A drop in gasoline prices was the largest contributor to the core inflation dip, something that Tom Essaye, president of Sevens Report Research, told Blockworks is “a little bit more disappointing than the headline would imply.” Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower following mixed economic data, as markets continue to digest increased hopes for an economic “soft landing.”
Chinese exports declined but fell less than expected (-9.9% vs. (E) -11.1%), offering more “not as bad as feared” news.
Today’s focus will switch to earnings (and that’s true for next week too) and key reports today include: JPM ($ 3.11), BAC ($ 0.76), C ($ 1.18), UNH ($5.17), WFC ($0.63) and BLK ($ 8.00). If earnings are better than feared, that should help stocks extend yesterday’s gains.
Economically the focus will stay on inflation with Import & Export Prices (E: -0.9%, -0.7%) and Consumer Sentiment (E: 60.0) while we get another Fed speaker: Harker (10:20 a.m. ET). As has been the case, anything that implies declining inflation and/or a 25 bps rate hike in February will help stocks rally.
What’s in Today’s Report:
Futures are little changed as overnight economic data was in-line with expectations while investors look ahead to this morning’s CPI Report.
Economically, Chinese CPI was the only notable number and it largely met expectations at 1.8% y/y (vs. (E) 1.9%). That reading will keep Chinese authorities actively stimulating the Chinese economy, which is a positive for the global economy.
Today focus will clearly be on the CPI report (E: 0.0, 6.6%), but remember the Core CPI report is the more important number (E: 0.3%, 5.7%). Markets need to see continued declines in CPI to underwrite recent gains in stocks and bonds.
Away from CPI, we get the latest Jobless Claims reading (E: 215K) and this number needs to move higher to reflect a better balance in the labor market. Finally, there are multiple Fed speakers today including Harker (7:30 a.m. ET), Bullard (11:30 a.m. ET), and Barkin (12:40 p.m. ET) and while we should expect typically hawkish rhetoric, they shouldn’t reveal anything new (and as such shouldn’t move markets).
What’s in Today’s Report:
U.S. stock futures are tracking global shares higher in moderate risk-on trading this morning as investors look past Powell’s lack of commentary of monetary policy plans yesterday and await tomorrow’s all-important CPI data.
Economically, Retail Sales reports in both Australia and Italy handily beat expectations overnight, adding to optimism for a global economic soft landing.
There are no market-moving economic reports today and no Fed officials are scheduled to speak.
That leaves just one potential market catalyst today, a 10-Yr Treasury Note auction at 1:00 p.m. ET. And while it is possible a surprise outcome in the auction moves yields and causes some modest moves in equities in the afternoon, the session is likely to be mostly quiet as traders position into the CPI report.
“A sustained break above the 200-day moving average would imply that investors are becoming fundamentally more optimistic about the market. That would require real progress toward the Fed actually stopping its rate-hike campaign. Or progress toward the economy actually achieving a soft landing. Or progress toward inflation falling somewhere that is reasonably more acceptable to the Fed,” said Tom Essaye, founder of the Sevens Report. Click here to read the full article.
What’s in Today’s Report:
S&P 500 futures are trading with modest losses this morning as investors digest positive economic news out of Europe ahead of Powell’s speech today.
In Europe, French Industrial Production rose 2.0% vs. (E) 0.8% in November while GS dropped their Euro-area recession call for 2023 bolstering market hopes for a soft landing.
Domestically, the NFIB Small Business Optimism Index fell to 89.8 vs. (E) 91.3 which is weighing modestly on sentiment in pre-market trading.
There are no additional economic reports in the U.S. today which will leave investors focused on any insight Fed Chair Powell offers on either the economy or monetary policy plans when he speaks in Sweden at a Riksbank symposium beginning at 9:00 a.m. ET.
Hawkish Fed speak out of Daly and Bostic is what caused stocks to reverse early gains and close lower yesterday, so if Powell strikes a hawkish tone and pushes back against the market’s latest optimism for a lower terminal rate (below 5%), that could see stocks extend yesterday’s afternoon selloff and the market give back some or all of Friday’s post-jobs report gains.
Finally, The Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET that could signal the bond markets response to Powell (if he even says anything notable). A weak outcome to the auction and rising yields could amplify any hawkish money flows and result in more broad market volatility.
Sevens Report Research Tom Essaye Founder and President joins Yahoo Finance Live to discuss the Fed’s policy pathway moving ahead, inflation, the state of the economy, jobs data, a recession, what investors should be watching for, and the outlook for markets. Click here to watch the full interview.
What’s in Today’s Report:
Futures are modestly higher mostly on momentum from Friday’s close, following a quiet weekend of news.
Stocks rallied on Friday thanks to increasing hopes for an economic soft landing, and nothing happened over the weekend to offset that hope.
Economic data met expectations as German Industrial Production and EU Unemployment were both in-line.
Today focus will be on the NY Fed Inflation Expectations (Previous: 4.0% one-year, 3.8% three-year), and if they decline from previous levels that will be positive. We also get one Fed speaker, Bostic (12:30 p.m. ET).
What’s in Today’s Report:
Futures are little changed ahead of the jobs report and following mixed European economic data.
EU HICP (their CPI) was disappointing on balance as the headline rose less than expected (9.2% vs. (E) 9.5%) but the more important Core HICP gained 5.2% vs. (E) 5.0%. This report partially refutes the encouraging inflation data from earlier this week.
Today focus will be on the Jobs Report and expectations are as follows: Job Adds 200K, UE Rate 3.7%, Wages 0.4% m/m, 5.0% y/y. If we get another solid number above 200k, expect more weakness in stocks and bonds as that will be viewed as “hawkish” data, while a job adds number close to 100k could spark a sharp rally, given yesterday’s declines.
The jobs report isn’t the only important economic report today, however, as the ISM Services Index (E: 55.0) is released later this morning. Markets will want to see a moderation in both the headline and prices readings.
Finally, there are three Fed speakers today: Cook (11:15 a.m. ET), Bostic (11:15 a.m. and 3:30 p.m. ET), and Barkin (12:15 p.m. ET).
What’s in Today’s Report:
U.S. equity futures have a tentative bid to start the new year today as tech stocks are outperforming amid a sharp pullback in Treasury yields.
Economically, China’s Manufacturing PMI fell to 49.0 in December from 49.4 in November while the U.K.’s Manufacturing PMI came in at 45.3 vs. (E) 44.7 last month. Both figures remained well below 50, in contraction territory, and that is seeing some of the recent hawkish central bank expectations unwind as we begin the new year.
Looking into today’s session, there are two economic reports to watch in the U.S., the Manufacturing PMI (E: 46.2) and Construction Spending (E: -0.4%).
Investors will be looking for data that points to a continued slowdown in growth but a more pronounced drop in price readings as that should help further ease hawkish policy expectations and allow the early but tentative risk-on money flows to continue.
There are no Fed officials scheduled to speak and no notable Treasury auctions today. That will leave investors focused on Treasuries as a continued drop in yields today should support a continued bid in tech stocks and equities more broadly as traders reposition into the new year.
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