Please note that the Morning Minutes will not be published for the rest of this year, it will return on Tuesday, January 3rd, 2023. We wish everyone a happy and safe holiday season.
Although the potential for more tax loss selling this week lingers as a potential headwind for stocks, with the Quadruple Witching mass expiry of futures and options on indices and stocks now in the rear-view mirror, investors seem to be starting to pick up the pieces from last week’s selloff. It remains to be seen if we will get a Santa Claus Rally this year or not.
Although US indexes closed down 0.8%-1.1% on Friday, an afternoon rally helped to offset morning losses. So far today, US index futures are up 0.2%-0.4%, while in Europe the DAX and FTSE are up 0.5%-0.6%. Energy markets are mixed with Natural Gas dropping 6.5%, while WTI Crude Oil is up 0.5. Metals are in the green today with Copper up 0.8%, Platinum up 0.6% and Gold up 0.3%.
For scheduled news this feels like cleanup week ahead of the holidays as a number of items which we would usually expect to be released right at month end, have been moved up to Thursday-Friday. The last two notable earnings reports, Nike and FedEx, are due after the close on Tuesday, and the last two major central bank meetings of the year, China and Japan, are being held overnight tonight.
The economic data calendar for this week is dominated by Canada in the first half with producer prices today (-0.4% vs street 3.0%, retail sales Tuesday and Consumer prices on Wednesday. The focus shifts to the US for the back half of the week headlined by GDP on Thursday and wrapping with Durable Goods Orders, Personal Income/Spending, new home sales, Core PCE inflation and the consumer inflation estimate on Friday.
Next week brings more housing numbers out of the US and the last day of the year features the Chicago PMI reports plus Chinese Manufacturing and Service PMI reports before 2023 kicks off with the usual monthly PMI and employment numbers.
