Tom Essaye interviewed with TD Ameritrade’s Ben Lichtenstein to discuss earnings, stock markets, consumer staples, coronavirus, concerns, unknowns and much more…Click here to watch the full interview.
What’s in Today’s Report:
Apologies for the slightly tardy delivery. A lot has happened since the close.
Futures are limit down once again as markets were disappointed by President Trump’s speech and proposed economic initiatives.
President Trump announced a travel ban from Europe in an effort to curtail the spreading of the disease, as well as several economic policies aimed at stimulating growth including deferral of income tax payments, more SBA loans, and paid sick leave. All of these initiatives will help the economy, but none are a silver bullet for coronavirus, and as such the market is reacting with short term disappointment.
Econ Today: Jobless Claims (E: 216K), PPI (E: 0.5%). There are no Fed speakers speak today however the Treasury will hold a 30-Yr Bond Auction at 1:00 p.m. ET.
Looking forward, this is a market gripped in panic so we’ll continue to watch the headlines, and we need some good news to break the negative feedback loop in the form of positive corporate commentary or optimism on the transmission of the virus, but those types of headlines have been hard to come by lately.
Tuesday’s rebound for oil is “relatively modest” compared to Monday’s plunge, said Tyler Richey, co-editor at Sevens Report Research. “We could easily see a retracement higher in prices in the days and weeks ahead…” Click here to read the full article.
What’s in Today’s Report:
Futures are lower this morning as hopes for timely fiscal stimulus measures from the U.S. government to combat the negative impact of the coronavirus fade while a “Biden bounce” failed to materialize after the former VP had another strong showing in primary elections yesterday.
Overseas, European shares traded higher after an emergency rate cut by the BOE while Asian markets remained under pressure due to COVID-19 fears with the Nikkei falling into bear market territory overnight.
Today, there is one economic report to watch: CPI (E: 0.1%) while no Fed speakers are scheduled to speak. The only other potential catalyst on the calendar is a 10-Yr Note Auction by the Treasury at 1 p.m. ET that could move bond markets and subsequently, the stock market.
With limited market moving events on the schedule, investors will be looking for further details on the U.S. government’s plans to support the economy through the coronavirus outbreak as well as any further news about the confirmed cases/related deaths as well.
Technically speaking, a break either above yesterday’s highs or below yesterday’s lows in the S&P 500 will likely trigger a follow through move as the market is in a state of indecision and susceptible to a momentum based squeeze either way.
U.S. oil futures settled more than 10% higher on Tuesday, rebounding a bit a day after posting the largest percentage loss since 1991. Tuesday’s rebound for oil is “relatively modest” compared to Monday’s plunge, said Tyler Richey, co-editor at Sevens Report Research. “We could easily see a retracement higher in prices in the days and weeks ahead…Click here to read the full article.
The positive feedback started off with B. of A. Securities strategists who noted that—once the panic finally died off—there was room for “huge rotation to growth stocks and bond proxies” to kick in. The Sevens Report noted that, currently, the S&P 500 was trading at 17 times estimated earnings for 2020, down from just under…Click here to read the full article.
Tom Essaye interviewed with Oliver Renick from TD Ameritrade to discuss the market, oil, coronavirus, and much more. Click here to watch the full interview.
What’s in Today’s Report:
U.S. equity index futures up well over 4% in early trade this morning as investors bet on government stimulus efforts to ease the negative impact of the COVID-19 outbreak.
President Trump and VP Pence announced “very dramatic actions to support the economy” in a press conference late on Tuesday which triggered broad risk-on money flows.
Economically, Q4 Eurozone GDP was 1.0% vs. (E) 0.9%, and the NFIB Small Business Optimism Index was 104.5 vs. (E) 103.7 in February; both are helping investor sentiment today.
Looking into today’s session, there are no economic reports and no Fed speakers however price action is expected to remain volatile amid the uncertainties related to the coronavirus outbreak.
Any positive news regarding U.S. government stimulus measures could help sustain this pre-market rebound in stocks while, if the accommodating measures are underwhelming or there is any incrementally negative news regarding the outbreak statistics, it could rekindle fear among investors and see stocks pullback towards yesterday’s trading range.
OPEC’s recommendation for the 1.5 million barrel per day cut was “a bullish surprise versus expectations on the surface, however, Russia was not willing to participate in the…” which total 500,000 barrel per day, said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
It’s another ugly morning as futures are down sharply on the same issue as Thursday: The growing spread of the coronavirus and fears of a larger economic slowdown.
There was no notable, new news overnight, but the virus continues to spread in the U.S. and the number cancelled travel plans and conferences/events continues to grow.
Economically, German Manufacturers’ Orders rose 5.5% vs. (E) 1.5%, although economic data is being ignored by markets right now (data this week has been better than feared).
Today the key is the jobs report, and the expectations are: Jobs: 175K, UE Rate: 3.6%, Wages: 0.3%/3.0%. A strong jobs report won’t arrest the coronavirus declines (the data will be viewed as dated) but a bad jobs report will make things worse, so we need to see a solid print this morning.
There are also multiple Fed speakers today, and while the market is increasingly expecting 0% rates and potentially QE (seriously), none of the speakers today are leadership so they shouldn’t shed any additional light on those topics. Today’s lineup includes: Evans & Mester (9:20 a.m. ET), Bullard (11:20 a.m. ET), Williams & Rosengren (2:00 p.m. ET), George (3:30 p.m. ET).