Time to Get More Defensive?

What’s in Today’s Report:

  • Time to Get More Defensive?

Futures are moderately higher thanks to rising U.S./China trade optimism.

Yesterday’s WSJ article that stated U.S. officials are considering reducing China tariffs spurred a global rally, despite being disputed by administration officials.

Economic data was mildly disappointing as Japanese CPI (0.7% vs. (E) 0.8%) and UK Retail Sales (-0.9% vs. (E) -0.8%) both slightly missed estimates, although neither report is moving markets.

Today there are several earnings reports but none of the companies reporting should move the market unless the results are truly horrid.

Economically, Industrial Production (E: 0.3%) is the key report as we want to see if “hard” manufacturing activity dropped as much as the manufacturing surveys in December.  We also get an update on Consumer Sentiment (E: 97.0) and one Fed speaker, Williams (9:05 a.m. ET), who could help markets rally if he talks more about flexibility on balance sheet reduction.