“Some froth has come off the market which is a good thing, but keep in mind that we still remain well over levels…” Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter, wrote in a note. Click here to read the full article.
“Hopes for a stimulus deal before the election (Nov 3rd) are fading, and if that’s the case we should expect that to weigh on stocks in the coming weeks…” Tom Essaye, founder of The Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower on digestion of Wednesday’s rally following a generally quiet night.
Economic data was sparse as Japanese Machine Orders was the only notable report, as it beat estimates (6.3% vs. (E) 2.0%).
On the stimulus front, Senate Republicans will pass a $500 bln stimulus bill today but it won’t pass the House, and hopes for a stimulus deal before the election (Nov 3rd) are fading, and if that’s the case we should expect that to weigh on stocks in the coming weeks, especially if economic data starts to roll over.
Today we get the ECB Decision at 7:45 a.m. ET and the expectation is for no change to rates or QE. But, ECB President Lagarde could be dovish in her comments starting at 8:30 ET, and if so that could boost the dollar and be a mild headwind on stocks today.
Away from the ECB, the key report today is Jobless Claims (E: 830K) and markets will want to no major back tracking on the recent drop in claims (so no numbers close to 1MM). Finally, we also get PPI (E: 0.3%), which was “hot” last month. But, with the Fed max dovish, it’s unlikely even a high PPI would cause much volatility in stocks.
What’s in Today’s Report:
Equity futures initially declined at the electronic open last night after AstraZeneca reportedly halted their COVID-19 vaccine trial due to an adverse reaction by a subject in the U.K. but S&P futures have stabilized, and are now up 1%.
Economically, Chinese CPI and PPI headlines for August both met estimates at 2.4% and 2.0%, respectively.
Outside of the AstraZeneca trial headlines, news flow was mostly quiet overnight with investors remaining focused on the recent rout in tech shares.
Looking ahead to today’s session, there is just one economic report: JOLTS (E: 5.950M) but the data is from July so the release should not materially impact markets while no Fed officials are scheduled to speak.
The “thin” catalyst calendar will leave focus on the broader tech space today as profit taking in the sector has single-handedly driven the recent volatility and until tech (Nasdaq) stabilizes, equities will remain under pressure broadly.
What’s in Today’s Report:
U.S. futures are trading lower (Nasdaq 100 down more than 2%) as tensions between the U.S. and China rose over the weekend while economic data mostly beat estimates.
In a press conference yesterday, President Trump mentioned interest in economically “decoupling” from China with a focus on bringing jobs back to the U.S.
Economically, EU GDP was not as bad as feared while the U.S. NFIB Small Business Optimism Index was 100.2 vs. (E) 98.9 in August which is bolstering small caps this morning.
Looking into today’s session, there are no economic reports and no Fed officials are scheduled to speak.
From a catalyst standpoint, the quiet calendar will leave investors looking for any developments on the next stimulus bill or further commentary on the uptick in U.S.-China tensions from the weekend while, based on the pre-market price action, big cap tech shares are likely to continue leading the broad market today.
“Let me be clear: The only reason we do not have a stimulus bill passed yet is because the economy and…” explained Tom Essaye, founder of The Sevens Report. Click here to read the full article.
“Let me be clear: The only reason we do not have a stimulus bill passed yet is because the economy and the markets are performing…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are seeing a marginal oversold bounce after Thursday’s big sell off, as newswires were quiet overnight.
Economic data again disappointed, as German Manufacturers’ Orders rose 2.8% vs. (E) 6.2%, while the UK Construction PMI fell to 54.6 vs. (E) 58.5.
Both reports, combined with other lack luster data this week, are limiting the size of the bounce this morning.
Today the focus will be on the Employment Situation Report and the expectations are as follows: Jobs Adds: 1.413M, UE Rate: 9.9%. As mentioned, the “best” outcome for this report is a strong number towards 2 MM job adds, but not so strong that it relieves pressure on Congress to pass a stimulus bill. A very soft number (less than 1MM job adds) likely adds to yesterday’s downside.
What’s in Today’s Report:
Futures are moderately lower on digestion of Wednesday’s rally and some disappointing economic data.
EU Retail Sales badly missed estimates (-1.3% vs. (E) 1.5%) which is slightly increasing concern about the EU economic recovery.
Global August service and composite PMIs (China/EU) were generally in-line with expectations while the British service PMI slightly missed estimates (58.8 vs. (E) 60.1). Bottom line, the numbers weren’t great, but they weren’t awful either and generally speaking they won’t change the current market outlook.
Today there are two important economic reports, Jobless Claims (E: 977K) and the ISM Non-Manufacturing PMI (E: 56.8), and the market will want to see the actual data close to or better than both numbers to reinforce the economic recovery is ongoing. There’s also one Fed speaker today, Evans at 1:00 p.m. ET.
Finally, it’s important to note that vaccine “chatter” is getting louder and the chance we get a vaccine announcement before the election (November 3rd) is rising. Yesterday the CDC formally notified all 50 states to be ready to distribute a vaccine by late October/early November, so I want everyone to be aware of that, as a vaccine announcement would be another positive for stocks.
“Once different industry participants start sending people out to the field again and visiting customers, everyone else will follow. Zoom is a…” said Sevens Report Research founder Tom Essaye. Click here to read the full article.
