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Important Technical Levels to Watch

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What’s in Today’s Report:

  • Important Technical Levels to Watch

Futures are modestly lower mostly on momentum from Thursday’s declines and after hopes for the government to reopen today faded overnight.

There were hopes late Thursday that the government could reopen today and there may be a vote in the Senate, although passage is not expected at this time.

Economically, Chinese exports fell –1.1% vs. (E) 2.9%.

Focus today will be on inflation expectations via the one-year and five-year inflation expectations in the University of Michigan Consumer Sentiment survey and the NY Fed 1-Year Consumer Inflation Expectations (E: 3.4%).  Put simply, the lower these numbers, the better as they will make a December rate cut incrementally more likely.

On the Fed front, there are two speakers today, Jefferson (7:00 a.m. ET) and Miran (3:00 p.m. ET) although they shouldn’t move markets.

 

New Sevens Report Special Report Coming Next Wednesday: How Bad Is the U.S. Debt Situation?

Interest on our next special Report, “How Bad Is the U.S. Debt Situation?” has been high and we are looking forward to its release on Wednesday.

With the SCOTUS IEEPA tariff decision looming, U.S. fiscal problems could be thrust back to the forefront of the markets  and this special report can not only help explain the situation and put it in proper context, but also differentiate you from the competition by showing you’re focused on both the near-term and long-term risks to clients’ wealth.

Like previous Sevens Report Special Reports, this report will both be branded as Sevens Report Research and as a “white labeled” version, allowing you to brand this robust and in-depth report as your own using your firm’s logo and other marketing materials. Both versions are included with a purchase.

 

Is the Ukraine Conflict a Threat to Stocks?

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What’s in Today’s Report:

  • Is Russia/Ukraine a Potential Major Bearish Event? (Good, Bad, and Ugly Scenarios)
  • Chart: S&P 500 Tipping Points to Watch

Stock futures are flat and international markets traded mixed through a quiet night of news however Treasury yields notably continued to grind higher overnight.

Economically, the January NFIB Small Business Optimism Index fell to 97.1 vs. (E) 97.5 but the release is not materially moving markets this morning.

Looking into today’s session, there is just one lesser followed economic report due out: International Trade in Goods (E: -$83.0B), which should not have a major impact on trading, while no Fed officials are scheduled to speak.

Earnings season is already beginning to wind down but a few notable releases today include: PFE ($0.85), BP ($1.18), and PTON (-$1.18).

Bottom line, investors are continuing to digest last week’s jobs print and looking ahead to the CPI report on Thursday as the main driver of the market remains central bank policy expectations. There is a 3-Yr Treasury Note auction at 1:00 p.m. ET today and with an otherwise quiet calendar the results could move markets (strong auction = dovish, stocks can rebound; weak auction = hawkish, volatility likely to rise).

Technical Update (Levels to Watch)

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What’s in Today’s Report:

  • Technical Update – Levels to Watch

Futures are moderately higher on momentum from Thursday’s rebound combined with a drop in industrial metals’ prices, which is helping to ease some anxiety on inflation.

Iron ore prices dropped sharply overnight as Chinese officials stated they would take measures to curb price increases in various industrial metals and that headline is pushing back on the “surging inflation” narrative (although it doesn’t change the inflation outlook).

There was no notable economic data overnight nor any important central bank speak (outside of the China metals news it was a quiet night).

Today we get several notable economic reports including Retail Sales (E: 1.0%), Industrial Production (E: 1.2%), and Consumer Sentiment (E: 90.3).  In general, the stronger the better for these reports but we’ll be watching the inflation expectations component of the Consumer Sentiment Index – if it runs “hot” expect a headwind on stocks.  There’s also one Fed speaker, Kaplan (1:00 p.m. ET), but he shouldn’t move markets.