Physical demand is so high with this looming storm in the Northeast that the February futures contract got piled into for those looking to reload stockpiles they expect to offload…explained Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher as China made two surprise interest rate cuts overnight, helping stocks bounce from Wednesday’s late-day declines.
China’s central bank made two small surprise interest rate cuts overnight which helped Asian stocks rally (Hang Seng up 3%) and that’s pushing U.S. futures higher.
Today focus will be on economic data and earnings, and for stocks to extend the early morning rebound we need to see stable data and solid earnings (meaning no extreme cost pressures). Economically, the key report today is the Philly Fed Manufacturing Index (E: 19.1). If it suddenly plunges as Empire did on Tuesday, that will slightly increase anxiety about the economy. We’ll also be watching Jobless Claims (E: 207K) and Existing Home Sales (E: 6.40M).
On the earnings front, the key report today is NFLX ($0.82) after the close, but we’ll also be watching: AAL (-$1.54), TRV ($3.86), UNP ($2.60), CSX ($0.41) and PPG ($1.19). If margins are much weaker than expected, look for more earnings-related volatility.
What’s in Today’s Report:
Futures are slightly higher following mixed economic data as markets look ahead to today’s jobs report.
Markets are looking for any signs inflation has peaked but that was not the case in Europe today as EU HICP (their CPI) rose 5.0% vs. (E) 4.8%. Economic growth was also solid (EU Retail Sales beat estimates) so the high inflation number isn’t hitting stocks ahead of the jobs report.
Today focus will be on the Employment Situation Report and estimates are: Job Adds 400K, UE Rate 4.1%, Wages 0.3% m/m & 4.1% y/y. Markets will be especially sensitive to a “Too Hot” number as that will further stoke fears of a more hawkish Fed and a “Too Hot” report will hit stocks. There are also three Fed speakers today, Daly (10:00 a.m. ET), Bostic (12:15 p.m. ET) and Barkin (12:30 p.m. ET) and while they aren’t Fed leadership, if they are “hawkish” and talk about March rate hikes or balance sheet reduction, that will be a headwind on stocks.
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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:
S&P 500 futures are trading at a fresh record high as investors shrug off rising COVID cases while global markets rallied following fresh monetary stimulus from China.
The PBOC injected 200B yuan to help meet end-of-year demand for cash, the largest injection since October which is easing liquidity and adding to risk-on money flows.
Japanese Industrial Production surged 7.2% vs. (E) 1.8% in November, bolstering hopes that the economic recovery is regaining momentum.
This morning, there are two reports on the housing market due to be released: Case-Shiller Home Price Index (E: 1.0%), FHFA House Price Index (E: 0.7%) but neither should move markets.
There are no Fed speakers today but there is a 5-Year Treasury Note auction at 1:00 p.m. ET that could impact that bond markets and potentially equities but with the calendar otherwise pretty clear, a continued “Santa Claus rally” appears to be the path of least resistance for equities this week.
What’s in Today’s Report:
Futures are marginally higher as studies and articles continue to be released that confirm that the Omicron variant results in much fewer severe COVID cases.
Over the past 48 hours, studies from South Africa, Denmark, and England and numerous articles (Washington Post, Bloomberg, WSJ) have all generated the same conclusion, that Omicron results in substantially fewer severe
COVID cases and that confirmation is easing COVID anxiety.
Today there is a lot of economic data but the most important report is the Core PCE Price Index (E: 0.4% m/m, 4.5% y/y). As long as it’s not materially worse than feared, it likely won’t hit markets. And, if the data comes in better than expected, that will add to the idea that inflation pressures have peaked, and we could easily see an extension of this week’s rally.
Other data today includes Durable Goods (E: 1.5%), Jobless Claims (E: 205k), New Home Sales (E: 770k), and Consumer Sentiment (E: 70.4), but barring a major surprise those numbers shouldn’t move markets.
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:
Futures are modestly higher following a generally quiet night as markets await the latest readings on inflation via today’s CPI and inflation expectations index in Consumer sentiment.
Economic data slightly underwhelmed as UK Industrial Production (1.3% vs. (E) 1.4%) and UK GDP (0.9% vs. (E) 1.0%) both missed expectations.
There were no notable Omicron updates overnight.
Today the focus will be on inflations via the Consumer Price Index (E: 0.7% m/m, 6.8% y/y) and the inflation expectations index in the Consumer Sentiment report (E: 67.0). Markets are already expecting the Fed to materially accelerate the pace of tapering of QE next week, but if these inflation readings come in much hotter than expected, that likely will be a headwind on stocks as it will only encourage the Fed to get even more aggressive in tapering QE.
Tom Essaye, founder of the Sevens Report, discusses how futures are reversing Monday’s gains. He also talks about the market impact of the Omicron variant…Click here to watch to the full interview.
What’s in Today’s Report:
Stock futures are slightly lower this morning following a mostly quiet night of news as investors look ahead to several important economic releases in the U.S. today.
Economic data was in-line to slightly better than expected overnight while the Xi-Biden talks, while largely uneventful, did help to modestly improve general market sentiment.
Today, focus will be on economic data early with Retail Sales (E: 1.0%), Import & Export Prices (E: 0.9%, 0.7%), and Industrial Production (E: 0.9%) all due out ahead of the opening bell while the Housing Market Index (E: 80) will be released at the top of the 10:00 a.m. hour (ET).
Additionally, there are several Fed speakers today: Bostic (12:00 p.m. ET), Harker (2:55 p.m. ET), and Daly (3:30 p.m. ET) and the market will continue to look for patient remarks that suggest the pace of the taper will not be accelerated and rate hikes will not be pulled forward from late 2022.
