Why This Week Is More Important Than It Seems

/in /by

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?

/in /by

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

/in /by

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

/in /by

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

/in /by

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.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on July 10, 2020

/in /by

Tyler Richey, co-editor of Sevens Report Research, said oil prices did get a boost after Gilead Sciences Inc. GILD, 1.97% said clinical trial data show its antiviral drug remdesivir reduced the risk of death for coronavirus patients by 62%. The news also provided support to the U.S. stock market. “Oil futures have been trading with a high degree of correlation…” said Richey. Click here to read the full article.

Tom Essaye Quoted in CNBC on July 10, 2020

/in /by

Tom Essaye, editor of the Sevens Report, said Friday that even the S&P 500 has held onto its week-to-date advance in large part thanks to Microsoft, Amazon and Apple. He and others have…Click here to read the full article.

Can Stocks Go Down Anymore?

/in /by

What’s in Today’s Report:

  • “Can Stocks Go Down Anymore?”
  • Weekly Economic Preview

Futures are higher this morning suggesting that U.S. equities will extend last week’s rally and rise in sympathy with global shares today as investors look ahead to earnings season while coronavirus cases continue to surge globally.

New COVID-19 cases continued to rise sharply over the weekend (Florida set a record with more than 15,000 new cases in a single day Saturday) but the death rate importantly remains low which is allowing the market to largely shrug off the spike.

PEP ($1.25) unofficially kicks off earnings season today while major banks including JPM, C, and WFC are due to report their earnings tomorrow which will be one of the more important market catalysts of the week ahead.

Looking into today’s session, things are lining up to be relatively quiet as there are no economic reports and investors will hear from just two Fed officials: Williams (11:30 a.m. ET) and Kaplan (1:00 p.m. ET).

Why Are Bond Yields At Multi-Month Lows?

/in /by

What’s in Today’s Report:

  • Is the Market Already Warning Us On Growth?
  • Why Are Bond Yields Threatening to Breakdown?
  • When the Coronavirus will matter more to stocks

Futures are moderately lower following a generally quiet night of news.

There was no notable economic or geo-political news overnight, and the reason stocks are lower this morning is digestion of this week’s news combined with still worsening coronavirus statistics.

Coronavirus trends remained concerning as the U.S. posted a second straight day of 60k plus new cases, while coronavirus related deaths remain near six week highs, increasing the chances that we see a further pause in the economic reopening, or even the re-imposition of widespread lockdowns.

Today there’s not much scheduled news, as PPI (E: 0.4%) is the only economic report and that won’t move markets.  So, focus will remain on whether we see more economic re-openings pause given the surge in coronavirus cases.  The low on Thursday in the S&P 500 was 3,115, and that’s a level to watch today.  If that’s broken, then we could see selling pressure increase in the near term.

A New Real Time Economic Indicator

/in /by

What’s in Today’s Report:

  • A New, Real Time Economic Indicator
  • EIA and Oil Market Update
  • Why The U.S. Dollar Is Near Multi-Month Lows Again

Futures are slightly lower following a generally quiet night of news as markets digest Wednesday’s afternoon rally.

Economic data was mixed as Japanese Machine Orders beat estimates (1.7% vs. (E) -9.0%), but German Exports missed expectations (rising just 9.0% vs. (E) 14%).

The U.S. set another record for new coronavirus cases (61k) although markets continue to take the surge in stride, for now (more on that in tomorrow’s Report)

Today focus will be on weekly Jobless Claims (E: 1.375M) and if they bounce back towards 2 million, that will be a headwind on stocks as it will imply the economic recovery is stalling.

We also have one Fed speaker, Bostic (12:00 p.m. ET), and presumptive Democratic nominee Biden will give his first major economic policy speech, but neither event should move markets.