This morning the S&P 500 futures are bearish because of anticipated weak data from weekly jobless claims. We think this could be the stop of the bullish trend and the start of a ranging market.
Yesterday, The market overlooked much stronger than expected data on retail sales, industrial production, and PPI, as well as a very poor 20-year auction. The FOMC minutes supported the general outlook that the Fed will remain in ultra-accommodative mode while looking through any spikes in inflation.
Wall Street was mixed with the Dow posting a 0.29% gain, though it was enough for a third straight historic peak at 31,613. Further gains in energy supported. The NASDAQ underperformed, falling -0.58% on tech weakness, while the S&P 500 slipped slightly.
Treasury yields dipped slightly recovering a small part of the year’s selloff. The long bond finished at 2.05% with the 10-year at 1.28%. Rates dropped after hitting some of their highest levels in a year on Tuesday at 2.09% and 1.316%, respectively.
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Key Market Events:
- U.S. calendar has housing starts, weekly jobless claims, Feb Philly Fed index
- Canada data calendar empty; Dec retail sales due Friday
- Dollar settled, yen crosses down; stocks rally falters, but commodities hit new highs
- Bitcoin rallied to fresh record, this time above $52,500
- Gilts lead further rise in yields, stock rally continues to stall
- Australia unemployment dropped more than anticipated in Jan
Today’s calendar is again busy and features January housing starts, expected to dip to a 1.600 mln pace from 1.669 mln previously. Weekly jobless claims should see initial claims drop 33k to 760k, while continuing claims are expected at 4.350 mln from 4.545 mln.
The February Philly Fed index is penciled in dipping to 20.0 from 26.5. January import and export prices should see the former jump 1.1% from 0.9% previously, and the latter increase 1.0% from 1.1% in December. Weekly oil inventory figures are also on tap.
The Treasury sells $9 bln in 30-year TIPS and announces 2-, 5-, and 7-year notes. Fedspeak has Bostic on deck. The earnings calendar features reports from Walmart, RBC, Applied Materials, Southern Company, Roku, Waste Management, Newmont, Marriot, TC Energy, Barrick Gold, ViacomCBS, Hormel Foods, ConEd, and Arista Networks.