Stock futures remained relatively stable, waiting for the FOMC minutes from the Federal Reserve’s latest policy meeting, hoping for clues about a potential interest rate cut. However, the day’s most significant release in the U.S. was a set of revisions to job figures for the year through March, which could reveal the loss of up to a million positions. This report is expected to heavily influence the tone of Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium, potentially impacting market sentiment and future economic policies.

European stock markets saw a cautious rebound after ending a long winning streak the previous day. In the U.K., public sector net borrowing increased to £3.1 billion ($4.037 billion) in July, a significant rise of £1.8 billion compared to the same month last year, according to the Office for National Statistics. Alex Kerr, a U.K. economist at Capital Economics, noted that this increase “continued the recent run of bad news on the fiscal position,” highlighting ongoing concerns about the country’s financial health.

In July, Japan experienced a notable increase in trade activity, with exports rising by 10.3% year-on-year and imports growing by 16.6%. These figures fell short of expectations, which had forecasted an 11.4% rise in exports and a 14.9% growth in imports. This period marked the final month of trade data before the Bank of Japan’s decision to raise interest rates at the end of July, a move that significantly strengthened the yen.

Economic Calendar

Earnings Calendar

Notable reports for Tuesday before the bell include ADI, DY, M, TGT, & TJX. After the bell include A, NDSN, SNOW, SQM, SNPS, URBN, WOLF, & ZM.

News & Technicals’

Target surpassed Wall Street’s earnings and revenue expectations, driven by increased shopper visits to both its physical stores and website. The retailer saw a boost in sales of discretionary items such as clothing. Despite this positive performance, Target adopted a cautious outlook, forecasting that comparable sales for the full year would fall within the lower range of its guidance. This tempered optimism reflects the company’s awareness of potential economic uncertainties ahead.

China’s steel rebar prices have dropped over 20% year-to-date, now standing at 3,208 Chinese yuan ($450) per ton, according to data from financial information provider Wind. This decline reflects a broader trend of disappointing demand for metals in China, as noted by Sarbin Chowdhury, head of commodities analysis at BMI. Additionally, the price of iron ore, a crucial material for steel production, has plummeted by more than 28% so far this year, based on FactSet data. These trends highlight significant challenges in the Chinese metals market.

A federal judge in Texas has struck down a Biden administration rule that aimed to ban worker noncompete agreements. On Tuesday, the judge barred the U.S. Federal Trade Commission’s rule from taking effect, which would have prohibited agreements preventing workers from joining their employers’ rivals or starting competing businesses. In her ruling, Judge Brown stated that even if the FTC had the authority to implement such a rule, the agency had not sufficiently justified the need to ban nearly all noncompete agreements. This decision marks a significant setback for the administration’s efforts to regulate employment practices.

On Wednesday, Ukraine launched one of its largest-ever drone attacks against Moscow, marking a significant escalation in the conflict. Moscow Mayor Sergei Sobyanin confirmed the scale of the attack in a Google-translated Telegram post, stating, “This is one of the largest attempts to attack Moscow with drones ever. We continue to monitor the situation.” The drone offensive coincided with Russian President Vladimir Putin’s first visit to Chechnya in 13 years, where he inspected local troops and volunteers preparing to join the war effort. This timing underscores the heightened tensions and ongoing strategic maneuvers in the region.

Although there is an anticipation for the FOMC minutes this afternoon keep a close eye out for the BLS revisions at 10AM Eastern today.  According to Goldman and Wells Fargo we could see 600,000 to 1 million jobs suddenly vanish in the report.  The majority of traders could be caught off guard creating the possibility of a big reversal depending on the report results.  It may turn out to be a nonevent but its better to be prepared. 

Trade Wisely,

Doug