“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question” – Tom Essaye, The Sevens Report. Click here to read the full article.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question,” said Tom Essaye, founder of stock market analysis firm, Sevens Report Research, in a note to clients. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed while most international markets rallied overnight as investors remain optimistic about the “phase one” trade deal, continue to eye the fluid Brexit situation, and look ahead to the peak of earnings season.
There were no market-moving headlines overnight.
There are a lot of moving pieces in the market today between economic data and earnings.
On the data front, Existing Home Sales (E: 5.445M) is due out shortly after the open and then things will quiet down until the early afternoon when the Dallas Fed’s Kaplan speaks at 1:00 p.m. ET.
There is also a 10-Yr Treasury Note Auction at 1:00 p.m. ET. Yields have been steadily grinding higher in recent sessions, so strong demand (low yields) could weigh on stocks in the afternoon.
Switching to earnings, there are multiple consumer, defense, and transport companies reporting today including: LMT ($5.03), MCD ($2.20), PG ($1.24), UPS ($2.05), UTX ($2.03), JBLU ($0.53), TRV ($2.39).
For now, the trend in stocks is cautiously positive, but any of the catalysts above could potentially trigger a pullback given the tentative nature of the latest rally.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question,” 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 slightly higher on continued hopes of Brexit resolution and improvement in U.S./China trade relations.
The vote on the new Brexit deal was delayed in Parliament on Saturday, but it’s likely to happen today or tomorrow and passage of the deal is (narrowly) expected.
On U.S./China trade, Chinese Vice Premier Liu He made positive comments on U.S./China trade negotiations although he didn’t say anything new.
Today there are no economic reports and just one Fed speaker, Bowman (11;40 a.m. ET). So, the focus will be on Brexit headlines as a final vote on the Brexit deal in Parliament could happen later today. If the Brexit deal passes Parliament, we could see a short term rally, although again I don’t think Brexit resolution is enough, by itself, to send stocks sustainably higher from here.
Tom Essaye, founder of Sevens Report Research, said this week there are three reasons why the S&P 500 won’t be breaking out above its summer highs in the 3,027 range unless investors see better trade news:
The Phase I deal provided no relief from current trade war tariffs and it contained no provisions that would boost global growth from current levels. The December tariff increases are still in play, so the Phase I deal didn’t even eliminate market uncertainty over whether things could get worse from here.
Click here to read the full article.
What’s in Today’s Report:
Futures are little changed following mixed Chinese economic data.
Chinese GDP missed estimates at 6.0% vs. (E) 6.1%, while Retail Sales met expectations at 7.8% and Industrial Production beat (5.8% vs. (E) 4.9%). In sum, the data is slightly underwhelming but isn’t changing expectations for global growth.
Looking forward to today, there are no economic reports but there are a lot of Fed speakers including (in order of importance): Clarida (11:30 a.m. ET), George (10:00 a.m. ET), Kaplan (9:00 & 11 a.m. ET), Kashkari (10:30 a.m. ET). But, none of them should say anything too surprising and they shouldn’t move markets.
So, markets will stay focused on earnings and Brexit headlines. Regarding Brexit, a vote on the new Brexit deal will happen Saturday in Parliament, and at this point passage looks to be a 50/50 chance. So, there’s more drama yet in the three plus year Brexit saga.
Tom Essaye, founder of Sevens Report Research, said this week there are three reasons why the S&P 500 won’t be breaking out above its summer highs in the 3,027 range unless investors see better trade news:
The Phase I deal provided no relief from current trade war tariffs and it contained no provisions that would boost global growth from current levels. The December tariff increases are still in play, so the Phase I deal didn’t even eliminate market uncertainty over whether things could get worse from here.
What’s in Today’s Report:
Futures are modestly higher following news of a new Brexit agreement.
The EU and Britain have agreed to a new Brexit deal that solves the Northern Ireland border issue. However, it remains unclear if the deal can get through Parliament, and remember that Parliament killed the last Brexit agreement between Britain and the EU
Economically, British Retail Sales slightly missed estimates (flat vs. (E) 0.2%) but that’s not moving markets.
Today focus will be on earnings (some notable reports include MS: $1.10, PM: $1.35 and UNP: $2.29).
Additionally, there are several economic reports including (in order of importance): Philly Fed (E: 7.1), Industrial Production (E: -0.2%), Jobless Claims (E: 210k) and Housing Starts (E: 1.3M). Broadly speaking, the stronger the data, the better for stocks.
What’s in Today’s Report:
Stock futures declined overnight after China said it would take countermeasures to the passage of a pro-Hong Kong bill by the U.S. House, further complicating the U.S.-China trade relationship while hopes for a Brexit deal faded.
There were no market-moving economic reports overnight.
Today, there is one key economic report to watch: Retail Sales (E: 0.3%) and two second tiered reports due to be released: Business Inventories (0.3%) and the Housing Market Index (E: 68). There are also two Fed officials scheduled to speak: Evans (9:00 a.m. ET) and Brainard (3:00 p.m. ET) that could potentially move markets.
Investors will also be looking for any further developments on the latest escalation in tensions between the U.S. and China as the trade war remains a major influence on stocks and broader risk assets.
Shifting from macro to micro, the start of earnings season will continue today with BAC ($0.68), PNC ($2.80), ALLY ($0.98), USB ($1.11), and BK ($0.99) all reporting ahead of the bell while NFLX ($1.05), IBM ($2.64) and CSX ($1.01) will release results after the close.
