What Can Take Stocks Sustainably Higher?

What’s in Today’s Report:

  • What Can Take Stocks Sustainably Higher?
  • Weekly Market Preview:  Does Fed Commentary Get Less Hawkish?
  • Weekly Economic Cheat Sheet:  Jobs Report Friday

Futures are slightly lower as markets digest last week’s big rally and following generally disappointing European economic data.

Data from Europe underwhelmed as German Retail Sales plunged –9.8% vs. (E) 7.5%, the biggest annual drop in 40 years.

The July EU and UK manufacturing PMIs were in-line with low expectations (Euro Zone manufacturing PMI 49.8 vs. (E) 49.6 and UK manufacturing PMI 52.1 vs. (E) 52.2.)

Today focus will be on the ISM Manufacturing PMI (E: 52.2) and markets will want to see a moderation in the data – a decline to show economic momentum is cooling, but no sudden drop.  Practically speaking, if the ISM PMI drops to or below 50, that might scare markets that the economy is slowing too quickly.