Tuesday, September 6, 2022
We begin a holiday-shortened trading week in the green, following three weeks of losses across the major indices. The tech-heavy Nasdaq looks to break its string of six straight down days — it’s longest such negative period in three years. Currently, the Dow is +180 points at this hour, the S&P 500 is +25 and the Nasdaq is +80. Though we were up to start the trading day last Friday, too, only to see those gains fizzle by the start of the three-day weekend.
The Dow closed at a seven-week low Friday, and are now down -15% from 52-week highs (obtained in the very first trading sessions of 2022). The S&P is -18% from those highs (achieved in the same time period) while the Nasdaq is -28% from its highs (from November of last year: pre-Omicron variant).
This is going to be a quiet week overall, in terms of earnings reports and economic prints, with the possible exception of addresses from Fed members ahead of their “blackout period” directly prior to the next Fed meeting on monetary policy in a couple weeks. But we don’t anticipate any bombshells from Fed Chair Jay Powell, Vice Chair Lael Brainard and the various governors speaking this week: the next time we get any potential Fed-altering data is in August’s CPI report, which doesn’t come out until a week from tomorrow.
Thus, expect the table to be set for a 75 basis-point hike on the 21st day of September (cue Earth, Wind and Fire), which would bring the Fed funds rate to an even 3% — from 0% just six months ago. Thus far, Fed monetary policy has had the desired effect: we see virtually all economic metrics rolling back from multi-year/decade highs, while employment has remained healthy, as can be seen in last Friday’s Employment Report. But as we’ve discussed in this space previously, whether or not the Fed goes to 3% this month is less important than when the Fed stops raising, and this nobody yet knows.
After today’s opening bell, we’ll get August reads for PMI and ISM Services. These follow last week’s PMI and ISM Manufacturing reports, which were modestly favorable — flat to up, depending on the metric. PMI Services last month fell to 44.1, by far the lowest print since the depths of the initial Covid wave, while ISM Services is expected to dip a tad from the 56.7% rebound reported a month ago.
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Image: Bigstock
Pre-Markets Set Up Trading Day in the Green
Tuesday, September 6, 2022
We begin a holiday-shortened trading week in the green, following three weeks of losses across the major indices. The tech-heavy Nasdaq looks to break its string of six straight down days — it’s longest such negative period in three years. Currently, the Dow is +180 points at this hour, the S&P 500 is +25 and the Nasdaq is +80. Though we were up to start the trading day last Friday, too, only to see those gains fizzle by the start of the three-day weekend.
The Dow closed at a seven-week low Friday, and are now down -15% from 52-week highs (obtained in the very first trading sessions of 2022). The S&P is -18% from those highs (achieved in the same time period) while the Nasdaq is -28% from its highs (from November of last year: pre-Omicron variant).
This is going to be a quiet week overall, in terms of earnings reports and economic prints, with the possible exception of addresses from Fed members ahead of their “blackout period” directly prior to the next Fed meeting on monetary policy in a couple weeks. But we don’t anticipate any bombshells from Fed Chair Jay Powell, Vice Chair Lael Brainard and the various governors speaking this week: the next time we get any potential Fed-altering data is in August’s CPI report, which doesn’t come out until a week from tomorrow.
Thus, expect the table to be set for a 75 basis-point hike on the 21st day of September (cue Earth, Wind and Fire), which would bring the Fed funds rate to an even 3% — from 0% just six months ago. Thus far, Fed monetary policy has had the desired effect: we see virtually all economic metrics rolling back from multi-year/decade highs, while employment has remained healthy, as can be seen in last Friday’s Employment Report. But as we’ve discussed in this space previously, whether or not the Fed goes to 3% this month is less important than when the Fed stops raising, and this nobody yet knows.
After today’s opening bell, we’ll get August reads for PMI and ISM Services. These follow last week’s PMI and ISM Manufacturing reports, which were modestly favorable — flat to up, depending on the metric. PMI Services last month fell to 44.1, by far the lowest print since the depths of the initial Covid wave, while ISM Services is expected to dip a tad from the 56.7% rebound reported a month ago.
Questions or comments about this article and/or its author? Click here>>