Stimulus Update (Progress Is Being Made)

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What’s in Today’s Report:

  • Stimulus Update
  • Weekly EIA/Oil Market Update (Can the Rally Continue?)

Futures are modestly higher thanks to stronger than expected earnings and progress on the stimulus front.

TSLA earnings beat lofty expectations and the stock rallied after hours, while the rest of the major earnings reports (MSFT/CMG) were generally in-line (i.e. no disasters).

Republicans apparently reached a consensus on their version of next stimulus bill, so progress continues and a new stimulus bill is expected in the next few weeks.

Today the key number will be weekly jobless claims.  There are rising fears that the U.S. economy is plateauing after the recovery in May/June, and if weekly claims move back towards, or through 1.5M, that will likely spook markets and imply that the recovery is stalling.  Regarding earnings, the two reports we’re watching are T ($0.78), AAL (-$6.40), but earnings shouldn’t move markets toda

Another Tailwind for European Stocks

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What’s in Today’s Report:

  • Another Positive for Europe (and European Stocks)
  • The Key Driver of the Precious Metals Rally

Stock futures are trading modestly lower this morning as rising U.S.-China tensions offset good economic data.

The U.S. directed China to close its consulate in Houston citing IP security risks, a move which China condemned as “an unprecedented escalation” of tensions.

Today, there are two economic reports to watch: FHFA House Price Index (E: 0.4%) and Existing Home Sales (E: 4.795M) while no Fed officials are scheduled to speak.

The Treasury will hold a 20-Yr Bond Auction at 1:00 p.m. ET and with yields near their lows for the year, a strong auction could act as a headwind for risk assets this afternoon.

Aside from those potential catalysts, investors will be watching the fluid situation between the U.S. and China for any signs of further deterioration in relations while earnings season remains in full swing with: BIIB ($7.99), and CP ($2.71) reporting before the open and TSLA (-$0.71), MSFT ($1.38), LVS (-$0.64), and CSX ($0.67) all due to release Q2 results after the close.

Tom Essaye Quoted in Yahoo Finance on July 17, 2020

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On Monday, Oxford University and AstraZeneca announced promising results from an early phase human trail of its vaccine candidate. In the face of growing hopes for a coronavirus vaccine, investors have been bidding up stocks aggressively, despite mounting bad news about new COVID-19 infections.

Yet Tom Essaye, founder of the Sevens Report, told Yahoo Finance on Monday that markets are downplaying key problems associated with vaccine development. Currently, drug giants Pfizer (PFE), Johnson & Johnson (JNJ), AstraZeneca…Click here to read the full article.

Tom Essaye Interviewed with Yahoo Finance on July 20, 2020

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Sevens Report Research Founder Tom Essaye speaks with Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Jared Blikre about the latest market moves. Click here to watch the full interview.

The New Stimulus Bill (Good, Bad, Ugly)

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What’s in Today’s Report:

  • Technical Take: Finally a Breakout
  • The New Stimulus Bill: Good/Bad/Ugly

Markets are risk-on this morning with U.S. stock futures tracking European shares higher after EU leaders finalized a $2T stimulus package overnight while Q2 earnings from IBM topped expectations after the close yesterday.

The EU spending package, which importantly incorporates EU bonds, still needs to be passed by the EU Parliament and may not begin to take effect until mid-2021.

Looking into today’s session, there are no economic reports to watch and no Fed officials are scheduled to speak however the earnings calendar picks up considerably.

Companies reporting Q2 results today include: KO ($0.40), LMT ($5.71), PM ($1.09), and SYF ($0.04) before the open and SNAP (-$0.09), UAL (-$9.13), TXN ($0.87), and COF (-$1.25) after the close.

Why This Week Is More Important Than It Seems

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What’s in Today’s Report:

  • Why This Week Is More Important Than It Seems
  • Weekly Market Preview:  Still About Vaccines and Stimulus
  • Weekly Economic Cheat

Futures are marginally lower following a mostly quiet weekend, although there was mild disappointment regarding future EU stimulus.

The EU bailout fund saw the amount of direct grants reduced to 390B from 500B euros at this weekend’s EU summit, and that’s weighing marginally on stocks.

Economically, the only notable number was German PPI, which slightly missed estimates (flat vs. (E) 0.2%).

Today there are no notable economic reports and just two important earnings, HAL (-$0.11) and IBM ($2.14), but it’s unlikely either will move markets.

Instead, negotiations will begin on the new stimulus bill and that will be the major market influence today (that or any new vaccine headline).  If negotiations start poorly, expect stocks to sink moderately in response (although markets still very much expect a deal to get done, and that needs to happen as the $600/week stimulus checks end this week).

Please email info@sevensreport.com if you have any trouble downloading today’s Report or need to contact us.  Please do not respond to this email as we do not receive any replies from this email address.

What’s Next for the Oil Market?

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What’s in Today’s Report:

  • Oil Market Outlook: Supply, Demand, and COVID-19
  • Economic Data Takeaways

Stock futures are modestly higher this morning while international markets were mixed overnight as investors weigh a fresh record number of new coronavirus cases in the U.S. against economic data that was mostly upbeat this week.

NFLX is notably down 7% in pre-market trade after the company reported disappointing Q2 results yesterday.

Economically, Eurozone HICP met expectations in June, rising 0.3% but the report did not materially move markets overnight.

Today,  investor focus will be on earnings early with three more notable financial companies reporting before the bell: ALLY ($0.33), BLK ($6.90), and CFG ($0.17).

Then there are two economic reports due out this morning: Housing Starts (E: 1.190M), and Consumer Sentiment (E: 79.3) while no Fed officials are scheduled to speak.

Bottom line, markets began to trade with a more cautious tone over the course of the week but for now, upbeat economic data has been able to offset rising new cases of COVID-19 in the U.S. and as long as underlying sentiment remains largely optimistic, stocks should be able to maintain or extend gains into the weekend today.

Economic Breaker Panel: July Update

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What’s in Today’s Report:

  • Economic Breaker Panel: July Update
  • Industrial Production and Empire State Manufacturing Survey Takeaways

Stock futures are trading lower today as new COVID-19 cases approached a record high Wednesday threatening the prospects for a continued global economic recovery.

Economically, Chinese data was mostly upbeat overnight with GDP, FAI, and Industrial Production all topping estimates however the nation’s June Retail Sales report missed expectations, causing a 4.5% pullback in the Shanghai Composite Index and general risk-off money flows around the globe.

Today, investors will be focused on Q2 earnings early with: BAC ($0.28),  MS ($1.17), JNJ ($1.50), and TSM ($0.73) all due to report before the bell while NFLX ($1.84), PPG ($0.72), and JBHT ($0.84) will all release quarterly results after the close.

Following the morning wave of earnings reports, focus will shift to economic data with: Jobless Claims (E: 1.323M), the Philadelphia Fed Survey (E: 20.0), Retail Sales (E: 5.3%), and Housing Market Index (E: 60) all scheduled to be released today (the first two reports will receive the most attention).

Beyond earnings and economic data, there are two Fed officials speaking today: Williams (11:10 a.m. ET) and Evans (1:30 p.m. ET) while the market will remain very sensitive to any news regarding rollbacks in the reopening process (bearish) as well as positive vaccine developments (bullish).

The Presidential Election and Markets

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What’s in Today’s Report:

  • Why Doesn’t the Market Care About the Election Yet?
  • NFIB Small Business Optimism Index Takeaways

Stock futures are higher this morning following positive vaccine news from MRNA late yesterday which is offsetting a continued rise in tensions between the U.S. and China.

All 45 patients involved in MRNA’s latest coronavirus vaccine trial reportedly showed a “robust immune response” to the treatment, pushing the trial into the next phase.

Looking into today’s session, there are a lot of potential market catalysts including several economic reports due early in the day: Empire State Manufacturing Survey (E: 8.9), Import and Export Prices (E: 1.1%, 0.8%), and Industrial Production (E: 4.3%).

There is also one Fed official scheduled to speak: Harker (12:00 p.m. ET) but he is not likely to move markets as focus shifts to earnings. Notable companies releasing their Q2 earnings reports include: UNH ($5.08), GS ($4.27), PNC ($1.14), and BK ($0.94).

Despite all of the moving pieces this morning, markets are focused on the positive MRNA vaccine developments and continued optimism for a viable vaccine/treatment should support risk-on money flows today barring any major surprises.

Market Multiple Levels: S&P Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart

Stock futures are trading with tentative gains this morning as investors digest yesterday’s late session reversal in the U.S. while focus shifts to the start of Q2 earnings season.

Internationally, there was a slew of economic data overnight and on balance the reports were moderately disappointing.

In the U.S. the NFIB Small Business Optimism Index rose to 100.6 vs. (E) 96.7 in June pointing to a continuing improvement in sentiment among business owners this summer.

Today, there is one economic report: CPI (E: 0.5%) and two more Fed officials are scheduled to speak: Brainard (2:00 p.m. ET) and Bullard (2:30 p.m. ET). As we saw with Kaplan’s comments yesterday, the market remains sensitive to Fed chatter right now as the threat of less accommodation, specifically through bond purchases, is not something priced into stocks right now.

The market’s main focus today however will be on the start to Q2 earnings season as several of the big banks are due to release their quarterly results before the open: JPM ($1.34), WFC (-$0.16), and C ($0.47). Additionally, we will get a look into the state of the airline industry via earnings from DAL (-$4.06) as investors ultimately try to decipher just how bad the economic fallout from the shutdowns in the first half of the year really were.