Market Multiple Table: February Update

What’s in Today’s Report:

  • Market Multiple Table: February Update
  • EIA Analysis and Oil Update

Futures are enjoying a moderate bounce overnight thanks to slightly better than expected inflation data and earnings.

German CPI rose less than expected (8.7% vs. (E) 9.1%) and that’s helping to slightly calm fears of a bounce back in inflation.

Earnings overnight were also solid as DIS beat estimates and it’s fair to say this earnings season has been not as bad as feared.

Focus will remain on economic data and the only notable report today is Jobless Claims (E: 190K).  Holiday effects should be working their way out of these numbers so investors will want to see claims begin to rise over the coming weeks, otherwise it’ll imply the labor market remains much, much too tight (and that means more potential future rate hikes).

Earnings season is winding down but some notable reports today include: PM ($1.29), PYPL ($1.20), LYFT ($0.13).

Market Multiple Table: December Update

What’s in Today’s Report:

  • Market Multiple Table December Update: Macro Improvement But It’s More Than Priced In
  • November ISM Services Index Takeaways

Futures are little changed this morning despite a stabilizing bond market and mostly positive global news flow overnight as yesterday’s hawkish money flows are digested.

Economically, German Manufacturer’s Orders rose 0.8% vs. (E) -0.2% in October suggesting that factory demand may be stabilizing.

In China, new Covid cases have declined for 8 consecutive days and the government is reducing testing requirements, bolstering optimism about a move away from the crippling Zero Covid policies.

Today is lining up to be a fairly slow day of news with just one lesser followed economic release: International Trade in Goods and Services (E: -$80.0B) and no Fed speakers as they remain in their pre-meeting blackout period. That said, equity markets will likely queue off of Treasuries and if we see a further rise in shorter-duration yields due to rising terminal rate expectations, yesterday’s declines could very well continue.


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Market Multiple Levels: S&P 500 Chart

What’s in Today’s Report:

  • Market Multiple Levels – S&P 500 Chart
  • What the Midterms Mean for Markets

Stock futures have stabilized after yesterday’s midterm-induced declines and Treasury yields are modestly lower this morning as the focus turns to today’s all-important CPI data.

It was a quiet night of news and there were no market-moving economic reports overseas.

Today, trader focus will be on the October CPI report (E: 0.7%) due out at 8:30 a.m. ET. We will also get Jobless Claims (E: 221K) before the opening.

The Fed speaker circuit picks up as well today with Harker (9:00 a.m. ET), Logan (9:35 a.m. ET), George (1:30 p.m. ET), and Williams (6:35 p.m. ET) all scheduled to speak today.

Bottom line, today’s CPI report is likely to make or break the latest attempt at a broad-based relief rally. If the data is hot and Treasuries decline (yields rise) in a hawkish manner, expect further pressure on equities. Conversely, if CPI is “cooler” than expected and Fed speak is on the dovish side, the S&P 500 could retest recent highs near 3,900.

Market Multiple Levels: S&P 500 Chart

What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart
  • Takeaways From a Dismal Empire State Manufacturing Report

Futures are modestly lower this morning as investors digest more downbeat economic data and disappointing earnings out of HD ahead of the Fed Minutes tomorrow.

The German ZEW Survey’s Economic Sentiment reading was -55.2 vs. (E) -52.7, underscoring ongoing concerns about the outlook for growth in the months ahead.

Looking to today’s session, there are two economic reports to watch: Housing Starts and Permits (1.540M, 1.650M) and Industrial Production (E: 0.3%). Data has been disappointing so far this week so any positivity in the releases could help buoy equities in what has been so far a pretty quiet trading week.

There are no Fed officials scheduled to speak today but WMT ($1.60) will report earnings in the pre-market and investors will be looking for the massive retailer to reiterate guidance and meet or beat estimates to provide evidence that the consumer remains resilient in the face of extremely high inflation. Any disappointment in the quarterly results could spur volatility given the most recent leg higher in stocks leaving the market overbought.

Market Multiple Levels: S&P 500 Chart

What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart

U.S. equity futures fell with global stocks overnight amid ongoing stagflation fears but optimism that the House will pass the debt ceiling bill today has helped stocks stabilize.

Economically, the German ZEW Survey slightly missed estimates while the NFIB Small Business Optimism Index was 99.1 vs. (E) 99.5 but neither report is materially moving markets this morning.

Looking into today’s session, there is just one economic report to watch: August JOLTS (E: 11.013M) but it would take a meaningful surprise in the release to impact markets as it is a very dated report.

Meanwhile, there are no Fed officials scheduled to speak but there are two notable Treasury auctions to watch: 3-Yr Note (11:30 a.m. ET) and 10-Yr Note (1:00 p.m. ET).

Outside any potential surprises from Congress regarding the bill to raise the debt limit, if we see rates continue to accelerate higher on inflation worries today, then stocks could remain volatile and potentially test last week’s lows.

Market Multiple Support Levels

What’s in Today’s Report:

  • Bottom Line: Market Multiple Support Levels to Watch
  • Durable Goods and Consumer Confidence Takeaways

Futures are trading higher this morning thanks to strong earnings from AAPL and positioning into today’s Fed Announcement while coronavirus fears continue to ease as the mortality rate is importantly holding steady near 2%.

Today is lining up to be a busy day as there are a slew of potential market catalysts on the calendar.

First, there are two economic releases to watch: International Trade in Goods (E: -$66.9B) and Pending Home Sales (E: 0.4%) before the Fed events kick off with the FOMC Meeting Announcement at 2:00 p.m. ET, followed by the Fed Chair Press Conference at 2:30 p.m. ET.

Meanwhile, we are in the peak of Q4’19 earnings season and there are a number of major U.S. corporations reporting results today including: BA ($1.73), T ($0.87), MCD ($1.96), MA ($1.87), GE ($0.18), GD ($3.46), DOW ($0.74), MSFT ($1.32), FB ($2.51), TSLA ($2.03), and PYPL ($0.84).

Bottom line, the Wuhan coronavirus outbreak, disappointing economic data, a hawkish Fed, and negative earnings surprises are all risks that could cause volatility in stocks into the end of the week, however, the market is currently showing resilience in the face of these potentially negative catalysts which leaves the pain trade higher for now.

Updated Market Multiples

What’s in Today’s Report:

  • Market Multiple Table Updated

Futures are drifting higher this morning, tracking gains in overseas markets as the recent rally in global equities is digested amid a much quieter macro backdrop this week.

Sentiment towards the trade war has been improving since Friday as the Trump administration appears increasingly concerned with the impact of tariffs on the U.S. economy, and that is continuing to act as a mild tailwind on stocks.

There were no material economic reports or other market-moving headlines overnight.

Looking into today’s session, there are no economic reports in the U.S. however there are two more Fed officials scheduled to speak before Powell’s Jackson Hole speech on Friday: Daly (4:30 p.m. ET) and Quarles (6:00 p.m. ET).

If Daly and Quarles have a similar tone to Rosengren from yesterday, which was “less dovish” that could weigh on stocks in the after-hours session (both speakers are after the bell) as expectations for Powell to deliver a more well-defined, dovish policy outlook on Friday will be dialed back.

The Trade War and Market Multiples

What’s in Today’s Report:

  • Tariff Update – What Does It Mean for Multiples
  • The “Doctor” Doesn’t Lie

The trade war continues to dominate the markets as the designation of China as a currency manipulator by the U.S. Treasury caused a sharp selloff in stock futures last night. But the PBOC intervened to “fix” the yuan back below $7/CNY which helped global markets stabilize overnight.

German Manufacturers’ Orders jumped 2.5% vs. (E) 0.6% in June but the details showed a continuation of soft demand in the Eurozone, offsetting the headline strength.

The trade war, and any further developments on the topic, will remain the market’s main focus today however there are a few other potential catalysts to watch.

Economically, the June JOLTS Report (E: 7.293M) will be released mid-morning and then shortly after lunch, there is a 3-Yr Treasury Note Auction (1:00 p.m. ET) which will be important because Treasury auctions have been moving the stock market lately.

Lastly, there is one Fed speaker: Bullard at 1:05 p.m. ET and investors will be listening closely for any clues as to what the Fed’s policy plans are into the end of the year.

Market Multiples Explained

What’s in Today’s Report:

  • Market Multiples Explained
  • Real Interest Rates and Gold

Futures are up modestly while international markets were mixed in quiet trade overnight as investors eyed the benign start of China’s NPC where 2019 forecasts largely met expectations while economic data was mixed.

China’s General Services PMI fell from 53.6 to 51.1 in February while Composite PMI data in Europe was better than expected which is helping EU shares outperform this morning.

Today, there are two Fed officials speaking early: Rosengren (7:30 a.m. ET) and Kashkari (9:30 a.m. ET), before a few notable economic reports are due to be released shortly after the bell: New Home Sales (E: 590K) and ISM Non-Manufacturing Index (E: 57.2). Beyond those potential catalysts, focus will remain on U.S. – China trade.