Economic Breaker Panel: September Update
What’s in Today’s Report:
- Economic Breaker Panel – September Update
- Empire Manufacturing Index and Industrial Production Takeaways
- Levels to Watch in the Dollar and 10-Yr Yield, Post-FOMC
Stock futures are trading modestly higher this morning following a positive revision to this year’s global economic outlook by the OECD and largely dovish Fed expectations.
The Organization for Economic Cooperation and Development said the global economy will likely contract by -4.5% this year; improved from the -6.5% expectation in June. The more upbeat economic outlook paired with hopes for more monetary and fiscal accommodation are helping fuel risk-on money flows in early trade this morning.
Looking into today’s session, focus will be on economic data early as the Retail Sales report (E: 1.0%) will shed some light on the health of the U.S. consumer since the initial coronavirus relief measures began to run out in July, and a bad number could hit stocks in early trade. Additionally, there are two lesser followed reports due out shortly after the bell: Business Inventories (E: 0.1%) and Housing Market Index (E: 78) but neither should materially move markets.
After the economic data, focus will shift to the Fed and markets will likely settle in for a typical and choppy session into the FOMC Meeting Announcement (2:00 p.m. ET) and Fed Chair Powell’s Press Conference (2:30 p.m. ET) in the afternoon.
Market expectations for the Fed today remain rather dovish so if Powell and company can meet expectations, stocks should be able to hold the week-to-date gains or potentially extend them, but the risk is to the downside as a hawkish disappointment is far from priced in and could trigger a test of last week’s lows.