Good Wednesday morning-Hump Day is here-Markets are in a good, Risk On mood to begin today as we await FOMC Mins, then tomorrow's ECB minutes, then central bankers gather at Jackson Hole with focus on Friday's speech by Powell, which then is followed over the weekend with G-7 leaders meeting in France: So the hope for monetary stimulus by central bankers (Trump reiterated his call for 'big' cuts from the Fed, they must be 'proactive'), at a minimum cuts in September by the Fed and ECB (could also restart QE), and maybe some fiscal stimulus as Germany talking lately about preparing a package if needed and yesterday Trump was talking about payroll and capital gains cuts. Only time will tell !
Today: FOMC Mins (Meeting was before market gyrations, new tariffs & with Powell speaking in same week this should have a short life, decreased market impact-market will look at hints on how divided Fed was since 2 dissents, mid-cycle mindset , what will trigger more than 25bp cut), Existing home sales; Target, RBC and Lowe's report !!
We begin with stocks in Asia mixed ! European stocks are positive, most up 1% or more, and US futures are positive, with Dow +150 area ! VIX 16.5 area ! Treasury yields rising after dropping 4-6bp yesterday: 2yr 1.535%/10yr 1.58%/30yr 2.06% ! Oil is rising to $56.70 ! Gold falling to $1,500-1,501 ! USD barely changed ! LIBOR 1mo fell to new low, 3mo fell slightly, while 6mo to 1yr rose a smidgen.
- Earnings: Target beat: $1.82 vs 1..62, FY $5.90-6.20 up from $5.75-6.05, Q2 sales +3.4% vs 3%, sales $18.42b vs $18.25, shares hit record levels !! Lowe's beats: $2.15 vs $2.01, same-store sales +2.3% vs 1.7% ! RBC misses: $2.26 vs $2.30 !
- German auctioned off 30yr bonds, but saw weak demand, as it was a 0%
coupon (if looked at a technical failed auction as EU824mm vs EU2b) - Trump canceled his state visit to Denmark after they rejected and called his bid to buy Greenland 'absurd'- Officials call his behavior
'hopeless...deeply insulting". Yesterday he said he isn't ready to make a deal with China on trade. - Fed's Daly: Later yesterday said she doesn't see a U.S recession on
horizon ! "When I look at the data coming in, I see solid domestic momentum
that points to a continued economic expansion," citing data on labor markets
and consumer spending. "But considerable headwinds, like weaker global growth
and trade uncertainties, have emerged -- and they're contributing to this fear we see in the markets that a downturn is right around the corner," she said. "So one thing I'm looking closely at is whether the mood gets so out of
sync with the data that the fear of recession becomes a self-fulfilling
prophecy."