Action-Packed Week Ahead

Look for a hawkish Powell and subpar payrolls

Highlights

• Busy week ahead for investors

• Powell’s testimony and employment data top the list of events

• The S&P 500 climbs higher but profit estimates are being cut

• Housing demand collapses while rent deflation continues

While We Were Sleeping

U.S. equity futures are in the red, but this has proven to have been a very poor indicator in recent times — more often than not we have been closing the session higher. Besides, European markets have advanced +0.2% and Asia turned in gains across the board: Taiwan (+2.0%), Korea (+1.2%), Japan’s Nikkei 225 (+0.5%; the Nikkei breaking 40,000 for the first time, and our favorite global market is now up a ripping +19% so far this year after the +28% surge in 2023), China’s Shanghai Composite (+0.4%; even though signs are emerging that Xi Jinping will not be unveiling a bold stimulus package at this week’s National People’s Congress), and India (+0.1%) while Hong Kong’s Hang Seng was flat.

The S&P 500 has advanced in 16 of the past 18 weeks, something that has not happened since 1971, so it surely could be forgiven for pressing the pause button. Bond yields are slightly down across the Atlantic, and by a nice -4 basis points in Australia to 4.10%, but no such luck in the Treasury market where the 10-year rate has popped +3 basis points to 4.21% (reversing part of Friday’s -6 basis point decline).

The FX market is quiet, with the DXY dollar index unchanged at 103.9 (market quotes are time-stamped at 4:15 a.m. EST). The Bitcoin mania was extended into the Monday trade, topping $65,000 (+4% so far today) and well on its way for the test of the 2021 high of $69,000.