The bottom line is that the market does expect something more” from the central bank, analysts at Sevens Report Research wrote in Monday’s latest newsletter. That doesn’t mean more quantitative easing, but “it does mean some sort…” Click here to read the full article.
What’s in Today’s Report:
Futures are little changed as markets look past President Trump’s executive orders on economic stimulus following an otherwise quiet weekend.
With stimulus talks again at an impasse, President Trump issued several executive orders over the weekend to provide economic stimulus, including $300/week in federal unemployment and a payroll tax deferral.
But, for a multitude of reasons (legal and otherwise) none of these actions will have any immediate economic impact, so the market still expects a stimulus bill to be passed (but now in the coming weeks, not immediately).
Today there’s one labor market number, JOLTS (E: 5.288M), but that shouldn’t move markets, and instead focus will be on stimulus. Today, the key is that both the Democrats and Republicans signal they are going to continue negotiations on the stimulus bill. If the rhetoric implies the talks have stalled completely, that that will likely pressure stocks.
“We need global growth to stabilize to help propel stocks higher from here. The currency and bond markets continue to flash large and…” Click here to read the full article.
What’s in Today’s Report:
S&P futures have turned negative in pre-market trading as bond yields continue to bleed lower with the benchmark 10-yr yield hitting fresh lows in the mid-2.30% range overnight.
Economically, Chinese Industrial Profits were down -14.0% YTD, falling from -1.9% in December.
The Reserve Bank of New Zealand was the latest central bank to turn decidedly dovish overnight citing concerns about the global economy while Brexit angst also persists amid new votes in Parliament today.
The list of catalysts in the Wall Street session is a short one today with only one economic report due out: International Trade (E: -$57.4B) and just one Fed speaker later in the evening: George (7:00 p.m. ET).
That will again leave the market primarily focused on the bond market and to a lesser degree the dollar. Recession fears are front and center right now with Fed funds futures pricing in more than 80% odds of a rate cut in the next 10 months as of this writing.
Bottom line, without a rebound in yields and at least a steady dollar (a pullback would be more favorable) then it will be very difficult for stocks to mount any sort of rally today.
What’s in Today’s Report:
Futures are slightly lower thanks to continued momentum from Friday’s sell off. Outside of politics, it was a generally quiet weekend.
Economically, we got an upside surprise from German IFO Business Expectations, which rose to 95.6 vs. (E) 94.0 and that offsets a small part of last week’s bad PMIs (but not nearly enough to address growth concerns).
Politically, the release of the Mueller report dominated headlines over the weekend, but as has been the case for nearly two years, this topic is not an influence on markets.
There are no economic reports today and no material Fed commentary, so focus today will be on whether the S&P 500 can stabilize and hold 2800. The Mueller report will continue to dominate media coverage, but again this simply isn’t an influence on stocks, Treasuries or the dollar.
What’s in Today’s Report:
Futures are moderately lower following more disappointing European economic data.
EU flash PMIs were a disappointment again, as the composite EU PMI fell to 51.3 vs. (E) 51.4. Manufacturing was especially bad as the EU flash manufacturing PMI dropped to 47.6 vs. (E) 49.5, a five year low.
Today the highlight will be the Flash Composite PMI (E: 55.2). That number was always going to be important, but it’s even more important now following the disappointing EU economic data, as markets will need more proof the U.S. can withstand failing global growth to continue this rally. Other events today include Existing Home Sales (E: 5.080M), Wholesale Trade (E: 0.1%) and Fed speaker Bostic (9:30 p.m. ET) but none of those should move markets.
What’s in Today’s Report:
Futures are slightly lower following a quiet night as markets digest more mixed economic data following the big three day rally.
Chinese economic data was mixed as Industrial Production missed estimates (5.3% vs. (E) 5.5%) while Fixed Asset Investment slightly beat and Retail Sales met expectations.
Geo-politically it was a quiet night as there were no updates to U.S./China trade.
Today focus will be on economic data via the Jobless Claims (E: 225K), Import Export Prices (E: 0.3%, 0.2%) and New Home Sales (E: 620K), as well as testimony before Congress by Treasury Secretary Mnuchin. Finally, there’s a GE guidance update later this morning, and if that’s particularly soft, that could hit stocks.
“If you think about it from a total cost stand point, eliminating the subsidized loans will hurt borrowers in so much as it will cost them more over the time of the loan,” said Tom Essaye, President of Sevens Report Research. Click here to watch the full interview.
What’s in Today’s Report:
Stock futures are marginally higher this morning after a very quiet night of news while no major international market moved more than 1% overnight.
Asian shares declined modestly after a report that Japanese Machine Orders fell –5.4% in January vs. (E) -1.9%.
In Europe, EU Industrial Production beat expectations (1.4% vs. E: 1.0%) while focus remains on today’s “hard Brexit” vote in the U.K. (which is very unlikely to pass).
Looking into today’s U.S. session, focus will be on economic data early with two reports due ahead of the bell: Durable Goods Orders (E: -0.8%), PPI (E: 0.2%), and one shortly after the open: Construction Spending (E: 0.3%).
There are no Fed officials speaking today so investor focus will shift to the “hard Brexit” vote but it is very unlikely to pass which will result in another vote to delay the Brexit date tomorrow. This scenario is priced in however and should not materially move markets.
What’s in Today’s Report:
U.S. futures are up small while Asian markets were notably higher overnight as the indexes continued to play “catch up” to the big gains in the US since mid-day Friday while EU markets are flat as investors eye today’s Brexit vote.
News that the EU made some last minute concessions to the Brexit agreement ahead of today’s vote in Parliament was seen as a positive o/n but a deal still remains unlikely.
The NFIB Small Business Optimism Index was 101.7 vs. (E) 102.5 in February but encouragingly some of the forward looking details did improve.
The two primary catalysts in the U.S. today both hit before the open with CPI (E: 0.2%) at 8:30 a.m. ET and then the Fed’s Brainard speaks at 8:45 a.m. ET. Focus will then return to today’s Brexit vote and while a “deal” is not likely, it will be the lack of a delay to the deadline that would hit the pound and risk assets globally.