Why High Yields Haven’t Caused a Bigger Pullback (Yet)

/in , /by

What’s in Today’s Report:

  • Why High Yields Haven’t Caused a Bigger Pullback (Yet)
  • Weekly Market Preview: Geopolitics and Fed in Focus (How many rate hikes?)
  • Weekly Economic Cheat Sheet: Can We Get More Goldilocks Data?

Futures are slightly lower following mixed geopolitical news over the weekend.

Starting with the geopolitical positives, there were reports that oil exports from the Middle East surpassed pre-war levels. Negatively, there was another unconfirmed attack on the Saudi East-West pipeline and increased fighting between Saudi Arabia and the Houthis. The net result is Brent Crude is modestly higher (up less than 1%).

Economically, the composite PMIs were solid as the EU PMI met expectations while the UK reading beat (52.0 vs. (E) 51.7.)

Today we get the final of the “Big Three” monthly economic reports via the ISM Services Index (E: 55.0) and the price index here will be key. The smaller the increase (or larger the decrease), the better for stocks as it pushes back on inflation concerns (and should push yields lower).

 

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