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Now What? Updated Market Outlook

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What’s in Today’s Report:

  • Now What?  Updated Market Outlook
  • Weekly Market Preview:  Will Yields Keep Rising?
  • Weekly Economic Cheat Sheet:  Key Growth Updates This Week

Futures are modestly higher on a bounce back from last week’s losses following a generally quiet weekend of news.

Economic data was sparse and the only notable report was EU M3 money supply, which rose less than expected (3.5% vs. (E) 3.9%).

Geopolitically, fears are easing that China will send arms to Russia (concerns about this weighed on stocks late last week and an easing of them is helping futures rally).

Today focus will remain on economic data and the two notable reports are Durable Goods (E: -4.0%) and Pending Home Sales (E: 1.0%).  While neither should be a major market mover, markets will want to see stable data (so reports that don’t imply growth is too strong, or too weak).  We also get one Fed speaker, Jefferson (10:30 a.m. ET).

Technical Update: Is This Another Bull Trap?

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What’s in Today’s Report:

  • Technical Update:  Is This Another Bull Trap?
  • EIA Analysis and Oil Market Update

Futures are flat following a quiet night and as solid CSCO earnings are helping stocks hold yesterdays’ gains.

CSCO beat estimates and raised guidance and the stock is up 4% pre-market and that’s helping broader sentiment.

Economically, the only notable number was the Chinese Home Price Index (in-line at –1.5%).

Today focus will remain on economic data and the key reports are (in order of importance):  Philly Fed (E: -7.2), PPI (E: 0.4%m/m, 5.5% y/y), Jobless Claims (E: 200K) and Housing Starts (E: 1.365M).  As has been the case, solid data that implies a “No Landing’ scenario should support stocks, as long as yields don’t spike too much.

We also have several Fed speakers today including Mester (8:45 a.m. ET), Bullard (1:30 p.m. ET) and Cook (4:00 p.m. ET) although they shouldn’t move markets.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • What Political Dysfunction Means for Markets (Not Now, But Later)

Futures are slightly higher following more signs of disinflation in the EU.

Euro Zone PPI fell more than expected (-0.9% vs. (E ) -0.5%) and that’s the third EU inflation statistic this week to imply inflation has peaked and is receding.

Politically, Rep. McCarthy failed to become Speaker again yesterday although he is expected to win eventually.

Focus today will be on economic data and the key reports are all employment related:  Challenger job cuts (Previous 76,835), ADP Employment Report (E: 145K) and Jobless Claims (E: 228K).  Again, markets want to see a moderation in this employment data so underwhelming reports will be embraced by the market.  Finally, we also have two Fed speakers, Bostic (9:20 a.m. ET) and Bullard (1:20 p.m. ET), but data will move markets more than Fed speak at this point.

Why Stocks Hit New Lows

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What’s in Today’s Report:

  • Why Stocks Hit New Lows

Futures are higher on potential improvement in the UK fiscal drama and on better than feared economic data.

UK PM Truss will meet with the UK Office for Budget Responsibility today and the hope is something comes from the meeting to further stabilize markets.

Economically, the September Chinese manufacturing PMI beat estimates and rose back above 50 (50.1 vs. (E) 49.4).

The key event today will be the result of the meeting between UK PM Truss and the Office for Budget Responsibility, as that whole situation needs to stabilize if stocks are going to hold up.  Beyond the UK fiscal drama, today there is an important inflation report, the Core PCE Price Index (E: 0.5% m/m, 4.8% y/y) but unless it surprisingly drops, it shouldn’t move markets.

Finally, there are several Fed speakers today but the most important one is Brainard (9:00 a.m. ET) and if she’s slightly dovish, that could help stocks further rally.  Other speakers include Barkin (8:30 a.m., 12:30 p.m. ET), Bowman (11:00 a.m. ET) and Williams (4:15 p.m. ET).