The U.S. Fed's October meeting was not supposed to have much of an effect on U.S. interest rates. But language hinting at a December hike in the press release set off a swift run in U.S. 10-year Treasury rates. This rate went from 2.05% on Wednesday last week to near 2.17% and rising as of this morning.
Friday's U.S. non-farm payroll data is the next stop on the rate-setting bus line.
The bond market is clearly bracing for a December rate hike.
The U.K.'s monetary policy meeting and rate decision (out on Thursday) should assist the market a little more. Mark Carney may signal he will not raise the U.K.'s monetary policy rate for months. However, there are a number of FOMC members speaking in Washington, New York and across Europe this week. The ECB's Mario Draghi is on tap to speak this week, too.
Do any global stock markets care about the rise in U.S. 10-year Treasury rates?
So far, the answer is NO. Momentum is back on across most major global share indexes. It's a good seasonal time of year for stocks. So they go up, hewing to tradition and little else.
With this week's fundamental news in hand, what looks good for stocks?
In Europe, the manufacturing PMIs show expansion. In light of that, take a look at Siemens AG ( SIEGY ), the big electronics producer. Shares are Zacks #1 Ranked and the Zacks Value score is A.
With the U.S. services sector running hot, restaurants in the U.S. look attractive. Take a look at Sonic Corp. ( SONC ). Shares are Zacks #1 Ranked now. They have a Zacks A in Growth, a Zacks B in Value, and a Zacks B in Momentum.
For a U.S. stock benefiting from all of the chat that takes place out there, take a look at the defensive AT&T ( T ), the national wireless provider. Shares moved to a Zacks #1 Rank. They have a Zacks B in Growth and Zacks A in Value and a Zacks B in Momentum.
Here's the Week Ahead for Global Market Fundamentals:
On Monday , the China Caixin final PMI manufacturing came out at 48.3, above the market's expectation for 47.6. This was old news.
The Italy manufacturing PMI hit 53.6. The Spanish manufacturing PMI was 51.3. Consensus thought Spain's would be 51.8. Both show expansion.
France's flash manufacturing PMI was 50.6, in line with expectations. Germany's flash manufacturing PMI was 52.1, lower than the 51.6 expected.
Greece's manufacturing PMI was 47.3.
The U.S. final manufacturing PMI look to be 54, while the Markit manufacturing PMI should be 51.9.
On Tuesday , the Reserve Bank of Australia (RBA) holds its interest rate meeting.
The U.K.'s CIPS/Markit construction PMI looks to be 58.8. That's strong.
The Markit manufacturing PMI for Brazil looks to be 46.5.
The ECB's Draghi speaks in Frankfurt.
U.S vehicle sales look hot at 17.7 million annually.
On Wednesday , the services PMI come out.
China's Caixin final Markit Services PMI looks to be 50.8. Meanwhile, Italy's services PMI 62.4 and Spain's at 55.4 should be red hot. France's should be 52.3, while Germany's is 55.2.
The composite Eurozone PMI should be 54, in line with the previous reading. The Eurozone services PMI should be 54.2.
The Eurozone PPI should be -3.3%, lower than the prior -2.6%. That's not good news.
The Fed's Brainard speaks in Frankfurt.
The U.S. ADP payroll survey should come in at 180K. That's lower than the 200K seen last month.
The Fed's Yellen speaks in Washington DC, as does the Fed's Fischer.
The BoJ releases its minutes.
The ECB governing council meeting happens. Draghi and others will speak in Frankfurt.
On Thursday , the U.K.'s Halifax House Price Index could move up to +9.5% from +8.6% y/y.
Eurozone retail trade was +3.0%, up from +2.3% y/y prior.
Markit's Brazil Composite PMI should be 44.2, up from a prior 42.7, but still very weak. Brazil Services should be 43, up from 41.7. That's weak too.
The BoE monetary policy meeting and rate decision happens. The BoE's Carney speaks in London.
The Fed's Dudley and Fischer speak in New York. The Fed's Lockhart speaks in Switzerland. The Fed's Evans speaks in Chicago.
U.S. initial claims should be 260K.
On Friday , German industrial production should be up +1.3% y/y. Spain's industrial production may come out flat, while the U.K.'s should be up +1.3% y/y.
It's a U.S. non-farm payroll week.
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