“People had aggressively pushed cyclicals higher over the past two weeks,” said Tom Essaye, founder of the Sevens Report. “But in order for that to work out beyond the short term, we need to see economic data get better, and that’s not really happening.” Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower as weak global economic data offsets good earnings from AAPL and FB.
The Chinese October manufacturing PMI fell to 49.3 vs. (E) 49.8, the lowest level since January 2016. German retail sales and EU unemployment also slightly missed estimates and the takeaway is that the hoped for stabilization in the global economy isn’t happening yet.
On U.S./China trade, a Bloomberg headline hit early this morning saying a long term U.S./China trade deal is unlikely, but that’s not news as it was never expected. Instead, consensus expectations are for an ineffectual Phase One document to be signed, and then no further progress after that (the key to this whole drama remains whether there’s any tariff relief).
Today’s focus will remain on economic data as earnings begin to move towards the back burner. Key reports to watch today, in order of importance, are: Core PCE Price Index (E: 0.1%, 1.7%), Employment Cost Index (E: 0.7%) and Jobless Claims (E: 215K). From a data standpoint, with the Fed now on hold, “good” economic news is good for stocks, and “bad” economic news is bad. So, the bulls are looking for good news for the remainder of the week.
“If the Fed clearly signals that this cut is the last cut for sometime, then I’d expect it a pretty nasty reaction from stocks as markets want more rate cuts…” wrote Tom Essaye, president of the Sevens Report, in a Tuesday note to clients. Click here to read the full article.
“People had aggressively pushed cyclicals higher over the past two weeks. But in order for that to work out beyond the short term, we need to see…” said Tom Essaye, founder of the Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are flat ahead of the Fed decision and multiple key economic releases today while int’l shares declined overnight on soft data.
The Eurozone EC Economic Sentiment Index dropped to 100.8 vs. (E) 101.4 in October, a fresh 3+ year low as recession concerns continue to weigh on growth expectations.
The FOMC Meeting Announcement at 2:00 p.m. ET and Fed Chair Powell’s Press Conference at 2:30 p.m. ET will clearly be the main events for the markets today however there are two key economic reports that warrant attention before the bell this morning: Econ Today: ADP Employment Report (E: 139K) and Q3 GDP (E: 1.7%).
Meanwhile, earnings season remains in full swing with multiple important reports due out today: GE ($0.12), SNE ($1.08), YUM ($0.94), AAPL ($2.84), FB ($1.91), SBUX ($0.70), WDC ($0.28), SU ($0.54).
Bottom line, economic data and earnings will be able to influence early price action across asset classes today but where equity and bond markets close will almost exclusively rely on whether the Fed meets expectations, comes across as dovish, or offers another hawkish (and bearish stocks) surprise like we saw back in late July.
Meanwhile, the natural-gas market is “at the point in the year where the weather forecasts tend to take control…as speculators bet on how temperature trends will affect demand and ultimately supply levels,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower and bonds are rising modestly as investors digest yesterday’s new all-time highs in the S&P, eye Brexit developments, and position ahead of the week’s long list of catalysts.
British PM Boris Johnson is making a new push for a general election in early December, increasing the odds of a no-deal Brexit which is weighing on stocks this morning.
There are a few economic reports to watch this morning including S&P Case-Shiller HPI (-0.1%), Consumer Confidence (E: 128.6), and Pending Home Sales (E: -0.2%) but the market’s reaction is expected to be limited as the FOMC meeting begins which will likely lead to a degree of “trader paralysis” today.
Meanwhile, earnings season remains in full swing and there are several notable reports due today which could influence sector trading: MA ($2.01), MRK ($1.25), PFE ($0.63), GM ($1.31), AMD ($0.18), and AMGN ($3.51).
The “dismal durable goods number is helping boost gold prices as recession fears are again on the rise,” said Tyler Richey, co-editor at Sevens Report Research…Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night of mixed earnings.
On the earnings front, AMZN missed earnings badly but INTC posted strong numbers and the two are largely offsetting one another.
Regarding U.S./China trade, there is a phone call between the two countries today where China will ask for the December tariff increases to be formally scrapped and the 9/1 tariff increases to be rescinded. If this happens, it’s a positive surprise.
Today the calendar is quiet as we have just one economic report, Consumer Sentiment (E: 96.0) and only a few notable earnings reports, VZ ($1.24) and BUD ($1.36).
So, focus will be on that U.S./China trade call, and if we see the September tariff increases rolled back, that will likely send the S&P 500 to new all-time highs.
Major indexes are mixed today after major companies like Microsoft, Twitter, and Tesla reported earnings. Founder of The Sevens Report Tom Essaye joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss. Click here to watch the full video.
