2:00 p.m. ET. Yesterday, there was a reversal higher in yields from overnight lows in the wake of the not-as-bad-as-feared Retail Sales report so the risk appears to be to the upside for yields which could weigh on big-cap growth names and drag major indexes lower if a rise in yields gains momentum.
What’s in Today’s Report:
Futures are modestly lower again for the same reasons as Monday: Global equity pressure following another sharp decline in Chinese shares (Hang Seng was down 4% again).
There was no new regulatory news from China overnight but fears remain and sellers remained aggressive.
There were no notable economic reports overnight.
Today there are three notable economic reports, Durable Goods (E: 2.1%), Cash-Shiller Home Price Index (E: 1.5%) and U.S. Consumer Confidence (E: 124.9) but unless there’s a major surprise from one or more, I don’t expect them to move markets and with the Fed looming tomorrow and key earnings after the close, today shouldn’t be too volatile.
On the earnings front, today is probably the biggest single day of earnings of the season, and key reports (mostly after the close) include: AAPL ($1.00), AMD ($0.54), MSFT ($1.90), GOOGL ($19.89), UPS ($ 2.75), and MMM ($2.25).