This is exactly what the Fed wants, The question is how quickly do we lose momentum and a slowing of growth becomes an outright contraction…said Tom Essaye, president of Sevens Report Research, of the slower momentum in manufacturing. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher as markets bounce back from Wednesday’s declines following mixed news from China.
Positively, Chinese authorities may allow ANT Group to IPO, which is another sign China is easing pressure on tech companies. Additionally, Chinese exports handily beat estimates (16.9% vs. (E) 8.0%).
Negatively, Shanghai and Beijing reimposed some COVID restrictions, showing “Zero COVID” remains in effect.
Today focus will be on the ECB Rate Decision, and while no rate hike is expected, President Lagarde is expected to hint that a rate hike is coming in July and another rate hike is coming later this year (if it’s more hawkish than that, that will be a headwind on global stocks). We also get Jobless Claims (E: 210K) but that shouldn’t move markets.
What’s in Today’s Report:
U.S. futures are tracking European shares lower this morning amid hawkish money flows ahead of tomorrow’s ECB meeting announcement.
Economically, Eurozone Q1 GDP was revised up to 0.6% vs. (E) 0.3%, bolstering bets that the ECB could raise rates by 50 bp in July which is driving bond yields higher and pressuring equities this morning.
There are no notable economic reports and no Fed officials are scheduled to speak today but there is a 10-Yr Treasury Note auction at 1:00 p.m. ET.
Bottom line, investors remain focused on high inflation and uncertain economic growth right now and if we see rates begin to meaningfully move higher again today, especially in the wake of the 10-year auction, then the S&P 500 test and potentially break down through key near term support at 4,080 today.
We need to see more proof those Keys to the Bottom are becoming more likely for stocks to move materially higher from here…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
Since those lows near 3,800 in the S&P 500 there has been real progress: China is reopening and hopefully the economy will be close to operating at near-full capacity within a month. That will add a large tail-wind to the global economy, and perhaps most importantly, ease supply chain stress…Tom Essaye of the Sevens Report said in a note. Click here to read the full article.
What’s in Today’s Report:
Stock futures are modestly lower this morning as bond yields continued to rise overnight thanks to a more hawkish than expected central bank decision.
The RBA raised rates by 50 bps vs. (E) 40 bps overnight citing elevated inflation pressures which have rekindled fears about more aggressive monetary policy globally.
Meanwhile, economic data was soft as German Manufacturers Orders fell -2.7% vs. (E) 0.5% which underscores the recent loss of momentum in economic growth.
Looking into today’s session, there is just one economic report: International Trade in Goods (E: -$90.2B) which is not likely to materially move markets while no Fed officials are scheduled to speak.
That will leave investors focused on the latest move higher in yields as that was the main reason for the steady fade in stocks yesterday. To that point, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET that could move the bond market, and for stocks to move higher today, we will need to see yields level out.
Tom Essaye of the Sevens Report noted that “very strong data would incur more Fed hawkishness while really soft data would spike stagflation concerns — and ‘moderating’ was just what we got from the ADP jobs report.” Click here to read the full article.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report told CNBC. Click here to read the full article.
Numbers this strong would likely reverse any hopes the Fed would consider a pause in rate hikes after the June/July increases, because it would signal the labor market remains very tight…Tom Essaye of the Sevens Report said. Click here to read the full article.
What’s in Today’s Report:
Futures are solidly higher thanks to positive news from China.
The economic reopening in China progressed over the weekend as COVID cases continued to decline, authorities relaxed more restrictions in Beijing, and none of the fifty largest cities in China have intense restrictions in place.
Also in China, the WSJ reported authorities may soon end their probe into Didi, and that might also signal an end to the government crackdown on Chinese tech stocks (if so that’d be a major positive for Chinese tech names and a peripheral positive for tech stocks more broadly).
Today there are no notable economic reports or Fed speakers, so it should be a generally quiet day of news. Across the pond, UK Prime Minister Johnson faces a “no confidence” vote in Parliament, but he’s expected to survive it (if he doesn’t, that could be a surprise negative for stocks today but again that is unlikely).