Sevens Report’s Tyler Richey quoted in MarketWatch on January 3, 2019
Sevens Report’s Tyler Richey quoted in MarketWatch on January 3, 2019. Read the full article here.
Jobs Report Preview
What’s in Today’s Report:
- Jobs Report Preview
- Is the AAPL Decline an Opportunity for Value Stocks?
Futures are down more than 1% as AAPL sharply cut Q4 revenue guidance.
AAPL cut Q4 revenue guidance to $84 bln from the previous $89-$93 bln range, citing slowing Chinese demand as the main negative influence.
Economically UK Construction PMI and Euro Zone Money supply both slightly missed expectations.
The entire tech sector will be in focus today to see how well it can hold up in the face of the AAPL news, which wasn’t a shock as analysts and suppliers have been cutting IPhone numbers for months. If stocks can set the lows early in the day and rally back, that would be an anecdotal sign near term selling pressure may be exhausted.
Away from AAPL, we get a lot of economic data today including (in order of importance): ISM Manufacturing Index (E: 57.9), ADP Employment Report (E: 175K), Jobless Claims (E: 217K) and Motor Vehicle Sales (E: 17.3M). Data today could be important because if the data is firm, it should decrease the AAPL fallout. However, if the data is weak, then it’s going to be another ugly day as the news will reinforce worries about corporate earnings and economic growth.
More Growth Fears
What’s in Today’s Report:
- The Aussie-Yen Points to Further Growth Fears
S&P futures are tracking international shares lower to start the year this morning as another set of soft economic data stoked fears of slowing global growth.
The Chinese Caixin Manufacturing PMI Index fell 0.5% to 49.7 in December suggesting the world’s second largest economy is slipping into contraction.
Meanwhile, the Eurozone PMI Manufacturing Index met expectations but dipped to a near two year low of 51.4.
In the U.S. today, there is one economic report to watch: PMI Manufacturing Index (E: 53.9) and there are no Fed officials scheduled to speak.
2019 Market Outlook
What’s in Today’s Report:
- 2019 Market Outlook
- Weekly Market Preview
- Weekly Economic Cheat Sheet (There are a lot of big reports this week)
Futures are higher on the final trading day of 2018 as a positive tweet on U.S./China trade is offsetting more weak Chinese economic data.
President Trump tweeted over the weekend that U.S./China trade talks were making “big progress,” raising expectations for a deal in early 2019.
Chinese economic data missed estimates as the December Manufacturing PMI dropped to 49.4 vs. (E) 50.0, signaling outright contraction. It was the lowest reading since 2016.
There are no notable economic reports or Fed speakers today so I’d expect end of year positioning to dominate trading.
Sevens Report’s Tom Essaye quoted in CNBC on December 26, 2018
Sevens Report’s Tom Essaye quoted in CNBC on December 26, 2018. Click here to read the entire article.
Valuation Update
What’s in Today’s Report:
- Valuation Update and a New “Fair Value” Trading Range
Futures are extending the late Thursday gains and are modestly higher thanks to momentum.
Economically, Japanese data disappointed as the Unemployment Rate (2.5% vs. (E ) 2.4%) and Retail Sales (1.4% vs. (E) 2.2%) missed expectations.
Today investors will see if the year-end bounce can continue. There are a few economic reports including International Trade in Goods (E: -$75.7B), Chicago PMI (E: 62.4) and Pending Home Sales Index (E: 1.5%) but none of those should move markets materially.
Was that the Bottom? (Technical Update)
What’s in Today’s Report:
- Technical Update: Was that the Bottom?
Futures are lower and giving back about 1/3 of yesterday’s massive rally on digestion and potentially negative U.S./China headlines. There was no notable economic data overnight.
The Trump administration is considering an executive order banning U.S. companies from using Huawei and ZTE products (both Chinese firms). This represents a potential escalation in ongoing U.S,/China tech/trade conflict, although so far China has viewed the trade and tech issues separately, and that needs to continue otherwise this market will face additional headwinds.
Today markets will try and digest yesterday’s massive rally with the best case scenario being a continued rally that sees the Dow and S&P 500 close above near resistance levels. Economically, we do get multiple reports including Jobless Claims (E: 217K), FHFA House Price Index (E: 0.2%), New Home Sales (E: 560K) and Consumer Confidence (E: 134.0) although none of those should move markets materially.
More Unforced Errors
What’s in Today’s Edition:
- More Unforced Errors
Stock futures are bouncing modestly this morning after the worst Christmas Eve selloff in history took place on Monday which saw all of the major indexes fall well over 2%.
News flows were mostly quiet over the last 48 hours however President Trump did make supportive comments regarding Secretary Mnuchin after he spooked markets Monday and continued to blame the Fed for the recent selloff.
There were no economic reports overnight.
There is not a lot on the calendar today as there are no Fed officials scheduled to speak and there is just one economic report to watch: S&P Corelogic Case-Shiller HPI (E: 0.4%).
As a result, investor focus will remain on U.S. politics and global growth as they have been the main reasons for the most recent stock declines.
Long Term Entry Point?
What’s in Today’s Report:
- Why I’m Buying Some Stock in My IRA Today
- Weekly Economic Cheat Sheet
- Weekly Market Preview
Futures are seeing a modest oversold bounce following a generally quiet weekend.
If there is a “reason’ for this modest bounce in futures it was the administration trying to reassure investors over the weekend. Treasury Secretary Mnuchin tried to calm markets by 1) Stating Trump knows he can’t fire Fed Chair Powell and 2) Calling the heads of major U.S. banks to ensure there were no liquidity problems (there weren’t).
There was no notable economic data or U.S./China trade updates over the weekend.
Today there are no economic reports and no Fed speakers, and the markets close early (1:00 p.m. ET).