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MACRO MORNING NOTE| Powell Second Round, S&P Futures Tumble, Yields Fade

SBA’s Alastair Williamson concludes the Macro Morning Note from Baltimore, Maryland

Global stock markets have declined the most since a global rout about three weeks ago following sharp declines in Asia, Europe, and the United States. U.S. Treasury yields have faded from their four-year highs with the UST10Y printing at 2.843. Markets are waiting for Federal Reserve Chairman Jerome Powell’s the second appearance, whose comments earlier this weeks riled markets. He sparked selling in equity markets which were due to Treasury yields surging. Many analysts and even Powell contribute the rise in yields on a healthy economy, but we think that is just plain wrong. The issuance of debt from the government this year is out of control coupled with a weak dollar policy, which has push bond prices lower thus rising yields.

Here are some key events scheduled for this week:

  • Fed’s Powell testifies before the Senate Banking Committee Thursday. Other Fed speakers this week are Bill Dudley
  • Russian President Vladimir Putin is giving a pre-election address in Moscow
  • U.K. Prime Minister Theresa May delivers a speech Friday on Britain’s relationship with the European Union.

Thursday Economic Calendar: 

Earlier this week, China MFG PMI rolled over. Not good for the globalized sync growth narrative…

Japan Industrial Production m/m plummets, most likely due to strong Yen woes.

Atlanta Fed model suggests an economic deceleration in US. SocGen: The Fed Is Wrong, “The Growth Spurt Is Now Behind Us”

 

Q4 GDP Revised Lower To 2.5% Despite Stronger Spending..  This is not a booming economy. What if there is no boom? Natural disaster bump could be over….

Chicago PMI Tumbles To 6-Month Lows. Three Peaks Spotted?

“Pending Home Sales plunged 4.7% in January (massively below the 0.5% expected rise in sales) – this is the biggest drop since May 2010,” said Zero Hedge…

SPX500 overhead supply is building….

Late Cycle Folks…