Fed Chair Powell gives a keynote address to the Brookings Institution @ 1:30pm ET.  Markets will be evaluating Powell’s tone (i.e., how hawkish?) before tomorrow’s PCE inflation data.  FedWatch is currently pricing a 70% chance of a 50-basis point rate hike in December.  Powell’s speech could challenge current market speculation that the Fed will soon slow rate hikes.

Jobs data will play a key role in the Fed’s decision.  The ADP November employment report is released @ 8:15am and October JOLTS job openings @ 10:00am ET.  The November jobs report will be released this Friday.

China posted weaker than expected factory activity; the lowest in 7 months.  The slowdown was caused by Covid lockdowns.  The PMI data is adding to speculation China will ease on their strict Covid policies.

Biogen (BIIB) is up over 2% premarket after unveiling promising late-stage trial data of their Alzheimer’s treatment lecanemab.  Data shows a success rate between 23% and 37% in slowing cognition and daily function decline.  Side-effects are high however and noted in 13% of the participants, including 2 fatalities linked to micro-hemorrhages.  The Alzheimer’s Association has asked the FDA to approve the treatment.

Hewlett Packard Enterprise (HPE) is up 3.5% premarket after posting stronger than expected earnings and issuing an upbeat forecast.  HPE was the service-focused division of Hewlett Packard that was spun off in 2015.  The company claims to now have a right-sized cost structure and substantial order book which will increase recurring revenues at higher margins.

Earnings for Wednesday include Donaldson (DCI), Five Below (FIVE), Frontline (FRO), Hormel Foods (HRL), La-Z-Boy (LZB), Nutanix (NTNX), Okta (OKTA), Petco Health and Wellness (WOOF), Pure Storage (PSTG), PVH (PVH), Royal Bank of Canada (RY), Salesforce (CRM), Snowflake (SNOW), Splunk (SPLK), Synopsys (SNPS), Titan Machinery (TITN), and Victoria’s Secret (VSCO).

The economic calendar is overloaded.  In addition to the ADP and JOLTS data, the calendar includes GDP, Goods Trade Balance and Wholesale Inventories @ 8:30am ET, Chicago PMI @ 9:45am ET, Pending Home Sales @ 10:00am ET, Oil @ 10:30am ET, and Beige Book @ 2:00pm ET.  Before Powell’s 1:30pm ET speech, Fed Governor Lisa Cook gives a talk on monetary policy and the economy starting @ 12:35pm ET.

Volatility seems to be settling in with an average daily range of the ES around 50 points.  Today’s Fed and economic data reactions could certainly increase volatility for today.

No Whale bias as large trader overnight activity was too light to be significant.

As global central banks raise and lower (as the case with Turkey) interest rates, global currencies are taking a wild ride.  While American tourist are enjoying the strong dollar, retirement accounts, institutional portfolios, corporate earnings, and crypto holds are feeling pain caused by the currency movements.

Strong tech companies are feeling pain.  Nvidia is down 57% YTD, AMD is down 52% YTD, and Amazon is down 32% YTD, all primarily due to interest rates and the currency markets.

It’s rare times when a premier company like FedEx misses earnings by $2 and announces cost cuts of $3 billion.  Nike (NKE) posts earnings on Thursday and given they are a global company like FedEx, currencies will likely negatively impact the current and foreseeable future earnings.

The pound has hit a historic low of 1.0327 after release of last week’s new Conservative government ‘mini-budget’ and the euro has hit a 20-yuear low of 0.9689 against the dollar.

Oil prices continue to weaken as $100/barrel seems far in the rear-view mirror as prices return to Jan 2022 prices.  WTI for November hit $78.49/barrel while Brent contracts are trading around $85.50.

There are no corporate earnings of note for Monday.

The economic calendar is light with Chicago Fed @ 8:30am ET and Dallas Fed @ 10:30am ET.  Boston Fed President Susan Collins speaks @ 10:00am ET.

Volatility remains high.

No Whale bias as large traders leaned bearish overnight but not with enough volume to be significant.

Fed Chair Jerome Powell reinforced Fed’s James Bullard’s remarks that trade wars with China, Mexico, and the EU put a dark cloud over the US economy.  Powell said yesterday “as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”  Fedwatch now places the probability of a interest rate decrease at 53% for July.

Presidential candidate Sen. Bernie Sanders will be crashing Walmart’s annual meeting at the invitation of WalMart workers.  He expected to push Walmart to raise wages higher than the $11/hour minimum wage.

Earnings today include FIVE, AEO, GILL, CPB, CLDR, SFIX, MDB, and UNFI.  The economic calendar is full with focus on the 8:15am EST ADP and 10:00am EST ISM Non-Manufacturing PMI.  Also on the calendar are Final Services PMI @ 9:45am EST, Oil @ 10:30am EST and Beige Book @ 2:00pm EST.

Fed speakers include Vice-Chair Clarida @ 9:45am EST and Bowman @ 10:00am EST.  Volatility is up again due to yesterday’s Fed induced rally.  US stocks had their largest move in over 5 months.  Size bias is long into the US session open.