Inflation has to stop going up. I know that sounds overly simplistic, but the bottom line is that for the past several months, markets and the Fed have seen ‘hints’ of a peak in inflation pressures, yet that wasn’t reality…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower while most global markets rallied overnight as traders continue to monitor the situation in Ukraine and look ahead to the Fed minutes release.
Geopolitically, there were no major developments regarding Ukraine o/n but U.S. officials continue to warn that an invasion is possible at anytime, leaving markets on edge.
Economically, Chinese inflation data came in below estimates while U.K. PPI ran hot but neither release materially moved markets overnight.
Today is lining up to be a fairly busy day from a catalyst standpoint as there are several notable economic reports due out including: Retail Sales (E: 2.0%), Import & Export Prices (E: 1.3%, 0.7%), Industrial Production (E: 0.4%), and Housing Market Index (E: 83).
From there, focus will shift to a 20-Yr Treasury Bond auction at 1:00 p.m. ET and then likely the most important catalyst of the day, the FOMC Minutes will be released at 2:00 p.m. ET.
The market has been very indecisive in recent sessions and that is likely to continue today, however, if the geopolitical backdrop remains largely calm, economic data is favorable, and the FOMC minutes are not interpreted as overly hawkish, we may finally see the market break back to test the February highs.
What’s in Today’s Report:
Easing geopolitical tensions are driving risk on money flows this morning with U.S. stock futures higher by well over 1% while bonds and other safe havens decline.
Multiple news outlets reported overnight that Russian troops completed their drills and were returning to their bases, reducing fears of an imminent invasion of Ukraine.
There were a few economic reports overnight including the U.K. Labour Market report and the German ZEW Survey but both largely met estimates and neither meaningfully moved markets.
Looking into today’s session, there are no Fed speakers or Treasury auctions but there are two notable economic reports to watch: PPI (E: 0.5%, 9.2%) and Empire State Manufacturing Index (E: 10.0).
Bottom line, this is a headline driven market right now and investors will want to see continued de-escalation in the Russia-Ukraine conflict (German Chancellor Scholz meets with Russian President Putin) as well as a PPI print that is not too hot and Empire report that shows growth is not materially slowing for the overnight relief rally to extend higher.
What’s in Today’s Report:
Futures are moderately lower following a quiet weekend of actual news, as futures are being pulled lower by international markets as there was no progress on the Russia/Ukraine standoff.
The Russia/Ukraine situation was unchanged over the weekend and a Russian invasion could occur at any moment and that is acting as a short term headwind on markets.
There was no notable economic or inflation data overnight.
Today Ukraine headlines will drive trading and any headlines that imply the start of a conflict will be a headwind, while any that imply a delay in hostilities will be a tailwind. We also get one Fed speaker, Bullard (8:30 a.m. ET on CNBC) and he obviously moved markets last week with this 50 bps March hike and 100 bps of tightening by June calls, so we’ll be watching closely to see if he further clarifies or doubles down on those comments (any dovish clarification would provide a small tailwind for stocks).
What’s in Today’s Report:
Futures are moderately weaker mostly on momentum from Thursday’s selloff and despite some reassuring commentary from Fed officials overnight.
Fed Presidents Daly and Barkin both pushed back on the idea of a 50 basis point rate hike in March, countering the hawkish commentary from Fed President Bullard.
Economic data was mixed as German CPI met estimates (4.9% y/y) while UK GDP and Industrial Production both slightly missed estimates.
Today there are no notable economic reports and no Fed speakers scheduled, so focus will be on Consumer Sentiment (E: 67.5) and specifically the inflation expectations indices. If one year and five year inflation expectations can decline, that will help ease some inflation concerns and could spark a rebound later this morning.
Inflation has to stop going up. I know that sounds overly simplistic, but the bottom line is that for the past several months, markets and the Fed have seen ‘hints’ of a peak in inflation pressures, yet that wasn’t…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower following Wednesday’s rally and ahead of this morning’s CPI report.
Governments and central banks pushed back a bit overnight on the global hawkish narrative as the European Commission predicted inflation would return to 1.7% yoy in 2023 while the Swedish National Bank was dovish in its commentary (no rate hikes or QT anytime soon).
Economic data was sparse overnight although Chinese money supply did beat estimates, reflecting the continued accommodation in that economy.
Today the key event is the CPI Report (E: 0.5% m/m and 7.3% y/y) and an in-line or smaller than expected increase will likely spur a further rally in stocks as markets try and price in a “not as hawkish as feared” Fed (although we’d be skeptical of that rally – more on that in the Report). We also get Jobless Claims (E: 230K) and one Fed speaker this evening: Barkin at 7:00 p.m. ET.
What’s in Today’s Report:
Stock futures are solidly higher this morning after another mostly quiet night of news as tech shares rise amid falling bond yields ahead of tomorrow’s CPI report.
There were no market-moving economic reports overnight and no data is due to be released in the U.S. today.
With no economic data on the calendar, the focus will be on Fed speakers: Bowman (10:30 a.m. ET) and Mester (12:00 p.m. ET) as well as a 10-Yr Treasury Note auction at 1:00 p.m. ET.
There are also a few notable companies due to release earnings today including: TEVA ($0.70), UBER (-$0.33), and DIS ($0.57).
Bottom line, the market remains keenly focused on inflation right now and with bond yields pulling back from recent highs, stocks are enjoying a renewed relief rally that could extend higher today as long as yields don’t reverse back towards recent highs.
The looming jobs report is a reminder that expectations for Fed policy are the key influence on this market right now…Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter, told Bloomberg. Click here to read the full article.
For stocks to stabilize and rebound, they need one, the Fed to stop providing hawkish surprises. Two, inflation data to peak and recede. And three, economic data to remain firm to…said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
