The National Health Commission of China reported 7,711 confirmed cases of the coronavirus, including 170 casualties. According to CNBC, Sevens Report founder Tom Essaye said that global markets are “becoming more concerned” about future earnings and economic growth…Click here to read the full article.
“The spread of the Wuhan virus isn’t accelerating, but markets becoming more concerned about future earnings and economic growth as companies implement work stoppages…” said Tom Essaye, the founder of The Sevens Report.
What’s in Today’s Report:
Futures are bouncing modestly following Friday’s selloff. The weekend was a quiet one from a market standpoint.
The Wuhan virus situation didn’t change (the virus continues to spread) but there are reports that existing anti-viral drugs are helping to treat the disease (a small positive).
Economically, The EU and British manufacturing PMIs slightly beat estimates, but still remain weak on an absolute basis (47.9 and 50.0 respectively).
Today the key economic report is the January ISM Manufacturing PMI (E: 48.7), and following Friday’s bad Chicago PMI, the market needs a decent number to help reassure investors the U.S. economic remains on solid footing. There’s also one Fed speaker, Bostic at 4:30 p.m. ET, but he shouldn’t move markets.
Regarding any Wuhan headlines, the key remains whether they will add more pressure to global growth. If we hear about more plant closures/flight & travel restrictions, etc. that will pressure stocks.
“The spread of the Wuhan virus isn’t accelerating, but markets becoming more concerned about future earnings and economic…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.
Tom Essaye, founder of Sevens Report Research, says investors have a clear playbook for Wuhan.
“From a market standpoint, since this disease is closely related to SARS, I think the market…” Essaye says. Click here to read the full article.
“The pace of the drop in copper prices is a growing concern as futures are down more than 10% from the January highs and beginning to suggest that there…” analysts at Sevens Report Research wrote in Tuesday’s newsletter. Click here to read the full article.
Between the lines: That likely paints the Fed into a corner in addressing the program at its meeting tomorrow, Tom Essaye, director of Sevens Report Research, says in a note.
What’s in Today’s Report:
Futures are sharply lower as concerns about the economic fallout from the Wuhan coronavirus continue to mount.
The spread of the Wuhan virus isn’t accelerating, but markets becoming more concerned about future earnings and economic growth as companies implement work stoppages to reduce the chance of the disease spreading.
Today there is a Bank of England rate decision and while the official market expectation is for no change, don’t be shocked if there’s a 25 bps rate cut. Outside of the BOE, we also get the first look at Q1 GDP (E: 2.1%) and Jobless Claims (E: 215K).
On the earnings front, today is really the last “big” day of earnings, and the clear highlight is AMZN ($3.98) after the close, followed by: V ($1.46), KO ($0.43), UPS ($2.10), VZ ($1.15), MO ($1.01).
What’s in Today’s Report:
Futures are trading higher this morning thanks to strong earnings from AAPL and positioning into today’s Fed Announcement while coronavirus fears continue to ease as the mortality rate is importantly holding steady near 2%.
Today is lining up to be a busy day as there are a slew of potential market catalysts on the calendar.
First, there are two economic releases to watch: International Trade in Goods (E: -$66.9B) and Pending Home Sales (E: 0.4%) before the Fed events kick off with the FOMC Meeting Announcement at 2:00 p.m. ET, followed by the Fed Chair Press Conference at 2:30 p.m. ET.
Meanwhile, we are in the peak of Q4’19 earnings season and there are a number of major U.S. corporations reporting results today including: BA ($1.73), T ($0.87), MCD ($1.96), MA ($1.87), GE ($0.18), GD ($3.46), DOW ($0.74), MSFT ($1.32), FB ($2.51), TSLA ($2.03), and PYPL ($0.84).
Bottom line, the Wuhan coronavirus outbreak, disappointing economic data, a hawkish Fed, and negative earnings surprises are all risks that could cause volatility in stocks into the end of the week, however, the market is currently showing resilience in the face of these potentially negative catalysts which leaves the pain trade higher for now.
What’s in Today’s Report:
Futures are slightly higher this morning as the coronavirus outbreak continues to spread but other market influences including key earnings and the Fed are coming into focus.
Reports show that the number of coronavirus cases has climbed to more than 4,500 and the death toll has topped 100 in China however the mortality rate encouragingly remains ~2%, well below the 10% rate of SARS in the early 2000s.
The number of market catalysts picks up today starting with three economic data points to watch: Durable Goods Orders (E: 0.5%) being the key report to watch while the S&P Case-Shiller HPI (0.4%) and Consumer Confidence (E: 127.8) will also be released.
Additionally, the January FOMC Meeting begins and earnings season remains in full swing. The key report to watch today is AAPL ($4.54) after the closing bell but other notables include: LMT ($4.99), MMM ($2.10), PFE ($0.57), UTX ($1.84), AMD ($0.31), and EBAY ($0.75).