What’s in Today’s Report:
- It’s a Tightening Tantrum, Not a Taper Tantrum
- Weekly Market Preview: Will the Fed Ease Hawkish Concerns, and Will Earnings Improve?
- Weekly Economic Cheat Sheet: FOMC Decision Wednesday, Key Inflation Data
Futures are modestly lower as escalating Russia/NATO tensions erased early solid gains.
Tensions between Russia and NATO increased over the weekend as the US and UK reduced embassy personnel, implying a military conflict could be imminent.
Economically, the EU flash manufacturing PMI beat estimates at 59.0 vs. (E) 57.9, but the UK number slightly missed (56.9 vs. (E) 57.3).
Today’s focus will be on the U.S. Flash January Composite PMI (E: 56.7) and markets will want to see stable data to ensure the economy is solid heading into future Fed rate hikes. On the earnings front, there are three notable reports today, HAL ($0.34), IBM ($3.39), and LOGI ($1.22), but the really important reports won’t come until later this week.
On the geopolitical front, headlines have turned more ominous regarding a conflict in Ukraine, but as long as it’s limited and there isn’t imminent risk of a larger Russia/NATO conflict, then markets should largely look past the issue as it won’t impact economic growth or Fed policy.