What’s in Today’s Report:
- Why Is Consumer Spending Holding Up So Well?
- Unemployment Rate Chart Indicates Full Employment
- May Flash PMI Takeaways
- Chart: S&P 500 Trend Remains Higher But Signs of Weakness Are Emerging
Equity futures are lower with global markets this morning as there has been no further progress in debt ceiling negotiations while data overnight pointed to stagflation.
Economically, U.K. CPI was 8.7% vs. (E) 8.3% y/y while the German Ifo Survey was weak across the board with Business Expectations notably falling to 88.6 vs. (E) 91.7. And sticky high inflation and fading growth prospects are a very negative scenario for global risk assets.
There are no market moving economic reports on the calendar for today which will leave traders primarily focused on the ongoing debt ceiling negotiations.
There is one Fed speaker: Waller at 12:10 p.m. ET and the May FOMC meeting minutes will be released at 2:00 p.m. ET which could shed some light on the Fed’s expected “pause.” Any indication that hikes may continue this summer would trigger volatility as current market odds of a June hike are less than 1 in 3.
Finally, there is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and have an influence on equity market trading in the afternoon.