Oil prices fell more than 2% as risks of a recession “weighed heavily” on the market, analyst Tom Essaye of the Sevens Report, wrote in a Monday note. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower mostly on momentum from last week’s declines and following a generally quiet weekend of news.
Geo-politically, Russian President Putin and Ukrainian President Zelensky gave interviews over the weekend and neither implied the war would end anytime soon, which is a mild disappointment for markets.
Chinese authorities ended the lockdowns in Chengdu, but gave no indication the “Zero COVID” policy will change.
Today the calendar is sparse given there’s only one economic report, Housing Market Index (E: 48), and the UK and Japanese markets are closed. So, positioning ahead of Wednesday’s FOMC decision should drive markets, and unless we get some positive corporate commentary to offset the FDX guidance, the path of least resistance into the Fed is lower.
What’s in Today’s Report:
Futures are slightly lower following a mostly quiet night as investors await today’s jobs report.
Economic data was disappointing as German exports unexpectedly declined (-2.1% vs. (E) 4.1%) while Euro Zone PPI was hotter than expected (37.9% y/y vs. (E) 36.4% y/y).
In China, authorities announced that companies in Chengdu could implement “closed loop” systems and stay in operation, which should reduce supply chain disruptions.
Today the key event is the August Employment Situation report and expectations are as follows: Job Adds: 293K, UE Rate: 3.5%, Wages: 0.4% m/m, 5.3% y/y. If markets can get a “Just Right” number (small job adds, a rise in the unemployment rate and a drop in wages) then stocks can extend yesterday’s rally as that will be the second straight “Goldilocks” report in two days (the other being yesterday’s ISM Manufacturing PMI) and it’ll increase hopes for an economic soft landing.
What’s in Today’s Report:
Futures are down close to 1% on follow through selling from Friday as hopes of a near term “Fed Pivot” continue to fade in reaction to Powell’s speech last week.
European shares are also sharply lower as tightening expectations for the ECB rose sharply on Friday. Markets are now pricing in a minimum 50 bps hike next week with a 75 bps hike a real possibility.
There were no notable economic reports overnight.
Markets dropped on Friday as Powell dismissed the idea of an imminent “Fed Pivot,” but the ECB also signaled more hawkish intentions on Friday, and it was the two events that combined to cause the ugly declines. Today there are no economic reports but there is an important Fed speaker, Brainard (2:15 p.m. ET) and if she echoes Powell’s comments from Friday, expect more losses in stocks.
What’s in Today’s Report:
Futures are slightly higher as comments by San Francisco Fed President Daly are being interpreted as slightly dovish. San Francisco Fed President Daly spoke after the close Thursday and said that Wednesday’s CPI was a “welcome sign” that could lead to a “slowing” in the pace of rate hikes (to 50 bps in September, not 75 bps).
Economic data was better than expected as both UK and EU Industrial Production slightly beat estimates.
Today focus will be on the University of Michigan 5-Year Inflation Expectations (E: 2.9%) as that’s the first inflation reading in August, and if it drops below expectations we should see a continued tailwind on stocks.
What’s in Today’s Report:
Futures are slightly lower thanks to more tech stock weakness following a mostly quiet night of macroeconomic news.
Micron (MU) became the second large semiconductor company to produce negative earnings guidance (Monday it was Nvidia) as MU slashed its outlook, and that’s weighing on markets this morning.
Geo-politically, the FBI raid on Mar-a-Lago is dominating news coverage, but it has no impact on markets.
Today’s focus will remain on inflation via Unit Labor Costs (E: 9.3%) and if they come to light, that will further strengthen the idea that inflation is peaking and help to support stocks into tomorrow’s CPI report.
Demand concerns are now the dominant influence on the global energy market and even though supply worries will persist with the Russia-Ukraine war, we will need to see evidence of demand stabilizing for the oil market to begin to find a near-term bottom,” analysts at Sevens Report Research wrote. Click here to read the full article.
That could be because traders are “holding out hope that the consumer price index report is going to be good,” Tom Essaye, founder of Sevens Report Research, said on Friday. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher thanks to solid Chinese economic data and following a mostly quiet weekend.
Chinese exports rose more than expected (18% vs. (E) 14.1%) and that’s helping to slightly improve global economic sentiment.
Politically, Senate Democrats passed the Inflation Reduction Act over the weekend as expected and it should become law this week. But, markets don’t expect any meaningful impact on corporate earnings in the n
Today there are no notable economic reports and most of the focus will be on the specific implications of the Inflation Reduction Act, which should pass the House this week. But, this bill does not appear to have any meaningful macro-economic implications. So, markets will look ahead to Wednesday’s all-important CPI report, and with stocks still extended, it needs to be better than expectations to support the rally.
What’s in Today’s Report:
Futures are flat ahead of today’s jobs report and following a generally quiet night of news.
The only notable economic report was German Industrial Production and it beat estimates rising 0.4% vs. (E) -0.4%.
Geo-politically, China suspended military, climate, and drug enforcement communications with the U.S in retaliation for the Pelosi visit to Taiwan. But, unless retaliation from China impacts U.S./China trade or commodities prices, markets will largely ignore it.
Today the focus will be on the jobs report and the key for markets is that it shows easing wage pressures and moderation in the labor market. So, a mildly underwhelming reports vs expectations (E: 250K job adds, 3.6% UE Rate, 5.0% y/y wage growth) is the best outcome for stocks.
There’s also one Fed speaker today, Barkin at 8:00 a.m. ET, but he shouldn’t move markets.