Three Keys to a Bottom (Specifics)

What’s in Today’s Report:

  • Three Keys to a Bottom (Specifics)
  • Weekly Market Preview:  Can Easing Chinese Restrictions Fuel a Bigger Bounce?
  • Weekly Economic Preview:  May Data in Focus (Empire Today, Philly Wed)

Futures are modestly lower on disappointing Chinese economic data and as India banned wheat exports.

Chinese Industrial Production fell –2.9% vs. (E) 0.5% and Retail Sales plunged –11.1% vs. (E) -6.6%, underscoring the economic damage from the COVID lockdowns.

Geo-politically, India banned the export of wheat over the weekend, a move that will likely exacerbate global shortages and keep wheat/commodity prices high.

Today’s focus will be on economic data via the Empire State Manufacturing Index (E: 15.0), which is the first data point for May.  Markets will want to see stability in the data to ward off stagflation concerns and the bigger the drop in the price index, the better.  We also get one Fed speaker, Williams (8:55 a.m. ET), but he shouldn’t move markets.

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How Far Are Investors Willing to Stretch?

What’s in Today’s Report:

  • How Far Are Investors Willing to Stretch?
  • Weekly Market Preview:  Wuhan virus updates, Fed testimony.
  • Weekly Economic Cheat Sheet:  An Important Look at Consumer Spending This Week

Futures are slightly higher following a quiet weekend of news.

Wuhan virus related fears receded further over the weekend as the virus continued to spread, but at a slower pace than before and experts think the transmission rate of the disease has peaked.  Additionally, factories in China will gradually reopen this week, potentially limiting any economic fallout.

Economic data was sparse overnight although Chinese CPI rose 5.4% vs. (E) 4.9%, which should reduce hopes of any additional, large scale stimulus from Chinese authorities.

Today there are no economic reports and no Fed speakers, so focus will remain on any Wuhan virus headlines.  The key right now is the factory re-openings in China.  As long as there isn’t any news that implies factory re-openings will be delayed beyond this week (and in doing so put more pressure on the economy) than Wuhan virus related fears should continue to decline.

The Most Important Week of the Year

What’s in Today’s Report:

  • Fed Week – Why This is the Most Important Fed Decision of the Year
  • Weekly Market Preview – Will the Fed Meet Incredibly Dovish Expectations?
  • Weekly Economic Cheat Sheet – One of the Busiest Weeks of the Year (Jobs Report, Inflation Data, Global PMIs)

Futures are little changed following a quiet weekend as all eyes now turn to the Fed decision on Wednesday.

Former Fed Chair Yellen endorsed a rate cut over the weekend, but did not advocate for sustained easing.   And, this gets right to the heart of this market.  We know the Fed will cut 25 bps this week, but we don’t know if they’ll signal the start of a sustained easing campaign (i.e. 75-100 bps of cuts by year-end) and that’s something the market has already aggressively priced in at these levels.

Economic data was sparse over the weekend although Japanese Retail Sales (0.3% vs. (E) 0.1%) beat estimates.

There was no notable U.S.-China trade news over the weekend and expectations are low for any actual progress at the talks this week.

Today there are no notable economic reports nor any important central bank speak, so focus will remain on earnings (this is the last important week of earnings) and on any U.S.-China trade headlines (although none are expected).

Fed Expectations and Earnings

What’s in Today’s Report:

  • Weekly Market Preview (Fed Expectations and Earnings)
  • Weekly Economic Cheat Sheet (July Flash PMIs this week).

Futures are slightly higher on positive U.S.-China trade headlines following an otherwise quiet weekend.

Tech firms will meet today with administration officials to discuss the Huawei tech ban, while multiple reports stated China will increase soybean purchases and a face to face meeting between Chinese & U.S. officials could occur soon.

Fed policy expectations continue to shift back to a 25 basis point rate cut next week as hope for a 50 basis point cut continues to recede.

Today there are no economic reports and no Fed speakers as we enter the “quiet period” ahead of next Wednesday’s rate decision.  So, there’s not much on the calendar today that could cause volatility, although headlines from the tech company/administration meeting today on Huawei is something to watch, as any hints at relaxing of the ban will be a mild positive for stocks.  Earnings are sparse today as well although I’ll be watching Whirlpool (WHR $3.80) results after the close for any insight into the state of the U.S. consumer.

What the Strong Jobs Report Means for Markets

What’s in Today’s Report:

  • What Friday’s Jobs Report Means for the Markets
  • Weekly Market Preview (Powell’s testimony is the big event this week)
  • Weekly Economic Cheat Sheet (Fed Minuets and CPI)

Futures are slightly lower this morning following a quiet weekend of news, as markets digest what Friday’s jobs report means for future Fed rate cuts.

Following the jobs report, investors still expect a rate cut this month, but what’s now in doubt is whether we see additional cuts after that, something the market is assuming and has already priced in.  Doubts over the number of future cuts is why stocks dipped Friday and are marginally lower this morning.

Economic data was again underwhelming as Japanese Machine Orders (-7.3% vs. (E) -3.0%) and German Industrial Production (-3.7% vs. (E) -3.2%) missed estimates, while German exports were slightly better (-1.1% vs. (E) -0.9%).

The important events this week come Wednesday via Fed Chair Powell’s testimony before Congress (will he telegraph a rate cut?), the FOMC Minutes (also out Wednesday – is there consensus for a cut?) and CPI (out Thursday).  So, today should be generally quiet as there are no economic reports or notable Fed speakers, although U.S.-China trade negotiations will re-start, so we’ll have to watch for any headlines from there.

It’s G-20 Week (Trump/XI Meeting Friday)

What’s in Today’s Report:

  • Weekly Market Preview:  G-20 Looms But There Are Important Events Before That This Week
  • Weekly Economic Cheat Sheet:  All About Inflation (It Needs to Stay Low)

Futures are modestly higher following a generally quiet weekend as markets look ahead to the Trump/Xi meeting at the G-20 later this week.

News from the weekend focused on geo-political tensions between the U.S. and Iran but for now that situation isn’t impacting markets outside of oil (which is higher again).

The only notable economic report was German Ifo Business Expectations and it slightly missed estimates (94.2 vs. (E) 94.6).

There are no economic reports today nor are there any Fed speakers, so markets will be driven by any headlines on U.S./China trade (leaks about the upcoming Trump/Xi meeting) or Iran/U.S. tensions (the U.S. is anticipated to announce major new sanctions against Iran).

S&P 500 Back At 2900: What’s Changed Since October

What’s in Today’s Report:

  • S&P 500 Back At 2900:  What’s Changed Since October.
  • Weekly Market Preview (All About Earnings)
  • Weekly Economic Cheat Sheet (More Important Chinese Data)
  • I’ll be joining Liz Claman on Countdown to the Closing Bell at 3:55 p.m. today on Fox Business to Discuss the Markets.  Tune In!

Futures are flat following a quiet weekend as markets digest last week’s rally.

Expectations of a U.S./China trade deal continue to rise, with some anticipating an announcement this week.  The WSJ, Reuters and others had positive articles this morning.  But, as a reminder, the market has already priced in a deal, so the real focus of any announcement will be when tariffs are removed, and the sooner, the better.

There was no notable international or U.S. economic data overnight.

Today there is one notable economic report, Empire State Manufacturing Index (E: 6.8) and one Fed speaker, Evans at 8:30 a.m. & noon.  Given that somewhat light calendar, focus will be on earnings, and some numbers we are watching today include: C ($1.78), GS ($5.05), JBHT ($1.25).  If data and earnings are solid, this rally can continue.

Can The S&P 500 Breakthrough 2900?

What’s in Today’s Report:

  • The Next Positive Catalyst For Stocks (Potentially)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (Chinese Exports The Big Number This Week)

Futures are slightly weaker following a generally quiet weekend as markets digest last week’s rally.

Economic data was mixed and is putting mild pressure on stocks this morning as German exports missed expectations (-1.3% vs. (E) 0.1%), reminding markets the global economy isn’t healed yet.

U.S./China trade talks ended last week without an announcement of a deal but talks will continue this week via video-conference and a deal is still widely expected.

Today there are no economic reports and no Fed speakers, so focus will remain on any U.S./China headlines (again a deal could be announced any minute).  But, barring any surprises today should be generally quiet as the big events of the week (FOMC Minutes, Chinese data, bank earnings) happen Wed-Friday.

Updated Equity Market Outlook

What’s in Today’s Report:

  • Updated Equity Outlook:  A Resilient Market vs. Two Building Headwinds
  • Weekly Market Preview (All About Data)
  • Weekly Economic Cheat Sheet

Futures are sharply higher following better than expected global PMIs as hope for a global economic rebound stays alive.

China’s “official” Manufacturing PMI rose to 50.5 vs. (E) 49.8 in March, Japan’s Manufacturing PMI rose to 49.2 vs. (E) 48.9, and the UK’s Manufacturing PMI surged to 55.1 vs. (E) 51.2.

The only disappointment in Europe, where the EU Manufacturing PMI slipped to 47.5 vs. (E) 47.6, and inflation also underwhelmed.

Today focus will remain on economic data and the key report today is the ISM Manufacturing Index (E: 54.2).  If that number can beat expectations, it will further reinforce the idea of a growth rebound and bonds yields should rise, the dollar should fall, and this morning’s rally should be extended, although I think it’s hard to imagine the S&P 500 moving more than a percent or two ahead from here of earnings season (more on that in the issue).  Other reports today include Retail Sales (E: 0.3%) and Construction Spending (E: -0.2%).

Finally, a “head’s up” that today is April Fool’s Day, just in case anyone (in my case most likely my children) tells you something preposterous!

Seven Ifs Updated

What’s in Today’s Report:

  • Seven “Ifs” That Will Move This Market Updated (Not Much Progress)
  • Weekly Market Preview (All About China)
  • Weekly Economic Cheat Sheet (Important Numbers This Week, Starting Today)

Futures are slightly higher following a generally busy weekend of economic, geo-political and Fed related news.

Economic data was mixed as CN New Yuan Loans slightly missed estimates (885 bln vs. (E) 950bln), as did German IP (-0.8% vs. (E) 0.5%) while German exports beat estimates.

On trade, the Trump/Xi summit appears to have been delayed till April, although a trade deal is still expected so this delay isn’t a negative for markets, yet.

Fed Chair Powell was on 60 Minutes Sunday night but didn’t say anything new so it’s having no impact on markets.

Today markets will be focused on the Retail Sales (E: 0.0%) report, in part because Powell specifically cited it as something he’d be watching in the 60 Minutes interview.  The key to this number, as always, is the “Control” group which is retail sales less gas, autos and building materials, and the market estimate is 0.7%.  A beat of that estimate will provide a boost of confidence for the economy, while a miss will exacerbate fears of a potential slowdown.