The market still views the Fed as the ‘most dovish’ global central bank, and as long as that’s the case, the dollar will have…said Tom Essaye, the founder and president of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are wavering between gains and losses this morning as traders digest mixed economic data and look ahead to a key inflation report due later in the week.
Economically, Japanese GDP was not as bad as feared in Q1 but German Industrial Production missed estimates as did the U.S. NFIB Small Business Optimism Index which is weighing modestly on sentiment this morning.
There are two economic reports to watch in the U.S. today: International Trade in Goods and Services (E: -$69.0B) and JOLTS (E: 8.045M). The latter will be the more important to watch as investors continue to look for clues regarding the state of the labor market recovery.
No Fed officials are scheduled to speak today however there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and a weak outcome could rekindle taper fears with Thursday’s CPI report coming into focus.
What’s in Today’s Report:
Futures are slightly lower on underwhelming economic data and as markets digest last week’s rally.
Economic data was slightly disappointing as Chinese exports missed expectations (27.9% vs. (E) 32.1%) as did German Manufacturers’ Orders (-0.2% vs. (E) 1.0%).
The G-7 agreed in principle to a global minimum corporate tax and that is weighing slightly on global markets. But, investors view implementation of the tax as taking a very, very long time (if it ever actually happens).
Today there are no notable economic reports and no Fed speakers so focus will be on any apparent infrastructure progress, although at this point any infrastructure deal likely won’t be big enough to provide material stimulus to the economy (and push markets higher).
Put differently, we all know that inflation surged in April. The key is whether it keeps going through the summer. If inflation continues during the summer months that could cause volatility and… Essay wrote. Click here to read the full article.
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.
