Inflation has to stop going up. I know that sounds overly simplistic, but the bottom line is that for the past several months, markets and the Fed have seen ‘hints’ of a peak in inflation pressures, yet that wasn’t reality…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower while most global markets rallied overnight as traders continue to monitor the situation in Ukraine and look ahead to the Fed minutes release.
Geopolitically, there were no major developments regarding Ukraine o/n but U.S. officials continue to warn that an invasion is possible at anytime, leaving markets on edge.
Economically, Chinese inflation data came in below estimates while U.K. PPI ran hot but neither release materially moved markets overnight.
Today is lining up to be a fairly busy day from a catalyst standpoint as there are several notable economic reports due out including: Retail Sales (E: 2.0%), Import & Export Prices (E: 1.3%, 0.7%), Industrial Production (E: 0.4%), and Housing Market Index (E: 83).
From there, focus will shift to a 20-Yr Treasury Bond auction at 1:00 p.m. ET and then likely the most important catalyst of the day, the FOMC Minutes will be released at 2:00 p.m. ET.
The market has been very indecisive in recent sessions and that is likely to continue today, however, if the geopolitical backdrop remains largely calm, economic data is favorable, and the FOMC minutes are not interpreted as overly hawkish, we may finally see the market break back to test the February highs.
What’s in Today’s Report:
Futures are moderately weaker mostly on momentum from Thursday’s selloff and despite some reassuring commentary from Fed officials overnight.
Fed Presidents Daly and Barkin both pushed back on the idea of a 50 basis point rate hike in March, countering the hawkish commentary from Fed President Bullard.
Economic data was mixed as German CPI met estimates (4.9% y/y) while UK GDP and Industrial Production both slightly missed estimates.
Today there are no notable economic reports and no Fed speakers scheduled, so focus will be on Consumer Sentiment (E: 67.5) and specifically the inflation expectations indices. If one year and five year inflation expectations can decline, that will help ease some inflation concerns and could spark a rebound later this morning.
Inflation has to stop going up. I know that sounds overly simplistic, but the bottom line is that for the past several months, markets and the Fed have seen ‘hints’ of a peak in inflation pressures, yet that wasn’t…said 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 Wednesday’s rally and ahead of this morning’s CPI report.
Governments and central banks pushed back a bit overnight on the global hawkish narrative as the European Commission predicted inflation would return to 1.7% yoy in 2023 while the Swedish National Bank was dovish in its commentary (no rate hikes or QT anytime soon).
Economic data was sparse overnight although Chinese money supply did beat estimates, reflecting the continued accommodation in that economy.
Today the key event is the CPI Report (E: 0.5% m/m and 7.3% y/y) and an in-line or smaller than expected increase will likely spur a further rally in stocks as markets try and price in a “not as hawkish as feared” Fed (although we’d be skeptical of that rally – more on that in the Report). We also get Jobless Claims (E: 230K) and one Fed speaker this evening: Barkin at 7:00 p.m. ET.
What’s in Today’s Report:
Stock futures are solidly higher this morning after another mostly quiet night of news as tech shares rise amid falling bond yields ahead of tomorrow’s CPI report.
There were no market-moving economic reports overnight and no data is due to be released in the U.S. today.
With no economic data on the calendar, the focus will be on Fed speakers: Bowman (10:30 a.m. ET) and Mester (12:00 p.m. ET) as well as a 10-Yr Treasury Note auction at 1:00 p.m. ET.
There are also a few notable companies due to release earnings today including: TEVA ($0.70), UBER (-$0.33), and DIS ($0.57).
Bottom line, the market remains keenly focused on inflation right now and with bond yields pulling back from recent highs, stocks are enjoying a renewed relief rally that could extend higher today as long as yields don’t reverse back towards recent highs.
What’s in Today’s Report:
Futures are slightly lower following a quiet weekend as investors digested the strong jobs report and last weeks’ hawkish surprises from the ECB and BOE.
ECB officials downplayed the idea of a summer rate hike over the weekend but didn’t rule out a hike in 2022 (largely confirming the hawkish commentary from Lagarde).
Economic data remained mixed as China’s Caixin services PMI beat estimates (51.4 vs. (E) 50.5) but German Industrial Production missed expectations (-0.3% vs. (E) 0.4%) although the data isn’t moving markets.
Today should be a generally quiet day, as from a market influence standpoint all the really important companies have released earnings, so earnings season is “over” for all intents and purposes. Additionally, there’s only one notable economic report, Consumer Credit ($21.0 bln), but given the strength of personal balance sheets that shouldn’t move markets today. On the geo-political front, French President Macron travels to Moscow to meet with Putin about Ukraine, and any positive headlines could produce a mild tailwind on stocks.
What’s in Today’s Report:
Stock futures swung between gains and losses overnight as the sizeable two-day rally to end January is being digested while most global equity markets rallied to start the month of February.
Economically, the EU unemployment rate fell to 7.0% vs. (E) 7.2% but final Manufacturing PMIs were disappointing. None of the data is materially impacting markets this morning, however.
Looking into the U.S. session, there are a few economic reports to watch today: ISM Manufacturing Index (E: 57.5), Construction Spending (E: 0.7%), and JOLTS (10.5 million) while no Fed officials are scheduled to speak.
We are getting into the heart of earnings season and there are some notable companies releasing Q4 results today including: UPS ($3.11), and XOM ($1.96) before the open and then PYPL ($1.13), AMD ($0.76), GOOGL ($26.69), GM ($1.15) and SBUX ($0.80) after the close.
Bottom line, near-term momentum continues to favor the bulls right now and this relief rally can continue if economic data is inline or slightly better than estimates (not too hot), earnings remain positive, and Fed policy expectations continue to get less hawkish.
What’s in Today’s Report:
Futures are little changed and recouped modest losses earlier this morning, as global markets digest yesterday’s Fed decision and mixed earnings.
Economic data was sparse as German Gfk Consumer Climate and UK Distributive Trades both slightly beat estimates.
Today will be a busy day of data and earnings and generally speaking markets need solid data and good earnings/guidance to help this market continue to stabilize. Some reports we’re watching include: Jobless Claims (E: 265K), Durable Goods (E: -0.5%), Initial Q4 ‘21 GDP (5.7%) and Pending Home Sales (E :0.6%).
On the earnings front, the key report today is AAPL ($1.89) after the close, but other reports we’re watching include: MA ($2.19), MCD ($2.31), JBLU (-$0.40), LUV ($0.05), VLO ($1.69), SHW ($1.35), V ($1.69).
I wouldn’t go into treasuries. I think that inflation is here to stay. We don’t know exactly how high it will be, but it’s here to stay, and that’s negative for bonds…said Tom Essaye. Click here to watch the full interview.
