Has There Been A Positive Change?

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What’s in Today’s Report:

  • Has There Been A Positive Change in Markets?
  • Jobs Day

Futures are solidly higher thanks mostly to continued momentum following Wednesday’s rally.

Economic data was sparse overnight, as the only notable report was the Eurozone Unemployment Rate, which slightly beat estimates (7.4% vs. (E) 7.7%).

Coronavirus cases continued to rise in the U.S. and hit a new daily record above 50k.

Today the focus will be on the Employment Situation Report, and the expectations are as follows: Job Adds: 3.000M, UE Rate: 12.4%, Wages: -0.8%).  As long as the number isn’t a major disappointment (say below 2.5MM) it likely won’t interrupt this week’s lift in markets.

We also get Jobless Claims (E: 1.400M) this morning, and while it’ll be overshadowed by the monthly jobs report, claims are actually more important, and if they can continue to decline towards 1MM (and beat expectations) that will be an additional tailwind on stocks.  Conversely, if claims start to move higher, that could offset even a better than expected monthly jobs report.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • A Historic Quarter for the Energy Markets

Stock futures are trading modestly lower this morning after the S&P 500 registered its best quarterly gain in over 20 years in Q2 while economic data was mostly better than expected overnight.

Economically, China’s Caixin Manufacturing PMI firmed to 51.2 in June from 50.7 in May while the Eurozone Manufacturing PMI rose to 47.4 from 39.4 in May pointing to a continued rebound in economic activity last month.

Today, we will get our first look at June jobs data with the ADP Employment Report (E: 3.500M) due out ahead of the bell while the ISM Manufacturing Index (E: 49.0) and Construction Spending (E: 0.8%) will both be released shortly after the open.

Later in the day, the only real catalyst to watch for is the release of the latest FOMC Meeting Minutes at  2:30 p.m. ET as traders will be looking for any additional insight into the Fed’s future stimulus plans or view of the state of the economy.

Risks to the Stimulus Driven Rally

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What’s in Today’s Report:

  • Bottom line: Risks to the Stimulus Driven Rally

Stock futures are slightly lower this morning as investors weigh a continued rise in coronavirus cases and escalating geopolitical tensions against positive economic data.

China’s CFLP Manufacturing PMI rose to 50.9 vs. (E) 50.5 in June indicating an acceleration in the economic recovery.

China’s parliament passed a new national security law for Hong Kong o/n but specific details have yet to be released.

Today, there are two economic reports to watch: S&P Case-Shiller HPI (E: 0.5%) and Consumer Confidence (E: 90.0) as well as a slew of Fed speak to monitor: Williams (7:00 & 11:00 a.m. ET), Powell (12:30 p.m. ET), Bostic (2:00 p.m. ET), and Kashkari (2:00 p.m. ET).

Powell’s testimony before Congress, alongside Treasury Secretary Mnuchin, will be the “main event” today and as long as they reiterate their plans for stimulus measures to continue for the foreseeable future, stocks should be able to end the second quarter in a relatively quiet manner this afternoon.

Tom Essaye Quoted in International Business Times on June 26, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as voluntary…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Equities.com on June 27, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as voluntary or potentially more…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Unseen Opportunity on June 26, 2020

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Tom Essaye, founder of The Sevens Report, clarified the specific impact that new lockdown measures could have on the market. “Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings…” Essaye said. Click here to read the full article.

Tom Essaye Quoted in ETF Trends on June 26, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as…” said Tom Essaye, founder of The Sevens Report. Click here to read the article

Tom Essaye Quoted in CNBC on June 15, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as voluntary…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Graph

Are Rising COVID Cases A Reason to De-Risk?

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What’s in Today’s Report:

  • Is the Increase in COVID Cases a Reason to De-Risk?
  • Weekly Market Preview (Can the S&P 500 Hold 3000?)
  • Weekly Economic Cheat Sheet (Jobs Report on Thursday)

Futures are slightly higher following a quiet weekend as markets attempt to bounce following Friday’s selloff.

Coronavirus cases continued to rise, with new U.S. cases topping 40k for Friday, Saturday and Sunday.  More states (including California) are pausing re-openings, although none have re-imposed economic restrictions yet.

Economic data was sparse overnight as Euro Zone Economic Sentiment slightly missed expectations (75.7 vs. (E) 80).

Today there is just one economic report, Pending Home Sales (E: 11.3%) and one Fed speaker, Williams (3:00 p.m. ET) and neither should move markets.

Instead, focus will remain on the coronavirus and specifically whether more states pause, and potentially rollback, economic re-openings. Technically, the S&P 500 is sitting on support at 3,000, and if that’s broken, we could see a uptick in selling by programs and algos.

New Coronavirus Growth Rate Tracker

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What’s in Today’s Report:

  • New Sevens Report Coronavirus Growth Rate Tracker (We Made an Important Change)

Futures are slightly higher as markets digest Thursday’s afternoon rally following a quiet night of news.

Coronavirus trends continued to deteriorate as the U.S. set a new daily high for new coronavirus infections (40,184).

But, no additional companies announced plans to slow re-openings, so the market is looking past the spike in cases for now.

There was no notable economic data out overnight.

Today there are two economic reports, Core PCE Price Index (E: 0.1%) and Consumer Sentiment (E: 78.9), but neither should move markets.  Instead, focus will remain on the coronavirus and as long as there aren’t any major corporations announcing a delay in re-opening plans, markets will continue to look past the surging coronavirus infections.