Even so, “deeper production cuts were not the consensus expectation coming into this week’s OPEC+ meeting (only an extension of current policy) and if they are formally agreed upon tomorrow, that will be an incremental positive for the market in the near to medium term,” said Tyler Richey, co-editor at Sevens Report Research. Then “we could see WTI futures breakout…” Click here to read the full article.
“Trade war headlines have been the main driver of the energy markets, but since late last week, OPEC+ policy expectations, economic data, and inventory/production releases have…” 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 lower as markets digest Friday’s big rally following a generally quiet weekend.
On U.S./China trade, there was no new news, although China released a statement saying it wanted to make a deal “as soon as possible.”
Economic data was again mixed, as Chinese exports missed estimates (1.3% vs. (E) 1.9%) while German exports beat expectations (1.2% vs. (E) -0.3%. But, neither number is moving markets.
Today there are no notable economic reports and no Fed speakers (they are in their blackout period ahead of Wednesday’s decision) so focus will again be on any updates on U.S./China trade.
The December 15th tariff increases are the last “big” event of 2019 and markets fully expect those to be delayed, so any confirmation of that should be a mild tailwind on stocks. Conversely, any hints the tariffs might go into effect will hit markets, potentially hard.
What’s in Today’s Report:
Futures are modestly higher again as markets ignore more soft economic data and instead focus on incrementally positive U.S./China trade headlines.
China reduced import tariffs on U.S. soybeans and pork and that’s being interpreted as a mild positive in the negotiations, and that’s the reason futures are higher.
Economic data again disappointed as Japanese Household Spending and German IP (-1.7% vs. (E) 0.2%) both missed.
Today the key event on the calendar is the jobs report, (E: Jobs: 180K, UE Rate: 3.6%, Wages: 0.3%) and again the stronger the number, the better. We also get Consumer Sentiment (E: 96.8) this morning, and given the focus on consumer spending, that number is more important than usual. Like the jobs report, the stronger the number, the better for stocks.
Finally, regarding trade, Larry Kudlow will speak on CNBC at 9:30 so we’ll likely get another non-specific, yet positive, update on the U.S./China trade “mood music,” so don’t be surprised if you see a temporary pop in stocks right at the open.
What’s in Today’s Report:
Futures are modestly higher mostly on momentum from Wednesday’s rally, following a quiet night of news.
On trade, China’s Ministry of Commerce said the two sides remained in close communication, but we already knew that and there were no new/notable trade headlines overnight.
Economic data was notably bad. EU Retail Sales, German Manufacturers’ Orders, Australian Exports and Australian Retail sales all badly missed expectations, and while you wouldn’t know it according to stocks, the outlook for the global economy remains uncertain.
Today there is just one economic report to watch, Jobless Claims (E: 220K) and one Fed speaker: Quarles (10:00 a.m. ET). So, as has been the case all week, markets will trade-off any new U.S./China trade commentary or headlines. But barring negative news, the path of least resistance for stocks today appears higher once again.
What’s in Today’s Report:
Futures are rebounding modestly this morning mostly thanks to a positive trade article by Bloomberg overnight.
The article said Trump’s comments about having no deadline for a China trade deal yesterday, which sent stocks tumbling, were “off the cuff” and that a deal is still likely.
Meanwhile, Service PMI data in China and Europe beat expectations and U.S. legal sanctions against Chinese nationals for human rights violations are not expected to affect trade negotiations.
Looking into today’s session, there are two key economic reports to watch: the ADP Employment Report (E: 156K) and the ISM Non-Manufacturing Index (E: 54.5). And based on the market’s negative response to the soft ISM report on Monday, the has the potential to move stocks.
There is also one Fed official speaking today: Quarles (10:00 a.m. ET), but Fed policy is largely on the back burner right now as no changes in interest rates are expected anytime soon which will leave the market primarily focused on any new developments in the trade war.
Tom Essaye, a former Merrill Lynch trader who founded the Sevens Report newsletter, said he prefers ISM, but “the bottom line is both numbers are telling us that manufacturing activity is weak.”
Click here to read the full article.
Tom Essaye interviewed with WPTV Channel 5 discussing giving Tuesday. “The most important thing is do your research,” said Tom Essaye, a financial expert and founder of Sevens Report Research. “Before you reach into your wallet, do your research.” Click here to watch the full interview.
What’s in Today’s Report:
S&P futures were tentatively higher overnight amid mostly quiet news flows until another trade war “tape bomb” triggered rapid risk-off money flows over the last hour.
Speaking in London before this week’s NATO meeting, President Trump said that he “had no deadline” for a trade deal with China and he thought it might be “better to wait until after the election” to make a deal.
The comments lower the odds that a “phase one” deal is agreed upon before the Dec. 15 tariffs are due to go into effect.
In the wake of Trump’s comments this morning, focus will remain almost exclusively on the trade war and any further comments by the U.S. or reaction by China will move markets.
As far as the calendar goes, there is one economic report to watch: Motor Vehicle Sales (E: 17.0M) and there are no Fed officials scheduled to speak today.
What’s in Today’s Report:
Futures are marginally higher as better than expected economic data is being offset by some confusion on trade.
Global manufacturing PMIs were better than expected as the Chinese (50.2 vs. (E) 49.5) and Euro Zone (46.9 vs. (E) 46.6) readings beat estimates and furthered the idea that the worst of the global slowdown is over.
On trade, headlines were mixed as Axios reported the Dec. 15 tariffs will be delayed (a positive) although a somewhat hawkish Trump trade tweet this morning is weighing on sentiment (Trump reinstituted steel and aluminum tariffs on Brazil and Argentina and that’s causing an uptick in general tariff anxiety in the market).
Today focus will (of course) remain on any trade tweet or headline, while the key economic report is the ISM Manufacturing PMI (E: 49.4), and the stronger the number, the better.