After plunging during Powell’s presser yesterday, S&P 500 futures have staged a modest rebound; they’re currently trading consistent with a 20 bps gain versus yesterday’s close. The dollar is now trading at 7-month highs after the Bloomberg USD Index gained 44 bps yesterday. Since June 25th lows, the buck has gained consistently but the total advance is only 2.2%, so it’s hard to argue things are getting out of hand.
One of the harder-hit areas by the more hawkish (relative to expectations) Fed yesterday is commodities where WTI is down 1.3%, gold is down 1.6%, and copper is down 63 bps versus yesterday’s pre-Fed levels. For their part, yield curves are higher this morning, with 2s5s steepening but 5s10s or 5s30s flattening as the belly of the curve gets the worst of traders’ reassessment about the path of FOMC policy through the rest of the year and into 2020.
PMIs overnight were generally weaker sequentially (discussed in greater detail in today’s report), but a number beat expectations. Finally, earnings are generally positive in the US and Europe this morning, with US names like GM, Cigna, Verizon, Shopify, Yum! Brands, and Wayfair all reporting big beats of one kind or another.
Continue reading in today’s Morning Lineup.