The various conflicts and threats across eastern Europe and the Middle East will remain supportive for energy in the near term, but it already appears that some of the supply and production…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
supply concerns continue to linger after production and pipeline outages overseas buoyed prices last week…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Stock futures are trading at record highs as investors shrug off surging COVID cases and digest upbeat economic data.
New COVID cases topped 1 million in the U.S. Monday, nearly doubling the previous record, however, hospitalizations and deaths remain low, keeping economic lockdown odds minimal as the Omicron outbreak is increasingly expected to burn itself out in the coming weeks.
China’s Manufacturing PMI rose to 50.9 vs. (E) 50.0 in December further easing global growth concerns.
Today, there are two economic reports to watch: ISM Manufacturing Index (E: 60.5) and JOLTS (E: 11.060M). Investors will be looking for more good data, but not so good that rate hike expectations are brought forward.
There are no Fed speakers today. The January OPEC+ policy meeting will be underway soon (E: +400K b/d production hike in February) and if the group of oil producers disappoint the market, expect a potential spike in volatility that could spill over into both equity and bond markets.
What’s in Today’s Report:
Futures are sharply higher mostly on momentum from yesterday’s strong close and despite soft economic data.
EU and UK flash PMIs missed estimates thanks to drops in the service sector and that implies Omicron is a headwind on global growth in Europe.
But, for now that concern isn’t enough to stop a year-end Santa rally as the Fed was hawkish, but not too hawkish.
Looking forward, today will be a busy day. First, we get two important central bank decisions (Bank of England at 7:00 a.m. and ECB at 7:45 a.m), and while neither are expected to change policy if they are hawkish in a tone that could partially offset the current Fed rally.
Meanwhile, we also get a lot of economic data including, in order of importance: December Composite Flash PMI (E: 58.4), Philly Fed (E: 28.8), Jobless Claims (E: 200K), Housing Starts (E: 1.563M) and Industrial Production (E: 0.7%). Bottom line, the market will want to see stability in the data especially given the looming rate hikes in 2022, and the last thing the market will want to see is a material weakness in the data given the Fed’s new hawkishness.
What’s in Today’s Report:
Futures are modestly lower on a slightly hawkish Reuters article about ECB QE and as markets digest this week’s rally.
According to Reuters, the ECB is considering tapering its QE program in March, which is sooner than markets expected and is another reminder that global central banks will be removing accommodation throughout 2022.
Economic data was sparse overnight as Chinese CPI met expectations rising 0.4%.
Today the only notable economic report is Jobless Claims (E: 223K) and they should show continued improvement in the labor market. Additionally, markets will remain on the lookout for any official government data or more findings from MRNA/PFE on vaccine effectiveness against Omicron, and anything that implies substantial protection against infection and severe illness will be a tailwind on stocks (although at this point the market doesn’t view Omicron as a material threat so the tailwind won’t be that strong).
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What’s in Today’s Report:
Futures are slightly lower as markets digest Thursday’s rally ahead of the jobs report.
In Washington, the Senate passed a bill to avoid a government shutdown, removing a potential risk from markets.
The Omicron variant has been detected in five states now but symptoms so far appear mild.
Economically, EU and UK Composite PMIs generally met expectations.
Today focus will be on the Job Report and expectations are as follows: Job Adds 543K, UE Rate 4.5%, and Wages 5.0% y/y. As long as the jobs report is around expectations (so not above 700k but still showing solid job additions with wages not spiking) then markets will expect a mild acceleration of tapering and the rally can continue. We also get the ISM Services PMI (E: 65.0) and markets will be looking for a similarly “Just Right” number to show solid growth but nothing so strong it would encourage the Fed to substantially accelerate tapering of QE.
Omicron is causing significant volatility in the energy complex as the impact on demand is not yet known…analysts at Sevens Report Research wrote in Wednesday’s newsletter. Click here to read the full article.
What’s in Today’s Report:
Futures are solidly positive as markets bounce from Wednesday’s sell-off following a quiet night of news.
There are no definitive results yet, but the chatter on Omicron is that vaccines do still provide protection from severe illness, and that is slightly easing anxiety about the variant.
Economic data was sparse but showed continued inflation pressures as Euro Zone PPI rose 5.4% vs. (E) 3.2%.
Today the key report is Jobless Claims (E: 245K) and we expect a solid bounce back from last week’s very low numbers, but clearly, trends in the labor market continue to improve. We also get numerous Fed speakers including: Bostic (8:30 & 11:30 a.m. ET), Quarles (11:00 a.m. ET), Daly (11:30 a.m. ET), and Barkin (11:30 a.m. ET).
Bottom line, the market is dealing with three separate headwinds (ranked in order of importance): Omicron uncertainty, Fed tapering acceleration, and Washington dysfunction (possible shutdown). Positive headlines on any of them will help stocks bounce, while further negative headlines (like yesterday with a possible government shutdown) will cause another decline.
What’s in Today’s Report:
Stock futures are trading lower and international markets were mixed overnight as investors look ahead to a very busy day of economic data while volumes are already thinning out given the Thanksgiving holiday tomorrow.
Today, there is a slew of economic data due out including: Durable Goods Orders (E: 0.3%), Q3 GDP (E: 2.1%), Jobless Claims (E: 264K), New Home Sales (E: 790K), Core PCE (E: 0.4%, 4.1%), and Consumer Sentiment (E: 66.9).
There are no Fed officials speaking today however the November FOMC meeting minutes will be released at 2:30 p.m. ET.
Bottom line, investors will be looking for good economic data today, but not so good that it will cause the Fed to accelerate tapering plans or pull forward the first rate hikes. That is especially true for the Core PCE print as it is the Fed’s preferred measure of inflation.
What’s in Today’s Report:
U.S. stock futures are trading lower with most overseas equity markets as elevated bond yields continue to weigh on big-cap tech names.
Economically, Composite PMI data in Europe was better than expected with the Eurozone figure hitting 55.8 vs. (E) 53.1 for November however the upbeat data is further supporting bond yields which are weighing on equities.
Looking into today’s session, there is one domestic economic report to watch: PMI Composite Flash (E: 57.8) and if it is as strong as the releases in Europe, that could support a further rise in yields which will keep pressure on equity markets.
There are no Fed officials scheduled to speak today but the Treasury will hold a 7-Yr Note auction at 1:00 p.m. ET that could serve as another catalyst for higher yields. And again, that is a potential negative for stocks as big-cap tech names will almost certainly extend yesterday’s late-day declines if yields continue this week’s rise.