According to Sevens Report, the two factors that could reverse the upward trajectory of valuations would be stalling economic growth and higher interest rates. Until those occur, the rally is expected to shoot up to “20 times earnings, which equates to about 3,500 in the…” Click here to read the full article.
What’s in Today’s Report:
S&P 500 futures rallied to new record highs overnight amid easing concerns over the deadly virus outbreak in China that weighed on risk assets Tuesday.
Chinese health officials announced plans to both screen for, and contain the Wuhan coronavirus which helped reduce fears that a SARS-like epidemic is developing.
Today, there are a few different potential catalysts for the market that warrant watching. First, there are two economic reports on the housing market: FHFA House Price Index (E: 0.3%) and Existing Home Sales (E: 5.430M) which should show a continued rebound in the sector into the end of 2019.
Second, earnings season is in full swing and investors will continue to sift through the releases closely. Notable corporations reporting today include: JNJ ($1.87), ABT ($0.95), ALLY ($0.95), TXN ($1.02), KMI ($0.26), LVS ($0.80), and RJF ($1.90).
Lastly, any new developments on the spread, or containment of, the Wuhan coronavirus will likely get a reaction from markets as it was the primary focus of traders across asset classes yesterday.
“This rally now has a life of its own. I do want to caution that any pullback that occurs (and there will be one) likely will be a bit more painful than before and on the order of 5% to 10%, given how stretched the market has become…” writes Tom Essaye of the Sevens Report newsletter. Click here to read the full article.
“People are getting too optimistic in the short-term. We keep pricing in all this really good stuff that’s going to happen, but it has not shown up yet…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.
“Phase one is behind us and it met market expectations. Now the very real question of whether phase one results in an uptick in economic growth lies in front of us…” Tom Essaye, the founder of The Sevens Report, said in a note. Click here to read the full report.
“Nothing in phase one will specifically add much to global [economic] growth…” wrote Tom Essaye, president of the Sevens Report in a Thursday note to clients. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures and European shares are tracking Asian markets lower amid rising concerns about the outbreak of a newly discovered virus in China.
Chinese health officials have confirmed that the recently named “coronavirus” can be spread by human-to-human contact.
And with the Lunar New Year holiday beginning this week, fears of a SARS-like health epidemic are on the rise which saw the Shanghai Composite fall 1.41% overnight.
Looking into today’s session, there are no notable economic reports due to be released and no Fed officials are scheduled to speak.
That will leave investors largely focused on Q4 earnings season with HAL ($0.29) reporting before the bell and NFLX ($0.50), AMTD ($0.76), UAL ($2.64), and COF ($2.38) all releasing results after the close.
“Unless we begin to see significantly colder temperatures show up in the extended forecasts into the back half of winter, the natural gas market is poised to continue lower…” said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.
Oil prices had spent the front half of the week moving lower “largely thanks to lingering oversupply concerns and a continued unwind of the geopolitical fear bid that was triggered by the U.S.-Iran…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
“Phase one is behind us and it met market expectations,” said Tom Essaye, founder of The Sevens Report, in a note. “Now the very real question of whether phase one results in an uptick in economic growth lies in front of us, and the truth is it’s unclear. Nothing in phase one…” Click here to read the full article.
