Sevens Report Research Founder and President Tom Essaye to discuss the expectations for the Fed’s upcoming FOMC minutes meeting, the future of Fed policy pathway, why investors should remain on recession watch in 2023, and the outlook for markets. Click here to watch the full discussion.
What’s in Today’s Report:
U.S. equity futures are little changed this morning following yesterday’s steep losses as Treasuries have stabilized ahead of today’s Fed meeting minutes release.
Economically, German CPI met estimates at 8.7% y/y but that remains a historically very high reading which continues to warrant aggressive policy from the ECB in the months ahead.
Looking into today’s session, there are no notable economic reports which will leave investors primarily focused on the FOMC meeting minutes release (2:00 p.m. ET). Before that release, the Treasury will hold a 5-Yr Note auction at 1:00 p.m. ET which could move bond markets, and if we see new highs in yields, expect additional pressure on stocks.
Finally, the Fed’s Williams speaks after the close at 5:30 p.m. ET and his comments could move markets in after-hours trading if he is materially hawkish.
What’s in Today’s Report:
Futures are sharply lower on continued momentum from Thursday’s late day drop and following hot German inflation data and strong UK retail sales.
German CPI didn’t decline as much as hoped, falling –1.0% vs. (E) -1.6% and rising 17.8% vs. (E) 16.0%. UK Retail Sales were also better than expected (0.5% vs. (E) -0.3% and the two reports are combining with yesterday’s hot US PPI to push rate hike expectations higher.
Today focus will remain on data and Fed speak. The two notable economic reports are Import & Export Prices (E: -0.1%, -0.2%) and Leading Indicators (E: -0.3%). The first deals with inflation and the second deals with growth, and if inflation is hot and growth is cool, expect more selling pressure.
There are also two Fed speakers today, Barkin (8:30 a.m. ET) and Bowman (8:45 a.m. ET) and we should expect them to sound hawkish (as most Fed speakers have been this week).
The release plans were part of a congressional-mandate related to annual budgets that has been in place for almost a decade, Tyler Richey, co-editor of Sevens Report Research, told MarketWatch. But “when traders see an SPR release headline cross the wires, they think ‘more supply on the market’ and hit the sell button first and ask questions later.” Click here to read the full article.
What’s in Today’s Report:
Futures are flat following a quiet night and as solid CSCO earnings are helping stocks hold yesterdays’ gains.
CSCO beat estimates and raised guidance and the stock is up 4% pre-market and that’s helping broader sentiment.
Economically, the only notable number was the Chinese Home Price Index (in-line at –1.5%).
Today focus will remain on economic data and the key reports are (in order of importance): Philly Fed (E: -7.2), PPI (E: 0.4%m/m, 5.5% y/y), Jobless Claims (E: 200K) and Housing Starts (E: 1.365M). As has been the case, solid data that implies a “No Landing’ scenario should support stocks, as long as yields don’t spike too much.
We also have several Fed speakers today including Mester (8:45 a.m. ET), Bullard (1:30 p.m. ET) and Cook (4:00 p.m. ET) although they shouldn’t move markets.
What’s in Today’s Report:
U.S. equity futures are lower despite a stable Treasury market and better-than-feared inflation data overseas as investors continued to assess post-CPI Fed policy expectations.
U.K. CPI fell to 10.1% vs. (E) 10.3% in January down from 10.5% in December which sent the pound lower. Despite the bigger than expected drop, however, inflation remains far too high in the U.K. and more aggressive policy will be warranted to get price pressures back down towards the BOE’s target over time.
Today, focus will be on economic data as there are several important reports due to be released including: Retail Sales (E: 1.7%), Empire State Manufacturing Index (E: -18.5), Industrial Production (E: 0.5%), and the Housing Market Index (E: 37).
As has been the case lately, investors will be looking for signs of moderation in growth metrics (but not an all out collapse) and faster declining price readings to keep the hopes of a soft/no landing alive. Otherwise, it will be difficult for stocks to resume their 2023 advance.
There are no Fed officials scheduled to speak today but there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET and if demand is weak and yields begin to add to yesterday’s upward moves, stocks could come for sale.
What’s in Today’s Report:
Stock futures are modestly higher thanks to good economic data overnight as traders await today’s U.S. CPI report and more Fed speak.
Economically, the U.K.’s Unemployment Rate held steady below 4% but wage growth favorably slowed to 5.9% in January from 6.5% in December.
Meanwhile the NFIB Small Business Optimistic Index in the U.S. met estimates at 90.3 which saw S&P 500 futures hit new pre-market highs at the top of the 6:00 a.m. hour ET.
Today, focus will be on economic data early with CPI (E: 0.5% m/m, 6.2% y/y) and Core CPI (E: 0.3% m/m, 5.5% y/y) due out before the opening bell. Cooling inflation pressures have largely been priced in recently so a low print could see stocks add to YTD gains, but the risk is for a hot print to spark a significant wave of selling amid further hawkish shifting money flows across asset classes.
Moving through the day, there are three Fed speakers to watch: Logan (11:00 a.m. ET), Harker (1:00 p.m. ET), and Williams (2:05 p.m. ET) and they will all likely echo the hawkish tone coming from other Fed officials recently but their comments should not have a major impact on markets.
Earnings season is winding down but a few notable companies reporting today include: KO ($0.45), MAR ($1.84), ABNB ($0.27).
Tom Essaye, founder and president of Sevens Report Research and Andrew McCreath, founder at Forge First Asset Management, join BNN Bloomberg to discuss the latest large-cap earnings reports. Essaye says that Uber’s strength this season is a signal that life is getting back to normal and discusses how diversification will be imperative for companies to succeed amid the growth slowdown. Click here to watch the full interview.
What’s in Today’s Report:
Futures are little changed following a mostly quiet weekend of news as markets look ahead to tomorrow’s CPI report.
The only notable economic report overnight was better than expected growth and inflation updates from the European Commission, who now sees EU growth rising 0.9% this year (up from 0.3%) and inflation at 5.6% (down from the previous 6.1%). These revised estimates are helping to bolster the “No Landing” economic scenario.
Markets should mostly be in a holding pattern today as the CPI report looms tomorrow morning, but there are two notable events on the calendar to watch: New York Fed Inflation Expectations (One Year: 5.0%, Five-Year: 2.4%) and one Fed speaker: Bowman (8:00 a.m. ET). If inflation expectations are higher than before or Bowman is hawkish, that could mildly pressure stocks.
What’s in Today’s Report:
Futures are modestly weaker following a rally in oil prices and a continued rise in bond yields overnight.
Oil rallied 2% after Russia announced it was voluntarily reducing output by 500k bpd while OPEC+ did not signal any intention to increase output to offset the reduction.
Global bond yields moved higher after Nikkei reported Kazuo Ueda will become the next BOJ governor, and not the ultra-dove Masayoshi Amamiya (who was expected).
Today focus will remain on the data and specifically University of Michigan Consumer Sentiment (E: 65.0) and the inflation expectations in the report (any further decline will be positive for stocks). We also get two Fed speakers: Waller (12:30 p.m. ET) and Harker (4:00 p.m. ET) and markets will want to see if they echo the hawkish tone from regional Fed presidents this week.