Tom Essaye quoted in MarketWatch to share his view on earnings season. “Bottom line, this earnings season is make or break for this market, because we need earnings growth to resume if the S&P 500 is going to…” Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower following another quiet night as markets look ahead to Chinese exports and bank earnings coming tomorrow.
More progress was made in U.S./China trade talks according to the WSJ and a deal is imminent, but the market already assumes that so it didn’t cause a rally.
Chinese and German CPIs both met expectations.
Today there are two economic reports, Jobless Claims (E: 211K) and PPI (E: 0.4%, 0.2%) but neither should move markets. So, focus will be on a lot of Fed speak, specifically Clarida (9:30 a.m. ET) and Williams (9:35 a.m. ET) (Bullard and Bowman also speak today but they aren’t considered Fed “leadership”). If Clarida and Williams talk more about an “average” inflation target, that might put a mild tailwind on stocks as it hints at a more dovish Fed in the future (something we didn’t see in the Minutes yesterday).
“It is a very quiet morning with stock futures trading slightly lower while most overseas markets edged higher overnight as investors look ahead to catalysts later in the week,” writes The Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures are drifting higher this morning while overseas markets were mixed during a quiet night of trading as investors look ahead to a busy calendar of events today.
There were a few economic releases o/n but none materially moved markets with international focus on this morning’s ECB Announcement (7:45 a.m. ET) and Draghi’s press conference afterwards where he is expected to shed light on TLTRO plans.
Looking into the U.S. session today, it is shaping up to be a busy one. In chronological order, there is one economic report ahead of the open: CPI (E: 0.3%, 0.2%), weekly EIA data is due out at 10:30 a.m. ET, and the Fed’s Quarles is schedule to speak at 11:50 a.m. ET.
Moving to the afternoon, there is a 10-Year Treasury Note Auction at 1:00 p.m. ET and if the outcome moves yields materially, stocks will likely follow. Then, the FOMC March Meeting Minutes are due out at 2:00 p.m. ET and the Fed’s Kaplan speaks later this evening: 7:00 p.m. ET.
With so many moving parts today, it will be important to keep an eye on yields as the bond market will offer the best read of how investors are digesting all of the day’s events.
Specifically, the 10 year yield has stabilized at 2.50% recently and if it can move higher, stocks could grind higher as well, however, if yields begin to drop like they did two weeks ago, volatility is likely to rise again, potentially significantly.
The Energy Information Administration report on U.S. petroleum supplies due Wednesday “will likely be the most-important catalyst for the energy market this week. The closure of the Houston Ship Channel in recent weeks has likely skewed…” wrote analysts at the Sevens Report. Click here to read the full article.
7 Things Need to Happen For Stocks to Move Higher
Tom Essaye, founder of Sevens Report Research, recently compiled this list of seven things that need to happen for the market to make it back to new highs this year. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly weaker following a generally quiet weekend as markets digest last week’s rally.
Economic data was mixed and is putting mild pressure on stocks this morning as German exports missed expectations (-1.3% vs. (E) 0.1%), reminding markets the global economy isn’t healed yet.
U.S./China trade talks ended last week without an announcement of a deal but talks will continue this week via video-conference and a deal is still widely expected.
Today there are no economic reports and no Fed speakers, so focus will remain on any U.S./China headlines (again a deal could be announced any minute). But, barring any surprises today should be generally quiet as the big events of the week (FOMC Minutes, Chinese data, bank earnings) happen Wed-Friday.
Tom Essaye appeared on Reuters on April 4, 2019. Great interview with Fred Katayama discussing the “goldilocks number” for the March jobs report. Click here to watch the full interview.
The Dow Rose 39 Points After a Late Comeback
Economic data clearly remain soft on an absolute level, wrote Tom Essaye of Sevens Report on Wednesday. “There is now a laundry list of economic indicators that are flashing their worst readings since 2016…” Click here to read the full article.
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night as markets wait for this morning’s jobs report.
President Trump said he hoped the U.S./China trade deal would be done in the next four weeks, which again generally meets markets expectations.
Economic data was sparse but German Industrial Production rose 0.7% vs. (E) 0.5%, somewhat offsetting Thursday’s disappointing German Manufacturers’ Orders report.
Today the focus will be on the jobs report and the expectations are as follows: Jobs Adds 170K, UE Rate 3.8%, Wages 3.4% yoy.
The best outcome for stocks today would be a jobs number in the mid 100k range (not too strong, but not too weak), positive revisions to the February data and a wage number below 3.5% yoy. That outcome likely can spark a further rally. Conversely, any extremes on the job adds (very good or very bad) along with another hot wage number may lead to profit taking in stocks on fears of slowing growth or a more hawkish Fed.