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Market Multiple Table: December Update

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What’s in Today’s Report:

  • Market Multiple Update: December Update
  • A Surge in Unit Labor Costs Rekindle Inflation Worries

Equity futures are little changed this morning as investors digest the sizeable rally so far this week with concerns about the Chinese property market offsetting more progress by Congress towards raising the debt ceiling.

Kaisa Group, a large Chinese developer, had its shares halted overnight pending a corporate announcement after a debt deadline passed which has rekindled fears about China’s property market.

Today, there is just one economic report to watch: JOLTS (E 10.4M), but it is a lagging report from October so unlikely to move markets and there are no Fed officials scheduled to speak.

In the afternoon, there is a 10-Year Treasury Note auction (1:00 p.m. ET) that could move bonds and subsequently stocks, however, given the quiet calendar today, it would not be surprising to see the markets digest some of this week’s outsized gains now that the S&P 500 is back within reach of all-time highs.

Market Multiple Table: October Update

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What’s in Today’s Report:

  • Market Multiple Table: October Update
  • ISM Services Index – Takeaways

Stock futures are down more than 1% and bond yields continue to climb higher amid renewed stagflation fears while traders look ahead to this week’s U.S. jobs data.

Economically, data was disappointing overnight as German Manufacturers Orders fell by -7.7% vs. (E) -2.1% in August and EU Retail Sales for the same month rose just 0.3% vs. (E) 0.8%.

Meanwhile, U.K. 10-year Gilt breakevens jumped 10 basis points to the highest since 2008 (above 4%) as surging energy costs add to inflation concerns.

Looking into today’s session, focus will be on the September ADP Employment Report (E: 428K) ahead of the bell while there is one Fed official speaking this morning: Bostic (9:00 & 11:30 a.m. ET). The bond market is continuing to have a significant impact on stocks right now so if there is a spike higher in yields in the wake of the private payrolls print, expect stocks to remain under pressure today.

Market Multiple Chart

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What’s in Today’s Report:

  • Market Multiple Chart
  • EIA Analysis and Oil Update
  • What Yesterday’s Jobs Numbers Mean for Today’s Report (and the Market Reaction)

Futures are little changed ahead of this morning’s jobs report and following a mostly quiet night of news.

Economic data was mixed overnight as the UK Construction PMI beat estimates while Euro Zone Retail Sales missed, but neither number is moving markets.

Infrastructure “chatter” about a potential $1 trillion compromise is getting louder, but markets remain skeptical about an infrastructure deal anytime soon.

Focus today will be on the Jobs Report and expectations are as follows: Job Adds 645K, UE Rate 5.9%, Wages 0.2% m/m).  Thursday’s strong employment data (ADP and claims) makes the market more sensitive to a “Too Hot” report (and potentially less dovish Fed) than it was on Wednesday, but the bottom line is that a number near either extreme (900k or 300k) will likely cause at least a temporary market headwind.

Also, Fed Chair Powell is speaking at a Bank of International Settlements Climate panel right now, but that shouldn’t move markets.