“The historic drop by front month oil futures was largely due to logistical issues in the physical market, namely lack of available storage, paired with futures expiration looming…” wrote Tom Essaye, founder of The Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower as markets digest Wednesday’s rally and, so far, ignore very soft economic data.
April global flash PMIs were horrible and worse than feared. The EU composite PMI collapsed to 13.5 vs. (E) 26, the British composite PMI imploded to 12.9 vs. (E) 32, and the Japanese composite dropped to 27.8 vs. the prior 36.2.
The weak PMIs show the scope of the economic damage, and it’s bad, but hope remains for a rebound in the coming months given trend in the virus data, and that’s why these historically bad numbers aren’t causing a deeper sell off this morning.
Focus today will be on economic data, via Jobless Claims (E: 4.000MM) and the U.S. April Composite Flash PMIs (E: 37.5). If both numbers are not as bad as feared, and combined with the chatter of economic “reopening,” then stocks can extend yesterday’s rally. We also get New Home Sales (E: 632K), although that shouldn’t move markets.
What’s in Today’s Report:
Stock futures are enjoying a solid 1%+ bounce this morning while international markets were mixed overnight as oil prices are relatively steady following a two day rout.
WTI crude oil futures, which turned negative on Monday, are wavering between gains and losses this morning but are importantly well above yesterday’s lows ahead of the key weekly EIA inventory report this morning (10:30 ET).
There are no Fed speakers today and just one second tiered economic report that shouldn’t move markets: FHFA House Price Index (E: 0.4%).
Earnings season is in full swing, continuing today with reports from: DAL (-$0.72), T ($0.84), BIIB ($7.74), CSX ($0.92), AA (-$0.29), KMI ($0.24), DFS ($1.80), and STX ($1.29).
Investors remain shaken by the historic surge in oil market volatility this week and energy will continue to be a primary focus of the market today.
And if the EIA print mid-morning is bearish (big inventory builds, resilient U.S. production, low refinery runs), and oil comes for sale again, stocks will likely struggle to maintain this morning’s bid.
What’s in Today’s Report:
Futures are down more than 1% mostly on digestion of last week’s big rally, as the weekend was relatively quiet from a news standpoint.
WTI crude oil is down nearly 30% (not a typo) but that decline is about logistics, as there are fears of not enough storage in the U.S. for looming oil imports. Conversely, Brent crude is down only 3%. Point being, the declines are being driven by a logistical issue, not a fresh reduction in demand (i.e. lower than expected economic growth).
Economic data was sparse overnight, as German PPI fell slightly more than expected (-0.8% vs. (E) -0.7%).
Today there are no economic reports so focus will remain on “reopening” news, as the pace of normalization of the U.S. and global economy will decide whether stocks can hold last week’s gains.
“Despite the efforts by global oil producers to curb production in order to balance the market over the last week, the world is still facing a massive demand issue,” Tyler Richey at Sevens Report Research told MarketWatch. “Until we see consumption of refined products…” Click here to read the full article.
“Despite the efforts by global oil producers to curb production in order to balance the market over the last week, the world is still facing a massive demand issue,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. “Until we see consumption of refined products begin to recover, resulting in…” Click here to read the full article.
“This will be a unique earnings season,” Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter, wrote in a note. “But it remains critically important because it’ll give us microeconomic insight into the question of ‘How bad is the damage?’…Click here to read the full article.
What’s in Today’s Report:
Futures are sharply higher thanks to a positive article on a Gilead drug effectively treating coronavirus.
GILD’s drug Remdesivir has been effective in reducing symptoms in a very small (125 people) study at a Chicago hospital, but the news is sending stocks higher. For those interested, a link to the article is here.
Economically, Chinese data was weaker than expected as Q1 GDP fell –6.8% vs. (E) -6.0%.
There are no notable economic reports today so focus will remain on any additional coronavirus information, along with earnings. Some reports we’re watching today include: PG ($1.11), SLB ($0.25), CFG ($1.61).
What’s in Today’s Report:
Futures are cautiously higher this morning but international markets were mostly lower overnight as investors weigh the effectiveness of COVID-19 containment strategies against their longer term impact on the global economy.
Economically, Eurozone Industrial Production was the only release overnight (-0.1% vs. E: -0.1%) but it was a February number and therefor largely dismissed by the markets.
This morning, focus will be on what will likely be the most important economic release of the week: Jobless Claims (E: 5.50M) as a larger than expected number of claims will point to further deterioration in the labor market while a smaller number will suggest the government stimulus efforts are beginning to work in supporting the U.S. jobs market.
There are two other economic reports to watch: Housing Starts (E: 1.32M) and the Philadelphia Fed Business Outlook Survey (E: -29.5) while no Fed officials are scheduled to speak.
Beyond economic data, investors will be sifting through more Q1 earnings releases including results from: BLK ($6.69), ABT ($0.58), TSM ($0.66), and BK ($0.90), as well as any new developments on the broader COVID-19 situation.
