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A Tale of Three Markets

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What’s in Today’s Report:

  • A Tale of Three Markets

Futures are moderately lower as markets await the next steps in the U.S./Iran ceasefire process while tech earnings underwhelmed overnight.

There was no new U.S./Iran news overnight as markets await the details of the next in-face U.S./Iran talks.

On earnings, IBM (down 7%) and TSLA (down 3%) underwhelmed on earnings and that’s weighing on futures.

Today focus will stay on U.S./Iran and key events now are 1) When the next face to face meeting happens (chatter implies this weekend) and 2) The dual naval blockades of the Strait of Hormuz (any hint they could end would be positive).

Away from the Strait of Hormuz, there are important economic reports today including Jobless Claims (E: 210K), the Flash Manufacturing PMI (E: 52.5) and the Flash Services PMI (E: 50.0) and the stronger the data, the better as it’ll push back on stagflation concerns.

Finally, earnings season continues to heat up and two important reports today are AXP ($4.03) and INTC ($-0.11).

 

Market Multiple Table: Renewed Optimism (Maybe a Little Too Much)

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What’s in Today’s Report:

  • Market Multiple Table: Renewed Optimism (Maybe a Little Too Much)

Futures are modestly lower on digestion of Wednesday’s big rally, as there was no negative news overnight.

Geopolitically, the U.S./Iran ceasefire is holding, for now, despite conflicting reports of violations.  The next key event is Saturday’s first round of negotiations.

Economically, German Industrial Production was slightly weaker than expected (0.0% vs. (E) 0.3% y/y).

Today the primary focus of markets will stay on geopolitics and whether the ceasefire holds.  While there are conflicting headlines, the key remains President Trump.  As long as he doesn’t post that the ceasefire is off, then regardless of other headlines, it’s still on (at least from a market standpoint).

Outside of geopolitics, we do get some notable economic reports including Jobless Claims (E: 213K), Core PCE Price Index (E: 0.3% m/m, 2.9% y/y) and Final Q4 GDP (E: 0.7%).  Of the three, the Core PCE Price Index is the most important but it’s February data (so before the war).  That said, if it’s higher than expected, that will only further increase inflation anxiety (which will be a mild negative on this market).