Market Movements: Earnings Season Insights and Economic Indicators

Let's get to the big story breakdown.

We are looking at US stock futures flat, but Wall Street rallied as the trading week kicked off.

Now global markets saw the rockiest stretch since April this month, and this did come on the heels of trade uncertainty between the US and China, as well as concerns about regional banks.

Now as we head into the rest of this week, we will be getting CPI figures and for now, the government shutdown does continue.

So joining me to simplify what's actually behind the major market moves.

Michael Reinking, senior market strategist at the New York Stock Exchange.

Good morning, Michael.

Thank you so much for joining me.

I don't know about simplifying it, but we'll try.

Thanks for having me.

Well, of course, Michael, and always great to have you on the show.

So there's a lot going on beneath the surface even though stock futures are flat.

So what are you paying attention to right now and what is actually moving the market?

Yes, so I mean right now we're in the first really busy day of earnings, right?

So that is where the focus is going to shift, especially as you know, we're in this government shutdown.

We're not really seeing the economic data that we've talked about for the last couple of weeks, the growing importance of earnings, not only to see how corporate America is performing, right, but to also kind of get some macro reads in terms of how the overarching kind of environment is looking.

This morning's numbers, I would say are largely positive, right?

There are multiple companies, especially in the industrial sector with revenue beats, you know, kind of bottom line beats, you're seeing a little bit of mixed commentary around kind of the margins.

Side of things, but it's, but it's suggesting that you still have this overarching kind of positive economic backdrop of one area that's really stood out and you pointed out the GM numbers this morning right yesterday of Cleveland Cliffs also kind of suggested that the automotive sector was kind of starting to see a turn right so that they know that that's that's been a positive standout and we have kind of Texas Instruments, which is the semi side of that trade, you know, kind of out after the close today.

Yeah, so a lot to keep our eyes on when it comes to earnings, but speaking of macro at the end of this week, we finally get some economic data, and that is the CPI figure ahead of next week's Fed decision.

So what are you looking for from those at this point, you know, markets are looking for something around 0.4% for CPI, which is, you know, pretty much the same level that we were at last quarter or last month.

I think the Fed is very much focused on the growth side of the equation at this point, right, the labor market side of that equation.

I think it would take a very, very hot number to really derail the Federal Reserve from moving next week, you know, kind of given the commentary that we've heard from.

Chair Powell and the rest of the multiple other members of the committee over the last couple of weeks they've signaled that they're going to continue to continue cutting rates at upcoming meetings.

I think it would take a really, really hot number to kind of derail that and of course we're looking ahead to that Fed rate decision next week, but of course in the meantime we're looking at interesting.

Levels when we're talking about the tenure as well as gold as well as other assets.

So what's actually happening here, especially as we're seeing this divergence when it comes to crypto and gold.

Yeah, so yeah, we're at this really kind of interesting point last week really kind of started the previous Friday when we had the trade escalation, trade tension escalation with China. you know, you really started to see volatility begin to move higher and that and that kind of sent some shock waves through the market.

So like last week we were after a very prolonged period of kind of a pretty low volatility environment, so multiple days where the S&P 500 traded within like 2% ranges, right?

So we're in this kind of a little bit of a transitional period now as you pointed out, of crypto, which has been a leading indicator at many different points of the cycle. has been pretty weak, right?

And so we had that Friday evening we had that mini little flash crash you know kind of in crypto last Friday we started to Thursday into Friday we started to see kind of Bitcoin breaking some key technical levels breaking below 110.

Then the recent lows around 107.

Now on Friday morning in the overnight, we traded down to the 200 day moving average and we had this reflexive bounce, but that bounce once again kind of failed right.

Around that 110 111 level, right, so you really need to see kind of Bitcoin kind of get above that level to get a little bit more constructive there and then really watching that 200 day, you know, the equity market where we had this, you know, kind of strong reflexive bounce after volatility kind of picked up kind of yesterday and so you had this strong reflexive bounce.

So now we're like for the S&P, you're within 1520 points of the all-time close.

High right so that's kind of the level to watch on the upside, I think the real, really important level is 65 50%, which is about 3 or 4% to the downside.

That level got tested a couple times over the last two weeks.

That's right around the 50 day moving average, right?

And if we were to break below that level, that's where we could start to see things get a little more dynamic.

And Michael, less than 60 seconds here, but what can we actually expect from that APEC summit?

Look, so I mean I think you know we're you know Treasury Secretary Besson has suggested that we're going to have, you know, kind of multiple kind of trade deals announced over the next couple of weeks, right, so that's kind of we're looking at kind of South Korea and India as kind of as the two that you would expect some positive developments we've heard, you know, kind of leadership on both sides suggest things are moving in the right direction right now that clearly the the kind of the big question is what happens with the you know kind of the President Trump and President Xi meeting.

Um, you know, and that's, you know, kind of clearly a moving target, right?

And so we saw kind of a kind of very sharp reaction to the rare earths, you know, kind of export controls that were put in place or ramped up.

China sort of suggested that we're overreacting to some of the language there, but we've seen kind of both sides kind of take down, turn down the volume a little bit over the last week, right, we got a positive.

Read out of the meeting that happened on Friday evening, right?

So and you know the both sides are expected to meet back half of this week in Malaysia.

So we'll have to see kind of where that kind of comes out.

It does seem like we're trying to tone that down and hopefully that will kind of lead to kind of better, better outcomes down the road.

Well, Michael, as always, thank you so much for joining me and thank you so much for breaking down what's making headlines.

A it.

Thank you so much, Michael.