Valuation Update: Dangers of FOMO (Fear of Missing Out)

What’s in Today’s Report:

  • Valuation Update:  Dangers of FOMO (Fear of Missing Out)

Futures are slightly lower as a potential “stall” in U.S./China trade talks and disappointing data weigh marginally on global stocks.

Chinese economic data was universally disappointing, as Fixed Asset Investment, Retail Sales and Industrial Production all missed estimates.  The soft numbers implied the global economic rebound expected by stocks isn’t a done deal just yet.

Today there are two notable economic reports, Jobless Claims (E: 215K) and PPI (E: 0.3%) and a figurative parade of Fed speakers including (in order of importance):  Powell (10:00 a.m. ET), Clarida (9:10 a.m. ET), Evans (9:10 a.m. ET), Daly (11:45 a.m. ET), Williams (12:00 p.m. ET), Bullard (12:20 p.m. ET).

But, the data points shouldn’t move markets, and neither should any of the Fed speak because Chair Powell spoke yesterday and clearly signaled the Fed is on hold, which is what the market expects and has priced in.

So, we can expect trade commentary and headlines to move markets.  Clearly the market is ignoring the phase one “stall” headlines, otherwise, stocks would be down sharply this morning.  But, headlines worsen and the stall increases the risk of a phase one breakdown, that will hit markets hard.