Monday, August 15, 2016
We’ve now begun to enter the post-Q2 earnings season, meaning a slowdown in market volume between now and the Labor Day holiday is expected. Here in the U.S., positive job growth and low interest rates have set the table for all-time highs on our major indexes, with futures higher ahead of the bell today to start the week.
Even global economic data has gotten sleepy lately, which comes as welcome news following Eurozone drama over the past couple years — from Greece to Brexit — as well as major developments in China that had a lasting, immediate effect on global markets. Recall it was just about a year ago when China devalued the yuan and sent markets in the U.S. and elsewhere into a latter-half 2015 into a tailspin.
We’re not seeing anything on the horizon this dramatic today, although questions of U.S. labor market productivity has begun to raise some concerns. With jobs increasing to near “full-employment” levels, we’ve begun to see a drop-off in productivity numbers, which looks to be the only real domestic headwind for the markets as of now.
To with, this morning we saw a big miss in Empire State Index numbers this morning, which tracks business growth in New York state. The read swung to a loss for the fourth time this year so far to -4.21% versus a barely positive +0.55% in July. Even worse, analysts’ expectations had been for roughly a +5% read in August. That said, both orders and shipments improves month over month, so the outlook going forward does not appear as bleak as the headline number.
We expect a read on home building sentiment later this morning, and more housing data later this week. Wednesday we look for the release of the Fed minutes from the latest FOMC meeting, which will give analysts grist for the mill regarding Fed members’ thinking about raising interest rates sometime in the future.
For now, we’re again seeing modest gains in the Dow (+46), Nasdaq (+7.5) and S&P 500 (+4.5) ahead of the market open. Closing in on S&P 2200 looks like all but a done deal at this point, and as long as global developments remain quiet, we see no recourse to change this general outlook.
Mark Vickery
Senior Editor
Image: Bigstock
Dog Days of Summer Not Hitting Market Futures
Monday, August 15, 2016
We’ve now begun to enter the post-Q2 earnings season, meaning a slowdown in market volume between now and the Labor Day holiday is expected. Here in the U.S., positive job growth and low interest rates have set the table for all-time highs on our major indexes, with futures higher ahead of the bell today to start the week.
Even global economic data has gotten sleepy lately, which comes as welcome news following Eurozone drama over the past couple years — from Greece to Brexit — as well as major developments in China that had a lasting, immediate effect on global markets. Recall it was just about a year ago when China devalued the yuan and sent markets in the U.S. and elsewhere into a latter-half 2015 into a tailspin.
We’re not seeing anything on the horizon this dramatic today, although questions of U.S. labor market productivity has begun to raise some concerns. With jobs increasing to near “full-employment” levels, we’ve begun to see a drop-off in productivity numbers, which looks to be the only real domestic headwind for the markets as of now.
To with, this morning we saw a big miss in Empire State Index numbers this morning, which tracks business growth in New York state. The read swung to a loss for the fourth time this year so far to -4.21% versus a barely positive +0.55% in July. Even worse, analysts’ expectations had been for roughly a +5% read in August. That said, both orders and shipments improves month over month, so the outlook going forward does not appear as bleak as the headline number.
We expect a read on home building sentiment later this morning, and more housing data later this week. Wednesday we look for the release of the Fed minutes from the latest FOMC meeting, which will give analysts grist for the mill regarding Fed members’ thinking about raising interest rates sometime in the future.
For now, we’re again seeing modest gains in the Dow (+46), Nasdaq (+7.5) and S&P 500 (+4.5) ahead of the market open. Closing in on S&P 2200 looks like all but a done deal at this point, and as long as global developments remain quiet, we see no recourse to change this general outlook.
Mark Vickery
Senior Editor