Microeconomics vs. Macroeconomics
What’s in Today’s Report:
- Why Market Technicals, Internals, and Derivatives Are Weighing On Stocks Despite Mostly Good Fundamentals
- The True Driver of This Pullback Remains Microeconomic, not Macroeconomic
- CPI Takeaways
Futures are bouncing today while most international markets declined overnight amid stagflationary economic data.
Chinese Industrial Production, FAI, and Retail Sales data all missed estimates with the latter underwhelming by the largest margin which weighed on risk assets overnight, sparking renewed concerns about the pace of the global recovery.
Meanwhile, in Europe, CPI in the U.K. jumped from 2.0% to 3.2% in August, the largest monthly increase since 1997 which rekindled concerns about global inflation pressures despite yesterday’s soft CPI print in the U.S.
Today, focus will be on economic data early with the Empire State Manufacturing Index (E: 18.6), Import & Export Prices (E: 0.3%, 0.5%) and Industrial Production (E: 0.5%) all due out by mid-morning.
Investors will be looking for good growth (but not “too hot”) and fading inflation pressures (specifically in the Empire release as it is a September data point). Otherwise, more signs of stagflation, like we saw in the data overnight, could cause further selling across risk assets including stocks today.