“Stocks are digesting the declines of the past two weeks and while there are some notable employment and inflation numbers looming on Thursday and Friday, the bottom line is the calendar into year-end should be mostly quiet, again barring any material surprises,” Tom Essaye, the founder of Sevens Report Research, wrote Wednesday. Click here to read the full article.
What’s in Today’s Report:
U.S. equity futures have a tentative bid to start the new year today as tech stocks are outperforming amid a sharp pullback in Treasury yields.
Economically, China’s Manufacturing PMI fell to 49.0 in December from 49.4 in November while the U.K.’s Manufacturing PMI came in at 45.3 vs. (E) 44.7 last month. Both figures remained well below 50, in contraction territory, and that is seeing some of the recent hawkish central bank expectations unwind as we begin the new year.
Looking into today’s session, there are two economic reports to watch in the U.S., the Manufacturing PMI (E: 46.2) and Construction Spending (E: -0.4%).
Investors will be looking for data that points to a continued slowdown in growth but a more pronounced drop in price readings as that should help further ease hawkish policy expectations and allow the early but tentative risk-on money flows to continue.
There are no Fed officials scheduled to speak and no notable Treasury auctions today. That will leave investors focused on Treasuries as a continued drop in yields today should support a continued bid in tech stocks and equities more broadly as traders reposition into the new year.
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What’s in Today’s Report:
Futures are slightly higher following a quiet night of news as markets bounce following Wednesday’s declines.
The economic calendar was mostly quiet overnight and the only notable economic report was Euro Zone Money Supply while was essentially in-line with expectations, rising 5.4% vs. (E) 5.5%.
In China, COVID cases continue to explode higher and there were reports of overwhelmed hospitals, but officials are proceeding with a full economic reopening.
Today the focus will be on Jobless Claims (E: 222K) and markets will want to see this number move higher towards 250k (and ultimately 300k). If claims remain stubbornly low, that could weigh on stocks (like it did last week).
“Stocks are digesting the declines of the past two weeks and while there are some notable employment and inflation numbers looming on Thursday and Friday, the bottom line is the calendar into year-end should be mostly quiet, again barring any material surprises,” Tom Essaye, the founder of Sevens Report Research, wrote Wednesday. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher following a quiet night of news as investors digest Thursday’s declines and look ahead to the long weekend.
Economically the only notable report was Japanese CPI and it came in slightly lower than expectations at 3.7% y/y vs. (E) 3.8% y/y. but it didn’t move markets.
Today focus will be on economic data and the key reports are, in order of importance: Core PCE Price Index (E: 0.2% m/m, 4.6% y/y), University of Michigan Consumer Sentiment (E: 59.1), Durable Goods (E: -0.8%) and New Home Sales (E: 600k). Markets will want to see further confirmation of dis-inflation in the Core PCE Price Index and the Five Year Inflation Expectations in the University of Michigan report, and if that happens it could spur a mild rally following yesterday’s declines.
What’s in Today’s Report:
Futures are slightly lower following a disappointing earnings report by Micron (MU).
Micron (MU down –3% after hours) reported underwhelming results and guidance and announced layoffs, and that’s reversing some of the earnings-driven gains we saw in stocks on Wednesday.
Economic data remained sparse but UK GDP slightly missed estimates, falling –0.3% vs. (E) -0.2%.
Today’s focus will be on Weekly Jobless Claims (E: 225k) and this number needs to move higher (towards 300k) to show the Fed that the labor market is returning to better balance (something the Fed said is needed before they can think about a pivot). We also get the Final Q3 GDP (E: 2.9%) but that data is very old now (July-September) and it shouldn’t move markets.
“A lot of people are throwing in the towel on the year, for lack of a better word, and you’re seeing people sort of remove some of those hopeful year-end bullish bets,” Tom Essaye, founder of Sevens Research, told Barron’s on Monday. Click here to read the full article.
What’s in Today’s Report:
Futures were volatile overnight but are now little changed following the Bank of Japan’s shock announcement of an effective interest rate increase.
The BOJ announced that it is widening the trading band on the 10 year Japanese Government Bond to 0.00% – 0.50% from the previous 0.0% – 0.25%. This amounts to a 25 basis point rate hike.
Economic data was positive as German PPI fell more than expected (-3.9% m/m vs. (E) -2.2%) in what is another sign of global dis-inflation.
Today there is one economic number, Housing Starts (E: 1.4M), but that won’t move markets.
Instead, focus will be on the fallout from the BOJ surprise “ rate hike.” Bottom line, markets dropped late last week and yesterday in part on higher global bond yields (following the hawkish ECB announcement) so this rate hike by the BOJ is another headwind and I’d not be surprised to see stock decline modestly on this news today, barring any positive surprises.
What’s in Today’s Report:
Futures are slightly higher on a mild oversold bounce following last weeks’ losses and a quiet weekend of news.
China announced the closing of schools in Shanghai on Monday in response to surging COVID cases, but the broader economic reopening remains on track.
Economically, the German IFO Business Expectations Survey was higher than expected (83.2 vs. (E) 82.0) as was UK Industrial Trends (-6% vs. (E) -9%) but neither number is moving markets.
Today the only notable economic report is the Housing Market Index (E: 34) and markets will want to see continued moderation in the data (housing remains a major contributor to high CPI so more progress on that front will be a mild positive).
What’s in Today’s Report:
Futures are sharply lower on momentum from Thursday’s selling as investors further digest the hawkish ECB decision and yesterday’s lackluster economic data.
Despite weaker stock prices this morning, economic data overnight was mildly encouraging. EU and UK December flash PMIs both slightly beat estimates while the EU HICP wasn’t any worse than feared at 10.1% y/y.
Today there are two important economic reports, the Flash Manufacturing PMI (E: 47.7) and Flash Services PMI (E: 46.5) and markets will need to see those data points show 1) Resilient activity and 2) Declining price pressures (more dis-inflation) if they are going to help stocks stabilize. We also get one Fed speaker, Daly (12:00 p.m. ET), but she shouldn’t move markets.
Finally, today is a Quadruple Witching options expiration and it could cause some intense volatility as many traders had been positioned for a year-end rally, and as those hopes are being dashed, some book-squaring is likely in order. Point being, don’t be surprised by an uptick in volatility this afternoon and into the close.