Technical Update (Key Support and Resistance Levels)

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What’s in Today’s Report:

  • Technical Update (Key Support and Resistance Levels to Watch)
  • Jobs Report Preview (Still a Very Important Report)
  • EIA/Oil Market Update

Futures are modestly higher mostly on momentum from Wednesday’s rally, following a quiet night of news.

On trade, China’s Ministry of Commerce said the two sides remained in close communication, but we already knew that and there were no new/notable trade headlines overnight.

Economic data was notably bad.  EU Retail Sales, German Manufacturers’ Orders, Australian Exports and Australian Retail sales all badly missed expectations, and while you wouldn’t know it according to stocks, the outlook for the global economy remains uncertain.

Today there is just one economic report to watch, Jobless Claims (E: 220K) and one Fed speaker: Quarles (10:00 a.m. ET).  So, as has been the case all week, markets will trade-off any new U.S./China trade commentary or headlines.  But barring negative news, the path of least resistance for stocks today appears higher once again.

No Trade Deal?

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What’s in Today’s Report:

  • What Happens If There Isn’t a Trade Deal

Futures are rebounding modestly this morning mostly thanks to a positive trade article by Bloomberg overnight.

The article said Trump’s comments about having no deadline for a China trade deal yesterday, which sent stocks tumbling, were “off the cuff” and that a deal is still likely.

Meanwhile, Service PMI data in China and Europe beat expectations and U.S. legal sanctions against Chinese nationals for human rights violations are not expected to affect trade negotiations.

Looking into today’s session, there are two key economic reports to watch: the ADP Employment Report (E: 156K) and the ISM Non-Manufacturing Index (E: 54.5). And based on the market’s negative response to the soft ISM report on Monday, the has the potential to move stocks.

There is also one Fed official speaking today: Quarles (10:00 a.m. ET), but Fed policy is largely on the back burner right now as no changes in interest rates are expected anytime soon which will leave the market primarily focused on any new developments in the trade war.

Tom Essaye Quoted in Bloomberg Quint on December 3, 2019

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Tom Essaye, a former Merrill Lynch trader who founded the Sevens Report newsletter, said he prefers ISM, but “the bottom line is both numbers are telling us that manufacturing activity is weak.”

Click here to read the full article.

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Tom Essaye Interviewed with Channel 5 on November 3, 2019

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Tom Essaye interviewed with WPTV Channel 5 discussing giving Tuesday. “The most important thing is do your research,” said Tom Essaye, a financial expert and founder of Sevens Report Research. “Before you reach into your wallet, do your research.” Click here to watch the full interview.

WPTV interview with Tom Essaye

Why Have Stocks Dipped?

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What’s in Today’s Report:

  • Bottom Line: Why Have Stocks Dipped?
  • OPEC Meeting Preview

S&P futures were tentatively higher overnight amid mostly quiet news flows until another trade war “tape bomb” triggered rapid risk-off money flows over the last hour.

Speaking in London before this week’s NATO meeting, President Trump said that he “had no deadline” for a trade deal with China and he thought it might be “better to wait until after the election” to make a deal.

The comments lower the odds that a “phase one” deal is agreed upon before the Dec. 15 tariffs are due to go into effect.

In the wake of Trump’s comments this morning, focus will remain almost exclusively on the trade war and any further comments by the U.S. or reaction by China will move markets.

As far as the calendar goes, there is one economic report to watch: Motor Vehicle Sales (E: 17.0M) and there are no Fed officials scheduled to speak today.

Are All the Bulls’ Eggs in One Basket?

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What’s in Today’s Report:

  • Are All The Bulls’ Eggs in One Basket?
  • Weekly Market Preview
  • Weekly Economic Cheatsheet

Futures are marginally higher as better than expected economic data is being offset by some confusion on trade.

Global manufacturing PMIs were better than expected as the Chinese (50.2 vs. (E) 49.5) and Euro Zone (46.9 vs. (E) 46.6) readings beat estimates and furthered the idea that the worst of the global slowdown is over.

On trade, headlines were mixed as Axios reported the Dec. 15 tariffs will be delayed (a positive) although a somewhat hawkish Trump trade tweet this morning is weighing on sentiment (Trump reinstituted steel and aluminum tariffs on Brazil and Argentina and that’s causing an uptick in general tariff anxiety in the market).

Today focus will (of course) remain on any trade tweet or headline, while the key economic report is the ISM Manufacturing PMI (E: 49.4), and the stronger the number, the better.

Will the Hong Kong Bill Hurt U.S./China Trade Talks?

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What’s in Today’s Report:

  • Will the Hong Kong Democracy Bill Hurt Trade Talks?  (No – Here’s Why)
  • What Wednesday’s Strong Economic Data Means for Markets

Futures are modestly lower following the Thanksgiving holiday due to a mild uptick in trade concerns after President Trump signed the Hong Kong democracy bill.

President Trump’s signing of the bill drew criticism from China, but multiple media outlets, including the WSJ, are reporting the law won’t de-rail trade talks.

Economic data was again underwhelming as Japanese IP and German Retail Sales both badly missed estimates, although that’s not impacting markets as focus remains almost exclusively on U.S./China trade.

Today there are no economic reports, no Fed officials are scheduled to speak and the NYSE closes at 1:00 p.m. ET.  So, barring any U.S./China trade headline surprises, it should be a typically quiet post-Thanksgiving trading session.

Tom Essaye Interviewed with Yahoo Finance on November 27, 2019

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Tom Essaye interviewed with Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Jared Blikre to discuss the latest market action, U.S.-China trade deal, economy and more…Click here to watch the full interview.

Yahoo Finance Interview

Tom Essaye Quoted in ETF Trends on November 26, 2019

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“The market still expects a phase one deal that (most importantly) removes the threat of any further escalation in the trade war. But unless there is a material positive surprise, phase one is not going to include material existing tariff reductions…” said Tom Essaye, founder of The Sevens Report, in a note.

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Tom Essaye Quoted in MarketWatch on November 26, 2019

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“Considering that recession fears are based on a slowdown in manufacturing and business spending bleeding into the labor market and, ultimately, the consumer, it’s notable that claims are rising…” according to Tom Essaye, president of the Sevens Report, in a Monday note. Click here to read the full article.

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