Posts

Jobs Day

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What’s in Today’s Report:

  • Key Levels To Watch in the Dollar Index and 10 Year Yield (Post Jobs Report)
  • Jobs Report Preview (Abbreviated Version)

Futures are solidly higher again following another quiet night as momentum continues to push the market to fresh highs, ahead of the jobs report.

There was no new geopolitical news overnight and international focus has now turned to whether the Ukrainian flight was hit by an Iranian missile.  That shift in focus is helping tensions to recede further.

Economic data was sparse as Japanese Household Spending missed estimates while Aussie Retail Sales beat expectations, but neither number is moving markets.

Today the key number is the Jobs Report, and expectations are as follows:  Jobs 158K, UE Rate 3.5%, Wages 0.3%/3.1%.  The key number is the wage data, but unless we see wages spike close to, or above 3.5% y/y, then the jobs report shouldn’t derail the rally.

Four Events that Could Cause a Correction

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What’s in Today’s Report:

  • Four Events that Could Cause a Correction

Futures are drifting cautiously higher this morning while international markets rallied overnight thanks to more upbeat economic data amid a static geopolitical backdrop.

There were no material developments regarding tensions between the U.S. and Iran overnight.

Economically, a Eurozone inflation reading (HICP) met expectations for the month of December while EU Retail Sales rose 1.0% in November, topping estimates of 0.6%.

Today, there are three economic reports to watch: International Trade (E: -$43.9B), Factory Orders (E: -0.7%), and the ISM Non-Manufacturing Index (E: 54.5). No Fed officials are scheduled to speak.

As far as other catalysts go, the Treasury will hold a 3-Yr. Note Auction at 1:00 p.m. ET and the results could move bond yields and have an impact on the yield curve. And if the curve compresses further (it has narrowed by more than 10 basis points over the last week), it could begin to pressure stocks.

Lastly, tensions between the U.S. and Iran remain a major market focus right now and further escalation could also weigh on risk assets, however, no news is good news regarding the situation right now, so if things continue to calm down in the Middle East, stocks could continue to drift back towards all-time highs.

Melt Up

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What’s in Today’s Report:

  • Year-End Melt Up:  Why Stocks Are Rallying Off Recycled Headlines
  • Weekly Jobless Claims:  Retracing the Thanksgiving Spike

Futures are modestly higher yet again following another quiet night of news as the melt-up continues into year-end.

Chinese Industrial Profits rose 5.4% in November, the first gain in three months, and this headline is mostly responsible for the gain in futures this morning.

Other economic data was mixed, as Japanese Industrial Production (-0.9% vs. (E) -1.4%) and Unemployment (2.2% vs. (E) 2.4%) beat estimates, while Retail Sales slightly missed (-2.1% vs. (E) -1.7%).

Today there are no notable economic reports nor any Fed speakers, and if should be a generally quiet day.

What a Difference a Year Can Make

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What’s in Today’s Report:

  • What A Difference a Year Can Make:  December 26th 2018 vs. December 26th 2019

Futures are marginally higher following a good report on retail sales by Mastercard.  Trading is quiet, however, as most of Europe, Hong Kong and Australia are closed for Boxing Day.

Mastercard (MA) posted preliminary estimates for 2019 holiday spending and they appear stronger than expectations, and that’s helping send futures higher.

There was no “Christmas surprise” from North Korea although a missile launch is still expected in the coming days (but even if it happens, it shouldn’t impact markets much).

The only notable number out today is Jobless Claims (E: 223K), and we’ll want to see the continued unwind of the Thanksgiving spike higher in claims that occurred two weeks ago.

Time to Buy Defense Stocks?

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What’s in Today’s Report:

  • Was that the Bottom in Boeing? (Time to Buy Defense Stocks?)
  • Durable Goods Takeaways (Not as Bad as It Appeared)

U.S. stock futures are marginally higher this morning while international markets were little changed overnight as news wires were very quiet and attendance is notably thin ahead of the Christmas holiday.

There were no economic reports overnight and no market-moving headlines have crossed since yesterday’s close.

Looking into today’s holiday-shortened session (the NYSE will close at 1:00 p.m. ET), there are no notable economic releases and no Fed officials are scheduled to speak.

The only potential market catalyst on the calendar is a 5-Yr Note Auction by the Treasury at 10:00 a.m. ET. Any significant moves in the belly of the yield curve could affect stocks today as computer trading will dominate the price action due to the low attendance ahead of Christmas.

If There’s a Pullback, Where Is Support? (Technical Update)

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What’s in Today’s Report:

  • If There’s a Pullback in Early 2020, Where Is Support? (Technical Update)

Futures are little changed this morning following another quiet night of news as markets digest the Q4 gains.

On trade, the House of Representatives passed the USMCA, as was widely expected and already priced in.

Economic data was largely in-line as Japanese CPI (0.5%) and German GfK Consumer Climate (9.7 vs. (E) 9.6) both met expectations.

Today focus will remain on economic data, and we have several more notable reports including, in order of importance: Core PCE Price Index (E: 0.2%), Consumer Sentiment (E: 99.2), Final Q3 ‘19 GDP (E: 2.1%).  The Core PCE Price Index, which is the Fed’s preferred measure of inflation, needs to continue to show subdued inflation pressures, as a sudden surge in inflation is the only thing that could get the Fed to become more hawkish.  Finally, today is a quadruple witching options expiration so don’t be shocked if there’s elevated volumes and some volatility into the close.

Is The Bond Market Finally Turning Positive on Global Growth?

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What’s in Today’s Report:

  • Is The Bond Market Finally Turning More Positive On Growth?
  • Another Brexit Worry?
  • EIA and Oil Market Update – No Breakout Yet

Futures are flat following a very quiet night of news.

Economic data was mixed as Australian jobs adds beat expectations (39k vs. (E) 18k) while British retail sales badly missed estimates in November (-0.6% vs. (E) 0.5%. But, neither number is moving markets.

On the earnings front, Micron (MU) had positive commentary and the stock rallied 5% after hours, and that’s helping broader market sentiment this morning (it’s the single biggest reason stocks are flat).

Today’s focus will remain on economic data, and there are three notable reports including (in order of importance):  Jobless Claims (E: 221K), Philly Fed (E: 8.5) and Existing Home Sales (E: 5.450M).

As has been the case, the stronger the data, the better, and if we get decent prints from these reports, we’ll be looking at 3200 in the S&P 500 shortly after the open.

Market Multiple Update: As Good As It Gets?

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What’s in Today’s Report:

  • Market Multiple Update: As Good As It Gets?
  • Economic Data Recap

It is another slow morning in the markets as stock futures are tracking the modest gains of overseas equities amid good economic data but underwhelming earnings news.

FDX shares are down 7% in pre-market trading after the company missed on earnings and lowered 2020 guidance.

The German Ifo Survey showed improving economic sentiment in Europe’s largest economy with both Current Conditions and Business Expectations figures topping estimates which is helping EU stocks edge higher this morning.

Looking into today’s session, it is lining up to be another quiet day as there are no economic reports and only one Fed official is scheduled to speak: Evans (12:40 p.m. ET).

Was the Jobs Report an “All Clear” on the Economy?

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What’s in Today’s Report:

  • Was the Strong Jobs Report an “All Clear” on the Economy?
  • Weekly Market Preview:  What Happens on December 15th?
  • Weekly Economic Cheat Sheet:  A Busy Week or Reports (They Start on Wednesday)

Futures are slightly lower as markets digest Friday’s big rally following a generally quiet weekend.

On U.S./China trade, there was no new news, although China released a statement saying it wanted to make a deal “as soon as possible.”

Economic data was again mixed, as Chinese exports missed estimates (1.3% vs. (E) 1.9%) while German exports beat expectations (1.2% vs. (E) -0.3%.  But, neither number is moving markets.

Today there are no notable economic reports and no Fed speakers (they are in their blackout period ahead of Wednesday’s decision) so focus will again be on any updates on U.S./China trade.

The December 15th tariff increases are the last “big” event of 2019 and markets fully expect those to be delayed, so any confirmation of that should be a mild tailwind on stocks.  Conversely, any hints the tariffs might go into effect will hit markets, potentially hard.

Technical Update (Key Support and Resistance Levels)

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What’s in Today’s Report:

  • Technical Update (Key Support and Resistance Levels to Watch)
  • Jobs Report Preview (Still a Very Important Report)
  • EIA/Oil Market Update

Futures are modestly higher mostly on momentum from Wednesday’s rally, following a quiet night of news.

On trade, China’s Ministry of Commerce said the two sides remained in close communication, but we already knew that and there were no new/notable trade headlines overnight.

Economic data was notably bad.  EU Retail Sales, German Manufacturers’ Orders, Australian Exports and Australian Retail sales all badly missed expectations, and while you wouldn’t know it according to stocks, the outlook for the global economy remains uncertain.

Today there is just one economic report to watch, Jobless Claims (E: 220K) and one Fed speaker: Quarles (10:00 a.m. ET).  So, as has been the case all week, markets will trade-off any new U.S./China trade commentary or headlines.  But barring negative news, the path of least resistance for stocks today appears higher once again.