Tom Essaye, The Sevens Report: “There is no question that growth and earnings will be lower in the coming months, and while we saw some pretty significant cuts to expected S&P 500 2020 earnings…” Click here to read the full article.
What’s in Today’s Report:
Futures are sharply higher as Biden, the more business and market friendly Democratic candidate, had a strong showing on “Super Tuesday” while the coronavirus outbreak fueled further optimism for more stimulus globally.
COVID-19 cases have topped 93K with a death toll over 3,100.
HPE was the latest company to cut 2020 guidance due to the coronavirus while the Caixin China Services PMI fell from 51.8 in January to a record low of 26.5 in February, also citing the virus outbreak as the primary reason for the weakness.
Looking into today’s session, there are two economic reports to watch: The ADP Employment Report will hit first (E: 170K), but then, more importantly, the ISM Non-Manufacturing Index (E: 55.1) is due out shortly after the open and it could be a major catalyst for further gains (if it is good) or more volatility (if is badly misses expectations).
Lastly, the St. Louis Fed’s Bullard will speak twice today (11:00 a.m., 6:30 p.m. ET) and any indication on the Fed’s future policy plans could also have a significant influence on markets with the coronavirus outbreak still being closely watched by investors.
Investors may be hoping a March rate cut stops the bleeding in the stock market, but Sevens Report’s Tom Essaye said Friday that another rate cut might be a bearish signal for the economy.
“While this is a fairly unique situation that the markets have rarely seen in the past, especially in the age of high-frequency trading houses and 24 hour, instant news sources, if the Fed does indeed cut rates in the coming months as the markets are pricing in, then it will mark…” Essaye said. Click here to read the full article.
What’s in Today’s Report:
Futures are trading higher this morning while international markets were mixed overnight as investors weighed stimulus hopes against the continued spread of the coronavirus.
As cases of COVID-19 topped 90,000, the RBA was the first central bank to cut its official “cash rate” to a record low of 50 basis points overnight largely due to the outbreak.
Economically, the Eurozone HICP Flash for February and Unemployment Rate for January both met expectations overnight at 1.2% and 7.4%, respectively.
Today, there are a few potential catalysts to watch including one economic data point: Motor Vehicle Sales (E: 16.8M) and one Fed speaker after the close: Evans (6:30 p.m. ET), while politically, “Super Tuesday” will be in focus.
The coronavirus outbreak remains the single most important factor for global markets right now, however, and if there is a significant rise in reported cases of deaths related to the virus, this week’s risk-on money flows could begin to fade and potentially give way to more volatility.
Conversely, any news regarding emergency stimulus measures, especially by G7 nations could help this week’s rally extend higher.
What’s in Today’s Report:
Markets are trying to stabilize and futures are down modestly, but they have been volatile as futures have been down 1% and up 1% before trading back closer to flat.
If there’s a “reason” for the attempted rebound, it’s the surging expectation for a globally coordinated central bank response sometime later this week (possibly a 50 bps cut).
Coronavirus news remained negative in aggregate as cases increased in the U.S., although the news is no worse than what the market’s priced in last week.
Economically, the Chinese Feb. Manufacturing PMI imploded to 35.7 vs. (E) 46.0, but that wasn’t a surprise. The data from the EU and Britain was solid.
Today the market will be driven by the latest coronavirus headlines, but there is an important economic report, the ISM Manufacturing PMI (E: 50.4), and a better than expected number would give the market a needed confidence boost.
Tom Essaye intereviewed with Brian Sozzi and Alexis Christoforous from Yahoo Finance to discuss the debate on whether the Federal Reserve must hold an emergency meeting this weekend and cut interest rates to arrest the coronavirus stock market crash.
Click here to watch the full interview.
What’s in Today’s Report:
Futures are down sharply but well off the overnight lows as markets digest yesterday’s collapse in stocks.
Coronavirus continues to spread (new cases in Nigeria and New Zealand) but China announced the fewest number of new cases since January 23rd, so there is progress occurring.
Economically, Japanese Retail Sales (-0.4% vs. (E) –1.0%) and Industrial Production beat estimates.
Coronavirus headlines will continue to dominate trading and today will be another volatile day (Friday’s in corrections always are), but outside of coronavirus markets will be focused on the Core PCE Price Index (E: 1.8%), Consumer Sentiment (E: 100.9) and one Fed speaker Bullard (9:15 a.m. ET).
And don’t forget about the Nevada caucus, where Bernie Sanders scored a big victory. “Politically, Sanders won the Nevada Caucus with more than 40% of the vote, implying his base is bigger than thought, meaning he might be a more…” writes The Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures were volatile overnight, reversing from tentative gains to losses as global shares continued to decline amid the evolving coronavirus outbreak situation.
News regarding COVID-19 remained largely the same overnight; the outbreak in China continues to be contained but is spreading more rapidly in other regions including the EU.
The 10-Yr yield is encouragingly stabilizing this morning while the 2-Yr continues to decline as traders are now pricing in 65% odds of a Fed rate cut by April due to the coronavirus outbreak’s negative effects on the economy.
Today, coronavirus headlines will continue to dominate the news and markets however, there is one economic report to watch: New Home Sales (E: 708K) and two Fed officials are scheduled to speak: Kaplan (9:35 a.m. ET) and Kashkari (1:00 p.m. ET).
The second reason stocks could keep rising is that so far, the economic fallout from the COVID-19 virus appears to be only temporary. In fact, Essaye said investors are seemingly anticipating any lost earnings in the first quarter will simply be recovered in later quarters…Click here to read the full article.
