“We will start to get results from some of the big multi-national industrials and tech firms, which should shed more light on the effects of the trade war…” Tom Essaye who founded “The Sevens Report” newsletter, wrote in a note to clients. Click here to read the full article.
“Another draw in oil stocks, especially one larger than estimated, would be an incrementally bullish development for this currently sideways energy market,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
S&P futures are climbing this morning, tracking gains in overseas markets as investors digest positive trade war headlines from Monday and better-than-feared earnings to kick off a very busy week of the Q2 reporting season.
There were no notable economic reports overnight and macro news was limited.
Looking into today’s session, focus will be on the micro as earnings season picks up however there are two economic data points on the housing market: FHFA House Price Index (E: 0.3%) and Existing Home Sales (E: 5.340M). Meanwhile there are no Fed officials scheduled to speak.
In the bond market, there is a 2-Year T-Note Auction today at 1:00 p.m. ET which could affect the yield curve. If we see the curve flatten further as it did last week, that could weigh on stocks again but contrarily, if we see the 10s-2s widen back out towards 30 basis points, that should support stocks broadly.
Earnings remain in the spotlight this week with notable reports coming from: KO ($0.62), LMT ($4.74), BIIB ($7.58), UTX ($2.04), JBLU ($0.57), and TRV ($2.32) ahead of the bell, while SNAP (-$0.10) and V ($1.33) will report after the close.
Tom Essaye, founder of the Sevens Report Research, agrees: “The biggest takeaway for regular investors is you’ve got to look inside the ETF and see where they’re allocated.”
Individual Markets Benefiting
Essaye says two emerging market ETFs are benefiting from the trade war concerns: The VanEck Vectors Vietnam ETF (VNM) and the iShares MSCI Thailand ETF (THD), which were outpacing broad-based emerging market ETFs as…Click here to read the full article.
Tom Essaye sat down with Jill Malandrino to discuss the macro picture of the market, earnings season, what the market is expecting, Federal rate cut and more. Watch the full interview below..
What’s in Today’s Report:
Futures are slightly higher on positive U.S.-China trade headlines following an otherwise quiet weekend.
Tech firms will meet today with administration officials to discuss the Huawei tech ban, while multiple reports stated China will increase soybean purchases and a face to face meeting between Chinese & U.S. officials could occur soon.
Fed policy expectations continue to shift back to a 25 basis point rate cut next week as hope for a 50 basis point cut continues to recede.
Today there are no economic reports and no Fed speakers as we enter the “quiet period” ahead of next Wednesday’s rate decision. So, there’s not much on the calendar today that could cause volatility, although headlines from the tech company/administration meeting today on Huawei is something to watch, as any hints at relaxing of the ban will be a mild positive for stocks. Earnings are sparse today as well although I’ll be watching Whirlpool (WHR $3.80) results after the close for any insight into the state of the U.S. consumer.
What’s in Today’s Report:
Stock futures are flat to slightly higher this morning as investors continue to digest mixed earnings reports, incremental progress between the U.S. and China on trade, and yesterday’s very dovish Fed chatter.
U.S. and Chinese officials held phone conversations last night and it appears more face-to-face meetings are likely in the near term, underscored by a near 2% rally in copper this morning.
Looking into today’s session, there is one economic report to watch: Consumer Sentiment (E: 98.6) and two Fed officials are scheduled to speak: Bullard (11:05 a.m. ET) and Rosengren (4:30 p.m. ET).
Earnings will remain in focus as there are several notable companies releasing Q2 results before the bell: BLK ($6.52), KSU ($1.61), AXP ($2.05), and SYF ($0.96), but yesterday’s rally was all about dovish Fed expectations so investors will be watching for any further clues as to whether the Fed will cut by 25 or 50 basis points at the July FOMC meeting.
“Si miramos esta temporada de resultados, la pregunta clave es: ¿llevará la incertidumbre en materia comercial a que las empresas frenen sus inversiones y reduzcan sus gastos…” se planteó el experto Tom Essaye, fundador de Sevens Report.
“Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pull back on spending and investment enough so that it begins to weigh on earnings?” Tom Essaye, founder of the Sevens Report, said in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower this morning as the market digests several disappointing earnings releases (notably CSX and NFLX) while U.S.-China trade concerns linger after multiple negative news articles were released overnight.
Economically, U.K. Retail Sales beat (1.0% vs. E: -0.3%), which is helping the pound recover from fresh 2019 lows.
News flow will remain steady today with two economic reports to watch: Jobless Claims (E: 215K) and Philadelphia Fed Business Outlook Survey (E: 4.5) while there is one Fed official scheduled to speak: Williams (2:15 p.m. ET).
Over the last 24-36 hours, earnings became a more significant driver of the broader stock market so today’s corporate results will be important to watch. Before the bell UNH ($3.46), MS ($1.13), HON ($2.08), and UNP ($2.12) all release results and MSFT ($1.21), and COF ($2.84) will report after the bell.