Why A Hawkish Fed Isn’t Necessarily Bad for Markets

What’s in Today’s Report:

• Why A Hawkish Fed Isn’t Necessarily Bad for Markets
• Weekly Market Preview: Is Economic Growth Stable? (It Needs to Be)
• Weekly Economic Cheat Sheet: The “Big Three” Monthly Reports This Week (including the Jobs Report)

Futures are marginally lower after the U.S. and Iran traded attacks for the first time in weeks.

The U.S. and Iran traded strikes over the weekend in the first military exchange in weeks and oil prices are 3% higher in response, although markets still do not expect material escalation (which is why futures aren’t down more).

Economically, Chinese data was mixed as the manufacturing PMI beat estimates (49.8 vs. (E) 49.5) while non-manufacturing was slightly weak (49 vs. (E) 49.4).

Today there are no notable economic reports or Fed speak so focus will remain on geopolitics.  Markets still strongly assume there won’t be any material military escalation between Iran and the U.S. but if the headlines turn negative on that front, it’ll introduce a new headwind on the market.