Tom Essaye, president of the Sevens Report, said in a Thursday note to clients that trade on Wednesday “somewhat shockingly saw outright gains by China ETFs and emerging market ETFs along with banks. That flies in the face of…” click here to read the full article.
What’s in Today’s Report:
Futures are down 1% as President Trump announced tariffs against Mexican imports in response to the border crisis, while Chinese economic data missed expectations.
Trump announced a 5% tariff on Mexican imports in June and rising each month there after until they hit 25%.
The March Chinese manufacturing PMI missed estimates at 49.4 vs. (E) 49.9 adding to global growth worries.
Today the key number is the Core PCE Price Index (E: 1.6% yoy) and if that number prints stronger than estimates, expectations for a Fed rate cut will drop further and given everything else happening today, markets could get ugly. Conversely, a soft inflation number will increase calls for a rate cut, and stocks could steady on that news.
The other key event today is a speech by New York Fed President Williams, and markets will want to see if he has a dovish tone following the tariff announcement and recent soft data (if he does, that’s a positive).
Tyler Richey, co-editor of the Sevens Report sat down with Ben Lichtenstein from TD Ameritrade Network to talk about oil, corn futures, energy market and more…Click here to watch the full interview.
The bond market is once again sending a big fat warning sign about the US economy. “For stocks to continue to rally we need to see higher Treasury yields driven by hopes for better growth…” said Tom Essaye, editor of the Sevens Report.
What’s in Today’s Report:
Futures are enjoying a modest oversold bounce following a quiet night of news.
There was no new trade news or notable economic data overnight.
Sentiment has turned negative very quickly this week, despite the lack of any incremental bad news (so far) and this morning we’re seeing stocks attempt to bounce.
There are multiple economic reports today including (in order of importance): Revised Q1 GDP (E: 3.0%), Jobless Claims (E: 215K), Pending Home Sales Index (E: 0.5%) and International Trade in Goods (E: -$71.9B).
But, the most important event of the day will be a speech by Fed Vice Chair Clarida at 12:00 p.m. ET, and the key here will be whether he sounds more open to a preventative rate cut, or whether he reaffirms the Fed’s “transitory” view of low inflation. The former will be positive for stocks, the later will be negative.
What’s in Today’s Report:
Stock futures are trading solidly lower this morning as global bond yields continue to drop sharply amid ongoing trade war worries and increasing global growth concerns.
There were no major trade war developments o/n but China reiterated their threat of cutting rare earth exports to the U.S. which further dampened investor sentiment.
The only notable economic report overnight was the German Unemployment Rate which edged up to 5.0% vs. (E) 4.9%.
Looking into today’s session, there are no economic reports due to be released and no Fed officials are scheduled to speak.
There is a 7-Yr. T-Note Auction at 1 p.m. ET however, and if demand is as strong as yesterday’s Treasury auctions, stocks could remain under pressure and the S&P would likely break key psychological support at 2,800.
The Federal Reserve has been on cruise control thus far in 2019 with respect to interest rate policy, opting to keep the federal funds rate untouched. However, the bond markets are screaming for a rate cut, according to Sevens Report Research. Click here to read the full article.
“There was a violent repricing of risk on Thursday after the rather disappointing global Flash PMIs discounted the argument that solid growth will continue to…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following a generally quiet three day weekend, as investors digest last week’s deterioration in economic data and U.S.-China trade relations.
Economic data was sparse overnight and the only notable report was German GfK Consumer Climate, which slightly missed expectations (10.1 vs. (E ) 10.4). There was no material economic data out Monday.
On trade, Trump’s trip to Japan was a general non-event and there were no new developments (positive or negative) on U.S.-China trade.
Today we have a few housing numbers including Cash-Shiller HPI (E: 2.5% y/y) and FHFA HPI (E: 0.3% m/m) as well as Consumer Confidence (E: 129.8), but none of those should move markets materially.
Instead, focus will be on the news wires for any updates on U.S. – China trade and on support in the S&P 500 at 2800, which is becoming an increasingly important level.
What’s in Today’s Report:
Futures are bouncing modestly following some hopeful comments by President Trump on U.S.-China trade.
Late yesterday President Trump made comments expressing optimism about an eventual U.S.-China trade deal that includes a solution for Huawei. No specifics or new details were provided, however.
Brexit entered a new phase as PM May announced she will resign on June 7th. But, until a “No Deal” becomes more likely, the global markets will continue ignore Brexit.
Today focus will be on Durable Goods Orders (E: -2.0%) and support at 2800 in the S&P 500. Yesterday that support level held and that’s a key number to watch going forward, as a violation of 2800 could open up an “air pocket” in stocks.
Regarding Durable Goods, it’d be nice if the data was solid, but it’s an April number so it won’t reflect activity following the flare up of U.S.-China trade tensions, and the headline is likely to be negatively skewed by cancellations for the 737, which started last month.