How Much Have Things Improved?

What’s in Today’s Report:

  • Updated Market Outlook:  How Much Have Things Improved?
  • Weekly Market Preview (ECB Thursday is the Key)
  • Weekly Economic Cheat Sheet (Retail Sales Friday)

Futures are marginally higher following a generally quiet weekend as markets continue to digest some (very) mild progress on U.S./China trade.

Economic data was mixed as Chinese exports missed expectations (-1.0% vs. (E) 2.5%) while German exports (0.7% vs. (E) -0.5%) and British Industrial Production (0.3% vs. (E) 0.1%) both beat expectations.

But, the reports aren’t moving markets as focus is on central banks this week (specifically the ECB on Thursday).

Today there are no notable economic reports nor are there any Fed speakers (they are entering the “blackout” period ahead of next Wednesday’s meeting) so we’ll be watching for any trade related headlines, and any continued improvement in the “tone” of relations will continue to support stocks.

What New Tariff Threats Mean for Markets

What’s in Today’s Report:

  • What Trump’s Tariff Threats Mean for Markets
  • Updated Market Outlook (Beyond Tariffs/Trade)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (All About Inflation)

Futures are sharply lower after President Trump renewed tariff threats against China, putting the expectation for a U.S./China trade deal in doubt.

President Trump threatened to increase tariffs on Chinese imports to 25% on 200 billion this Friday if a trade deal is not complete.

Outside of trade, economic data was mixed.  Chinese composite PMI declined (52.7 vs. (E) 52.9) while Euro Zone composite PMI and retail sales slightly best estimates.

Today there is one Fed Speaker: Harker (9:30 a.m. ET) but obviously the focus of markets will be on any trade updates.  As of this writing, the Chinese trade delegation is still coming to the U.S. for more negotiations this week.  If that is cancelled, look for stocks to take another leg lower.  Conversely, if it’s announced Chinese Vice-Premier Liu He is attending the talks, that will be a positive.

From a technical standpoint, 2890 in the S&P 500 is notable support and if that’s broken, selling could accelerate.

2019 Market Outlook

What’s in Today’s Report:

  • 2019 Market Outlook
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (There are a lot of big reports this week)

Futures are higher on the final trading day of 2018 as a positive tweet on U.S./China trade is offsetting more weak Chinese economic data.

President Trump tweeted over the weekend that U.S./China trade talks were making “big progress,” raising expectations for a deal in early 2019.

Chinese economic data missed estimates as the December Manufacturing PMI dropped to 49.4 vs. (E) 50.0, signaling outright contraction. It was the lowest reading since 2016.

There are no notable economic reports or Fed speakers today so I’d expect end of year positioning to dominate trading.