Manufacturing PMIs, Fed Speakers

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Dec. 2. Welcome to a new month. The final month of 2024. The Bottom Line segment of today’s podcast starts at 3:56, followed by Stocks on the Contrarian Radar©️ featuring POR 0.00%↑ for listeners who want to skip ahead.

The monthly portfolio report is live here, fresh off the press (published last night).

State of Play

As we eye our board of indicators for signs of direction at 0700, things are pretty quiet. Perhaps eerily so:

• Stock index futures are flat as a board with no major US benchmark moving more than 0.1% from the break-even point;

• Cryptos are dropping a bit with Bitcoin down 2% to trade around $95,000;

• Commodities aren’t doing much with WTI crude oil up 1% to trade close to $69/barrel and copper unchanged. Natural gas prices are dropping almost 6% but nat gas tends to do its own thing;

• Bonds aren’t doing anything at all. The 2-year yields 4.19% whilst the 10-year yields 4.21% so the 2/10 yield curve is moving toward inversion territory once more.

Today’s Known Events

Fed speakers are probably the most anticipated events of the day:

• Fed Governor Chris Waller is scheduled to speak at 1515 at the American Institute for Economic Research Monetary Conference. That will be broadcast live on the AIER website;

• New York Fed President John Williams is spending the day in Queens, N.Y. (incidentally where this briefing is written and podcast recorded, at least most days, today included) and speaking at the Queens Chamber of Commerce at 1630.

Both Waller and Williams are full-fledged FOMC voting members this year. The Fed has all but announced it will continue to cut interest rates slowly. The next FOMC meeting is on Dec. 18. Fed Fund Futures are pricing in a 65% chance of another 25bps rate cut.

ISM Manufacturing PMIs are out at 1000. There’s only one of these each month. None of this flash report stuff. Economist who were surveyed expect, on average, a reading of 47.7. That’s an improvement over the 46.5 recorded last month but still short of the 50 line that separates expansion from contraction.

Construction spending is out at the same time as PMIs. The expectation here is for an increase of 0.2% month-over-month, an improvement over the 0.1% recorded last month.