Why Wasn’t “Bad” Data “Good” for Stocks Yesterday?
What’s in Today’s Report:
- Why Wasn’t “Bad” Data “Good” for Stocks Yesterday?
- JOLTS and Factory Orders Takeaways
Stock futures are modestly lower this morning while short duration yields are on the rise amid some hawkish central bank developments but soft economic data overnight.
Internationally, the Reserve Bank of New Zealand raised rates by 50 bp vs. (E) 25 bp to 5.25% citing inflation that is still too high while RBA Governor Lowe pushed back on hopes that their rate hiking campaign is over. In Europe, the Eurozone Composite PMI fell to 53.7 vs. (E) 54.1.
Today, market focus will remain on economic data with the ADP Employment Report (E: 200K), International Trade in Goods and Services (E: -$68.7B), and ISM Services Index (E: 54.4) all due to be released this morning. Investors will be looking for further signs of moderation in the labor market (but not a collapse) and easing price pressures in the ISM report in order to restore optimism about a soft landing.
Additionally, the Fed’s Mester will speak at 8:30 a.m. ET and her recent comments about Fed funds pushing beyond 5% have contradicted what rates markets are pricing in for this year, so a reiteration of that view could push yields higher and weigh on equities.
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