The market has an interesting way of making the dark moments darker and the bright moments brighter. A few days ago, the soft landing talk was everywhere and then suddenly the reversal yesterday highlighted the multitude of risks around a hard landing, crumbling margins and consumer spending stalling.
Those worries have continued today with S&P 500 futures down 34 points and commodity currencies struggling.
Ultimately, the data will tell the story and we have a trio of releases coming up at the bottom of the hour including:
- Housing starts
- Initial jobless claims
- The Philly Fed
Those aren’t game changers but their solid tier-2 data points. I suspect the market would extrapolate from soft claims data but that would be premature. We also get Canadian wholesale trade.
The Davos agenda features Knot at the top of the hour and the Fed’s Collins is due at the same time. The main event though is at 1:15 pm ET when the Fed’s Brainard speaks. The market will be hoping for a dovish shift.