Not only did the headline badly miss expectations, falling to a 16-month low, but consumer inflation expectations for the year ahead within the report jumped from an upwardly revised 7.5% to 8.0%, which notably contradicts the…wrote The Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures are sharply lower following another profit warning from a national retailer and mixed economic data.
Restoration Hardware (RH) cut guidance just a few weeks after reporting earnings, citing a sudden deterioration in demand and increasing worries about corporate earnings.
Economic data was mixed as the Chinese manufacturing PMI rose back above 50, while German unemployment rose more than expected (5.3% vs. (E) 5.0%.
Today focus will be on the Core PCE Price Index (E: 0.4% m/m, 4.8% y/y) and if we get a materially hot number above the 4.8% yoy expectation, we can expect more selling pressure while a drop towards the mid 4% range would be a welcomed surprise (and likely cut the early morning losses). Today we also get weekly Jobless Claims (E: 226K), although that number shouldn’t move markets.
What’s in Today’s Report:
Stock futures are modestly lower thanks to some hawkish Fed chatter and another hot inflation print in Europe.
Economically, Spanish CPI jumped to 10.2% vs. (E) 9.2% in June, up from 8.5% in May suggesting inflation has not yet peaked, at least in parts of Europe.
Domestically, the Fed’s Mester reiterated that a 75 bp hike is likely in July given elevated consumer inflation expectations.
Today, there is one economic report to watch early: Final Q1 GDP (E: -1.4%) and investors would like to see the headline at least hold unchanged from the previous revision (if not get revised higher) before focus turns to several global central bankers speaking at an ECB Forum including Fed Chair Powell at 9:00 a.m. ET.
If the discussion takes on a more hawkish tone or there is any sign the market is losing confidence in the Fed (which would be evident in the bond markets) then yesterday’s selling pressure could continue.
What’s in Today’s Report:
Stock futures are modestly higher with global shares amid positive news out of China regarding covid policies.
China announced shortened quarantine times for incoming visitors in the latest move to ease covid-restrictions and potentially move away from their zero-Covid policy stance.
Economically, the German GfK Consumer Climate Index for July was no worse than feared at -27.4 vs. (E) -27.9 which is easing concerns about a swift drop-off in global economic growth.
Today, there are several economic reports to watch for: International Trade in Goods (E: -$102.0B), Case-Shiller Home Price Index (E: 1.8%), and most importantly Consumer Confidence (E: 101.0). Investors will want to see a continued slowdown in the data, but not to the degree that would raise concerns about a “hard landing.”
Two Fed officials are also scheduled to speak today: Barkin (8:00 a.m. ET) and Daly (12:30 p.m. ET) and there is a 7-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and influence stock trading.
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What’s in Today’s Report:
Futures are slightly higher mostly on momentum from last week’s rally and following a quiet weekend of news.
In China, the economic reopening continued as Shanghai reported no new COVID cases for the first time in two months while Beijing allowed most schools to reopen on Monday.
Geo-politically, Russia defaulted on a debt payment, but this was widely expected so it’s not impacting markets.
Today focus will be on economic data via Durable Goods (E: 0.5%) and Pending Home Sales (E: -2.5%) and markets will want to see continued moderation in the data (so a slowing of activity, but not a steep drop that might imply a “hard” economic landing).
What’s in Today’s Report:
Futures are moderately higher thanks mostly to momentum from Thursday’s close and despite more underwhelming economic data.
Economically, UK Retail Sales met expectations but fell sharply (–4.7% yoy) while the German Ifo Business Expectations Index missed estimates (85.8 vs. (E) 87.3).
Geo-politically, Russia continues to advance in the Donbas as Ukraine has withdrawn from the city of Severodonetsk.
Today focus will be on the inflation expectations in the University of Michigan Consumer Sentiment Index, and if we see a decline below 3.3% that could further the idea that inflation is peaking (and extend the rally in stocks). Other data today includes New Home Sales (E: 587K) and one Fed speaker, Daly at 4:00 p.m. ET, but they shouldn’t move markets.
What’s in Today’s Report:
Futures are slightly higher despite disappointing economic data and a greater than expected rate hike from another foreign central bank.
June flash PMIs were mixed as the EU flash Composite PMI dropped sharply (51.9 vs. (E) 54.0) while the UK flash Composite PMI slightly beat estimates (53.1 vs. (E) 52.7).
The Norges Bank (Central Bank of Norway) became the latest central bank to hike more than expected (50 bps vs. 25 bps).
Today’s focus will be on economic data via the Flash Composite PMI (E: 56.3) and Jobless Claims (E: 225K), and the market will be looking for moderation in the data (small declines that imply Fed hikes are working, but not drastic declines that imply economic growth is careening off a cliff). We also get the second half of Powell’s Congressional Testimony before the House Financial Services Committee, but that shouldn’t yield any surprises.
Finally, oil continues to be one of the most important short-term market influences. If oil can fall further, that will put a tailwind on stocks.
What’s in Today’s Report:
Stock futures are sharply lower with global shares as much of yesterday’s rally is being given back amid a resurgence in growth concerns ahead of Powell’s testimony today.
U.K. CPI met estimates at 9.1% but Input PPI jumped 22.1% vs. (E) 19.4% stoking fears that central banks will have to be even more aggressive to get inflation under control in the months ahead.
There are no notable economic reports today but there are multiple Fed speakers: Barkin (9:00 a.m. & 12:00 p.m. ET), Powell (9:30 a.m. ET), Evans (12:55 p.m. ET), and Harker (1:30 p.m. ET).
Then in the afternoon, there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could move yields and impact equity markets.
Bottom line, the focus will be on Powell’s testimony before the House this morning as there has been a resurgence in concerns about global growth in the face of the latest broad shift to more aggressive central bank policy in response to sticky and elevated inflation pressures globally. And if Powell is seen as getting more hawkish, or the market shows signs of losing confidence in the Fed’s policy plans, we could potentially see stocks test the 2022 lows.
What’s in Today’s Report:
Stock futures are solidly higher this morning, rebounding from last week’s more than 5% selloff while global markets stabilized following a mostly quiet weekend.
President Biden and St. Louis Fed President, Jim Bullard, both downplayed the threat of a severe recession on Monday which is helping drive risk-on money flows this morning while there were no market-moving economic reports overnight.
From a catalyst standpoint, there is just one economic report today: Existing Home Sales (E: 5.40M) and two Fed officials are scheduled to speak: Mester (12:00 p.m. ET) and Barkin (3:30 p.m. ET).
Bottom line, for this morning’s relief rally to continue today the market will need to see stable price action in bond markets, economic data meet or beat expectations and Fed officials to maintain an optimistic tone as that could see the S&P 500 test near term resistance between 3,780 and 3,840.
What’s in Today’s Report:
Stock futures are bouncing modestly with European shares and bond markets are stable this morning as inflation data met expectations in the Eurozone and the BOJ decision was viewed as dovish versus expectations.
The BOJ maintained a very easy monetary policy, sending the yen back towards recent lows while Eurozone HICP (their CPI equivalent) came in at 8.1% vs. (E) 8.1% y/y which is helping markets stabilize this morning.
Looking into today’s session, there is one economic report to watch: Industrial Production (E: 0.4%) and the market will be looking for a strong print to ease concerns surrounding this week’s soft survey-based factory data and bolster the outlook for economic growth in the face of an aggressive Fed.
Fed Chair Powell is also set to deliver a speech at 8:45 a.m. ET and any comments on the economy or future policy plans could move markets today.
Finally, today is quadruple witching options expiration so expect very heavy volumes and the potential for momentum to build in either direction as derivatives traders square their books into the end of the quarter. In the S&P 500 3,650, 3700, and 3750 will all be key levels to watch into the afternoon today.