Market Multiple Table: September Update

/in , /by

What’s in Today’s Report:

  • Market Multiple Table: September Update

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.

Did Anything Change Last Week?

/in , /by

What’s in Today’s Report:

  • Did Anything Change Last Week?

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.

Tom Essaye Quoted in Unseen Opportunity on September 3, 2020

/in , /by

“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.

Tom Essaye Quoted in CNBC on September 2, 2020

/in , /by

“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.

Jobs Day

/in , /by

What’s in Today’s Report:

  • Why Did Stocks Drop Yesterday?
  • How the VIX and Stocks Rose Together in August

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.

Jobs Report Preview

/in , /by

What’s in Today’s Report:

  • Jobs Report Preview
  • EIA Data and Oil Update

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.

Tom Essaye Quoted in Yahoo Finance on September 1, 2020

/in , /by

“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.

Is the S&P 500 “The Market” Anymore?

/in , /by

What’s in Today’s Report:

  • Is the S&P 500 “The Market” Anymore?

Stock futures are trading at record highs this morning amid renewed stimulus hopes and soft economic data overseas.

Late yesterday, Treasury Secretary Mnuchin urged Congress to pass new stimulus funding and expressed willingness to sit down with Congressional Democrats to work towards a deal.

German Retail Sales were -0.9% vs. (E) +0.5% in July bolstering the case that more stimulus is needed globally.

Today, we will get an initial look at labor market data for the month of August via the ADP Employment Report (E: 850K) which could move markets if there is a material surprise (either way) in the headline. Data on Factory Orders for July (E: 5.8%) will also be released this morning.

There are multiple Fed speakers today including: Williams (10:00 a.m. ET), Mester (12:00 p.m. ET), Kashkari (3:00 p.m. ET), and Daly (6:00 p.m. ET), from which the market will look for additional signals that the FOMC will remain very accommodative for the foreseeable future.

Finally, the next stimulus package has jumped back into the forefront of the market’s focus so any developments regarding progress towards a deal will be well-received by risk assets including stocks while concerns of an ongoing stalemate will be a headwind.

Why Can’t the Fed Generate Inflation?

/in /by

What’s in Today’s Report:

  • Why Can’t the Fed Generate Inflation

U.S. stock futures have a mild bid this morning while international shares were split between gains and losses overnight amid mixed economic data.

Global manufacturing PMI data largely met expectations overnight and did not materially move markets.

The August Eurozone HICP Flash (our equivalent of CPI) missed with a headline of -0.2% vs. (E) +0.2% but a resulting rise in stimulus hopes is helping EU equities outperform today.

Looking into today’s session, there are two economic reports: ISM Manufacturing Index (E: 54.5) and Construction Spending (E: 1.1%) however the former will be the more important release to watch regarding the health of the economic rebound.

Additionally, there is one Fed speaker today: Brainard (1:00 p.m. ET), and markets will simply be looking for further confirmation that the FOMC plans to be very accommodative for quarters to come.

Tyler Richey Co-editor at Sevens Report Quoted in MarketWatch on August 31, 2020

/in /by

“The uptrend has clearly lost momentum since the early stages of the Q2 rebound.” However, “the path of least resistance is still higher right…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Tyler Richey