The selling is technical and emotions (fear/greed) that are driving the markets on an intraday basis and we should all prepare for more elevated volatility ahead…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
There is a tentative sense of relief in markets this morning with stock futures tracking global equities higher while bond yields and the dollar pullback ahead of key inflation data in the U.S. today.
Economically, Chinese CPI and PPI were both hotter-than-expected however German CPI met estimates of 7.4% y/y which is giving investors hope that price pressures are still high but in the process of peaking.
Looking into today’s session investors will be primarily focused on the CPI report (E: 0.2% m/m, 8.1% y/y), and more specifically the Core CPI figures (E: 0.4% m/m, 6.0% y/y).
We will also hear from one Fed speaker: Bostic (12:00 p.m. ET), and there is a 10-Yr Treasury Note auction at 1:00 p.m. ET.
Bottom line, if today’s inflation data comes in below expectations, it will likely bolster this morning’s already solid gains in stock futures and lead to a further relief rally. Conversely, if inflation runs hot, expect more volatility across asset classes and the potential for new lows in the major equity indices.
To start the year, we knew that central bank tightening would make for a challenging market, but that has been compounded by two surprise events: The Russia/Ukraine war (no one expected that in January) and Chinese lock-downs (it’s quasi-shocking the Chinese are still adopting these policies and crushing their economy)…wrote Tom Essaye of The Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Stock futures are trading with tentative gains this morning as yesterday’s steep declines are digested after a mostly quiet night of news.
Economically, data overseas was slightly better than feared (specifically Economic Sentiment within the German ZEW Survey) while the NFIB Small Business Optimism Index in the U.S. held steady at 93.2, topping estimates of 92.9.
There are no notable economic reports today but there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and if the results help the bond market stabilize, that could help equities bounce today.
Finally, there are a slew of Fed speakers today including: Williams (7:40 a.m. ET), Bostic (8:30 a.m. ET), Barkin (9:15 a.m. ET), Kashkari (1:00 p.m. ET), and Mester (3:00 p.m. ET). If they collectively strike a “less-hawkish” tone, that could also help fuel a relief rally in stocks today.
China’s PMI this morning was horrific, that underscores that the Chinese economy is a huge drag on global growth right now. It’s a risk to keep inflation high…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are sharply lower following new COVID lockdowns in China.
COVID cases in Shanghai are rising again, prompting new restrictions on movement and work. Meanwhile, Beijing continues to suffer from limited lockdowns and this is compounding worries about global economic growth.
Geo-politically, Victory Day in Russia offered no notable news and there remains no end in sight to the Ukraine war.
Today there are no economic reports and just one Fed speaker, Bostic at 8:45 a.m. ET. So, we should expect technicals to dominate trading and if last week’s intra-day lows are broken in the S&P 500 and we don’t get any positive news on 1) Fed hawkishness, 2) Chinese lockdowns or 3) Russia/Ukraine, we should not be shocked if the S&P 500 move closer to a test of support at 4,000.
What’s in Today’s Report:
Futures are moderately lower as markets digest Wednesday’s big post-Fed rally following a night of underwhelming economic data.
The April Chinese services PMI plunged to 36.2 vs. (E) 41.1, reflecting the economic damage from lockdowns. In Europe, data was mixed as German Manufacturers’ Orders missed estimates while UK Services PMI beat expectations.
There are multiple Fed speakers today on financial media outlets (there are no official speeches scheduled) and don’t be surprised if they sound hawkish and push back on the post FOMC rally yesterday (this is especially true for Bullard, whose doing interviews today).
Today’s focus will be on the aforementioned Fed speakers, and again don’t be shocked if they sound “hawkish” and that causes some giveback from yesterday’s rally (but a hawkish tone won’t undo the positives from Powell’s press conference, either).
Economically, there is a BOE Rate decision and they are expected to hike 25 bps. Domestically, the key report today is Unit Labor Costs (E: 6.8%) as that will give us a good look at total wage inflation (and if it’s higher than estimates that will be a negative). We also get Jobless Claims (E: 178K) but that shouldn’t move markets.
What’s in Today’s Report:
Stock futures are trading cautiously higher this morning ahead of the Fed while oil prices are spiking after the EU announced plans for a full Russian oil embargo that will be phased in over the next 6 months.
Economic data was mostly in-line with estimates overnight with Composite PMI reports notably holding up better than the recently released manufacturing PMIs which is a modest tailwind for risk assets this morning.
Looking into today’s session, focus will be on economic data early with the ADP Employment Report (E: 398K) due out ahead of the open while the ISM Services Index (E: 58.9) will be released shortly after the bell. The market will want to see firm data that helps contradict the idea that the Fed is beginning to accelerate the pace of rate hikes into an economic slowdown.
From there, price action should begin to slow as the Fed comes into focus with the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) in the afternoon. A more hawkish than expected Fed could send stocks back down to test Monday’s lows while a not-as-hawkish-as-feared announcement/press conference would open the door to a relief rally back towards 4,300.
On the earnings front, there are a few notables today including: MRNA ($5.18), CVS ($2.14), MAR ($0.94), YUM ($1.07), UBER (-$0.28), and EBAY ($1.03).
What’s in Today’s Report:
Stock futures are little changed as yesterday’s late-session rally is being digested following more hot inflation data and a slightly hawkish RBA hike (25 bp vs. E: 15 bp) overnight.
Economic data on growth was better than feared overnight but Eurozone PPI was hotter than expected with a staggering annual rise of 36.8% vs. (E) 36.2% in March.
Looking into today’s session, there are a few economic reports to watch including March JOLTS (E: 11.27M) and Factory Orders (E: 1.1%), however, with the May FOMC Meeting beginning this morning, a sense of Fed paralysis is likely to begin to grip markets ahead of tomorrow’s announcement.
Finally, earnings season does continue with a few notables reporting today: PFE ($1.66), BP ($1.41), HLT ($0.59), AMD ($0.90), and SBUX ($0.60) which could have an impact on sector trading but is not likely to move the broader markets given the focus-shift to the Fed.
What’s in Today’s Report:
Futures are enjoying a modest oversold bounce following Friday’s selloff, but there was no improvement over the weekend on the three headwinds pressuring stocks: Chinese growth worries, Ukraine war and hawkish Fed.
Economic data was mixed as the April Chinese manufacturing PMI dropped further (to 47.4 from 49.5) while the EU PMI slightly beat estimates (55.5 vs. (E) 55.3) and German Retail Sales underwhelmed (-0.1% vs. (E) 0.3%).
Today focus will be on the ISM Manufacturing PMI (E: 58.0) and markets need to see a solid number to push back on stagflation concerns. If we get a weak number, expect the selling to resume and stagflation fears to grow.
Earnings season will begin to wind down this week but there are still some important results coming and some we’re watching today include: NXPI ($3,17), CAR ($3.54) and MGM ($-0.09).