Is This Your Homework Larry?
There's not much on the data docket in the US for the holiday-shortened week. Sparse releases include factory orders, ISM services and consumer credit.
The update on services sector activity has market-moving potential if mostly in the context of last week's data, which uniformly suggested the world's largest economy is cooling. At least around the edges.
An ISM services miss would cement that narrative and bleed some of what's left from the rate hike premium priced through the November FOMC
Sentiment is so negative on China’s economy, with obituaries being published right and left, that I’m thinking it’s time for some positive surprises there. Which won’t solve Xi’s structural problem but that’s a long term story, yawn.
The apparent bottoming out of US manufacturing ISM is exciting, and seems – preliminary read only – to be reflected in stock action in some industrials and transports.
Inflation at 4% looks good for stocks. Equity investors care about nominal growth, and 4% inflation + 2% real GDP = 6% nominal growth.