What’s in Today’s Report:
Futures are little changed following a mostly quiet night of news as markets digest this week’s underwhelming economic data ahead of the jobs report and long weekend.
Economic data overnight was better than expected as the Chinese Composite PMI beat estimates (57.8 vs. (E) 55.0) as did German Industrial Production (2.0% vs. (E) 0.0%).
Regional banks remained stable overnight following WAL’s update on deposit statistics yesterday.
Today focus will be on Jobless Claims (E: 201K) and a speech by Fed president Bullard (10:00 a.m. ET). Investors will want to see claims move higher, above 200k, to signal some moderation in the labor market, while we can expect Bullard to be hawkish, although keep in mind he does not represent the consensus at the FOMC (and as such his comments shouldn’t move markets, unless they’re a dovish surprise).
What’s in Today’s Report:
Futures are little changed as oil prices are higher following a surprise OPEC+ production cut, while investors digest the recent rally.
OPEC+ announced a surprise production cut of 1.16 million bpd and oil rallied as much as 8% on the news, although it has backed off those highs (up about 5% currently).
Economically, the EU and UK manufacturing PMIs were generally in line with expectations and aren’t moving markets (47.3 for the EU and 47.9 for the UK).
Today focus will be on the ISM Manufacturing PMI (E: 47.5) and oil prices, and a continued steep rise in either (so a hotter than expected PMI or oil moving sharply higher from current levels) will be a headwind on stocks.
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What’s in Today’s Report:
Futures are slightly lower following a mostly quiet night of news as markets look ahead to tomorrow’s jobs report.
Chinese inflation data undershot expectations with CPI rising 1.0% vs. (E) 1.9% while PPI fell –1.4% vs. (E) -1.3% and Chinese authorities should continue to add stimulus to their economy (which will be good for global growth).
Politically, focus today will be on President Biden’s budget and the proposed tax increases, but there’s no chance the budget passes and the details of it won’t move markets.
Focus today will stay on the data and the key report will be Jobless Claims (E: 196K). Claims have remained stubbornly low and any movement above 200k will be welcomed by markets as it’ll hint there’s some deterioration in the labor market.
What’s in Today’s Report:
Futures are little changed following a quiet weekend and as investors look ahead to an important week of catalysts (Powell speeches and employment reports).
China released updated growth expectations for 2023 of “around 5%” and that’s slightly under estimates and was a mild disappointment.
Economic data was solid overnight as Euro Zone Retail Sales (1.0% vs. (E) 0.3%) and UK Construction PMI (54.6 vs. (E) 49.1) both beat estimates.
Today expect digestion of last week’s rally as there are no material economic reports or Fed speak, as markets look ahead to Powell’s testimony tomorrow.
Overall, “an improving outlook for the health of the U.S. economy in the wake of the January jobs report, and ongoing optimism about the positive demand impact of China’s rapid reopening process are offering support to global oil markets right now,” said the Sevens Report’s Richey. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower following a disappointing night of tech earnings and more hot inflation data.
AAPL, AMZN, and GOOGL all reported earnings overnight and the results underwhelmed. Each stock is down between 2% and 5% pre-market.
Economically, EU PPI rose 1.1% vs. (E) -0.7% and became the third inflation number this week to hint at a rebound.
Focus today will be on the Employment Situation Report and expectations are as follows: Job Adds 185K, UE Rate 3.6%, Wages 0.3% m/m, 4.5% y/y). Financial media focus will be on the headline job adds number but thanks to Powell’s less hawkish speech it’ll take a big number (300k or more) to be “Too Hot.” Instead, focus on wages as they are directly related to services inflation, which remains sticky. If wages are strong, that’ll be a negative. The other notable economic report today is the ISM Services Index (E: 49.6) and markets will want to see stability in the data (no not worse than expectations).
What’s in Today’s Report:
Futures are little changed ahead of the jobs report and following mixed European economic data.
EU HICP (their CPI) was disappointing on balance as the headline rose less than expected (9.2% vs. (E) 9.5%) but the more important Core HICP gained 5.2% vs. (E) 5.0%. This report partially refutes the encouraging inflation data from earlier this week.
Today focus will be on the Jobs Report and expectations are as follows: Job Adds 200K, UE Rate 3.7%, Wages 0.4% m/m, 5.0% y/y. If we get another solid number above 200k, expect more weakness in stocks and bonds as that will be viewed as “hawkish” data, while a job adds number close to 100k could spark a sharp rally, given yesterday’s declines.
The jobs report isn’t the only important economic report today, however, as the ISM Services Index (E: 55.0) is released later this morning. Markets will want to see a moderation in both the headline and prices readings.
Finally, there are three Fed speakers today: Cook (11:15 a.m. ET), Bostic (11:15 a.m. and 3:30 p.m. ET), and Barkin (12:15 p.m. ET).
What’s in Today’s Report:
Futures are slightly higher following more signs of disinflation in the EU.
Euro Zone PPI fell more than expected (-0.9% vs. (E ) -0.5%) and that’s the third EU inflation statistic this week to imply inflation has peaked and is receding.
Politically, Rep. McCarthy failed to become Speaker again yesterday although he is expected to win eventually.
Focus today will be on economic data and the key reports are all employment related: Challenger job cuts (Previous 76,835), ADP Employment Report (E: 145K) and Jobless Claims (E: 228K). Again, markets want to see a moderation in this employment data so underwhelming reports will be embraced by the market. Finally, we also have two Fed speakers, Bostic (9:20 a.m. ET) and Bullard (1:20 p.m. ET), but data will move markets more than Fed speak at this point.
What’s in Today’s Report:
U.S. equity futures have a tentative bid to start the new year today as tech stocks are outperforming amid a sharp pullback in Treasury yields.
Economically, China’s Manufacturing PMI fell to 49.0 in December from 49.4 in November while the U.K.’s Manufacturing PMI came in at 45.3 vs. (E) 44.7 last month. Both figures remained well below 50, in contraction territory, and that is seeing some of the recent hawkish central bank expectations unwind as we begin the new year.
Looking into today’s session, there are two economic reports to watch in the U.S., the Manufacturing PMI (E: 46.2) and Construction Spending (E: -0.4%).
Investors will be looking for data that points to a continued slowdown in growth but a more pronounced drop in price readings as that should help further ease hawkish policy expectations and allow the early but tentative risk-on money flows to continue.
There are no Fed officials scheduled to speak and no notable Treasury auctions today. That will leave investors focused on Treasuries as a continued drop in yields today should support a continued bid in tech stocks and equities more broadly as traders reposition into the new year.
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