The Delta Variant and Markets

What’s in Today’s Report:

  • Is the Delta Variant Impacting the Markets?
  • Retail Sales and Industrial Production Takeaways
  • Chart: Value Outperforming Growth In August

Stock futures are slightly lower as investors digest dovish central bank developments, mixed inflation data out of Europe and look ahead to the release of the Fed minutes.

The Reserve Bank of New Zealand unexpectedly left rates unchanged at 0.25% (E: 0.50%) citing COVID-19 uncertainties which crashed the kiwi to a fresh 9-month low overnight.

Economically, Eurozone HICP met estimates however U.K. PPI ran slightly hot versus expectations while revisions were to the upside which is keeping inflation concerns elevated for now.

Looking into today’s session, it should be a fairly slow morning as far as news flow goes with just one economic report to watch: Housing Starts (E: 1.61M) and no Fed officials scheduled to speak.

Then in the afternoon investors will be watching a 20 Year T-Note auction at 1:00 p.m. ET before the FOMC Meeting Minutes are released at 2:00 p.m. ET. Yesterday, there was a reversal higher in yields from overnight lows in the wake of the not-as-bad-as-feared Retail Sales report so the risk appears to be to the upside for yields which could weigh on big-cap growth names and drag major indexes lower if a rise in yields gains momentum.