Inflation not being temporary is easily the biggest long-term risk to this market, because it will cause the Fed to get more…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower following a generally quiet night of news, although on the margin markets are seeing global central banks get less dovish.
On Wednesday, the Reserve Bank of New Zealand had hawkish commentary, while overnight the Bank of Korea hinted at a rate hike before year-end. Neither the Reserve Bank of New Zealand nor the Bank of Korea will move markets, but the bottom line is we are seeing a global rising tide of “less dovish” central bank policy, and that’s likely to cause volatility as we move forward throughout the year.
There was no market moving economic data overnight.
Today we get several notable economic reports including (in order of importance): Jobless Claims (E: 450K), Durable Goods (E: 0.7%), Revised Q2 GDP (6.5%), and Pending Home Sales (E: 2.0%). Bottom line, markets will want to see solid, but not “Too Hot” economic data, and if we get that result the data should help stocks rally today.
U.S. stock futures are extending yesterday’s gains this morning as easing inflation concerns…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are extending yesterday’s gains this morning as easing inflation concerns and more accommodative Fed chatter are fueling a rebound in tech shares.
The German Ifo Survey topped estimates overnight offering further evidence that the economic recovery is accelerating in the EU.
This morning, there are several housing market reports to watch: Case-Shiller Home Price Index (E: 1.3%), FHFA House Price Index (E: 0.9%), and New Home Sales (E: 957K), before May Consumer Confidence data (E: 119.0) is released shortly after the bell.
Additionally, there is a 2-Yr Treasury Note Auction at 1:00 p.m. ET that could impact Fed policy expectations (a weak auction could rekindle taper fears) and one Fed official is scheduled to speak: Quarles (10:00 a.m. ET).
Until then, expect a more volatile market, but at this point, strong policy support for stocks remains very much in place, and that’s a good thing…according to Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.
Inflation fears will remain a headwind for stocks until it becomes clear that price pressures are temporary. “Until then, expect a more volatile market, but at this point, strong policy support for…” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here for the full article.
What’s in Today’s Report:
Futures are moderately higher as markets ignore more Bitcoin volatility following a generally quiet weekend.
Bitcoin volatility remained elevated, with the cryptocurrency falling more than 10% over the weekend, and then bouncing back more than 5% this morning, but markets are ignoring the volatility so far today.
There were no notable economic reports over the weekend, nor any notable central bank speak.
Today there are multiple Fed speakers but we’ll be watching Brainard (9:00 a.m. ET) and Mester (11:00 a.m. ET) specifically to see if there’s any reference to thinking about tapering (if there is look for a small hawkish response from markets). Bostic (12:00 p.m. ET) and George (5:30 p.m. ET) also speak today but shouldn’t move markets.
What’s in Today’s Report:
Futures are moderately higher on momentum from Thursday’s rebound combined with a drop in industrial metals’ prices, which is helping to ease some anxiety on inflation.
Iron ore prices dropped sharply overnight as Chinese officials stated they would take measures to curb price increases in various industrial metals and that headline is pushing back on the “surging inflation” narrative (although it doesn’t change the inflation outlook).
There was no notable economic data overnight nor any important central bank speak (outside of the China metals news it was a quiet night).
Today we get several notable economic reports including Retail Sales (E: 1.0%), Industrial Production (E: 1.2%), and Consumer Sentiment (E: 90.3). In general, the stronger the better for these reports but we’ll be watching the inflation expectations component of the Consumer Sentiment Index – if it runs “hot” expect a headwind on stocks. There’s also one Fed speaker, Kaplan (1:00 p.m. ET), but he shouldn’t move markets.
What’s in Today’s Report:
Futures are modestly lower mostly on momentum from Wednesday’s drop following a generally quiet night.
There was no new inflation news overnight, but investors are cautious ahead of the PPI report this morning, which should be similarly strong to yesterday’s CPI report.
Bitcoin and the entire crypto-currency space is getting hit hard after Tesla (TSLA) announced it would no longer accept Bitcoin as a form of payment and that’s weighing on some of the momentum parts of the market.
Looking forward to today, the key number will be PPI. Expectations for PPI are 0.3% m/m and 5.9% y/y but if the numbers come in much stronger expect that to send yields higher and to hit stocks, at least temporarily.
The other notable number this morning is Jobless Claims (E: 475K) although that will start to fade a bit in importance as the market views the issues in the labor market as supply based (people not choosing to work) rather than demand based (people not being able to work).
There are also three Fed speakers today Barkin (10:00 a.m. ET), Waller (1:00 p.m. ET), Bullard (4:00 p.m. ET), and any commentary on inflation will be closely watched.