7 Things Need to Happen For Stocks to Move Higher
Tom Essaye, founder of Sevens Report Research, recently compiled this list of seven things that need to happen for the market to make it back to new highs this year. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly weaker following a generally quiet weekend as markets digest last week’s rally.
Economic data was mixed and is putting mild pressure on stocks this morning as German exports missed expectations (-1.3% vs. (E) 0.1%), reminding markets the global economy isn’t healed yet.
U.S./China trade talks ended last week without an announcement of a deal but talks will continue this week via video-conference and a deal is still widely expected.
Today there are no economic reports and no Fed speakers, so focus will remain on any U.S./China headlines (again a deal could be announced any minute). But, barring any surprises today should be generally quiet as the big events of the week (FOMC Minutes, Chinese data, bank earnings) happen Wed-Friday.
Tom Essaye appeared on Reuters on April 4, 2019. Great interview with Fred Katayama discussing the “goldilocks number” for the March jobs report. Click here to watch the full interview.
The Dow Rose 39 Points After a Late Comeback
Economic data clearly remain soft on an absolute level, wrote Tom Essaye of Sevens Report on Wednesday. “There is now a laundry list of economic indicators that are flashing their worst readings since 2016…” Click here to read the full article.
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night as markets wait for this morning’s jobs report.
President Trump said he hoped the U.S./China trade deal would be done in the next four weeks, which again generally meets markets expectations.
Economic data was sparse but German Industrial Production rose 0.7% vs. (E) 0.5%, somewhat offsetting Thursday’s disappointing German Manufacturers’ Orders report.
Today the focus will be on the jobs report and the expectations are as follows: Jobs Adds 170K, UE Rate 3.8%, Wages 3.4% yoy.
The best outcome for stocks today would be a jobs number in the mid 100k range (not too strong, but not too weak), positive revisions to the February data and a wage number below 3.5% yoy. That outcome likely can spark a further rally. Conversely, any extremes on the job adds (very good or very bad) along with another hot wage number may lead to profit taking in stocks on fears of slowing growth or a more hawkish Fed.
Tom Essaye, Sevens Report Founder and President, says we shouldn’t expect a potential U.S.-China trade deal “to create a lasting rally” for the markets. Yahoo Finance’s Alexis Christoforous speaks to him, Brian Sozzi and Brian Cheung. Click here to watch the full interview.
What’s in Today’s Report:
Futures are slightly lower despite more positive U.S./China headlines as markets digest this week’s rally.
The WSJ reported a U.S./China trade deal is now very close, with an announcement of a signing ceremony possibly coming as early as today. But, the reason this headline didn’t cause a rally is because it’s been expected for some time. The key going forward is how quickly tariffs are reduced, and the sooner, the better for stocks.
Economic data was sparse but German Factory Orders dropped –4.2% vs. (E) 0.3% but that number isn’t enough to offset the other good data this week.
Today is generally quiet on the data front as we only get Jobless Claims (E: 216K). There are three Fed speakers today: Williams (9:00 a.m. ET), Harker (1:00 p.m. ET), Mester (1:00 p.m. ET) but unless they say something surprising they shouldn’t move markets.
So, absent any other catalysts, China headlines will likely be the main influence on stocks today as an official headline about a signing ceremony could cause a very short term algo-led rally, but until we find out when tariffs will be rescinded, the U.S./China news likely won’t be enough to power the market materially higher from here.
“Futures are flat and international shares were mildly higher overnight as yesterday’s sizeable rally in the U.S. was…” Click here to read the full article.
What’s in Today’s Report:
Futures are solidly higher this morning, tracking gains in international markets led by Chinese shares thanks to strong economic data and more progress on trade.
Several news outlets reported overnight that up to 90% of a trade deal is done as China’s vice premier Liu He travels to D.C. to continue mid-high level trade talks today.
Economically, the Caixin Chinese Service PMI beat expectations jumping to 54.4 in March, a 14 month high, while the EU Service PMI rose to 53.3 vs. (E) 52.7. Both releases helped ease concerns about recently underwhelming economic data.
Looking into today’s session, there are a few catalysts to watch for. First, the ADP Employment Report (E: 165K) will be releases ahead of the open, kicking off “jobs week” in the U.S. and then the ISM Non-Manufacturing Index (E: 58.0) will hit shortly after the bell. Investors will look for both of these numbers to track the encouraging releases overseas last night.
Additionally, there is one Fed speaker before the open: Bostic (8:30 a.m. ET) and Kashkari will speak after the close (5:00 p.m. ET). Lastly, with U.S.-China trade optimism driving a good portion of the pre-market gains, any news out of Washington will have the potential to materially move markets today.
What’s in Today’s Report:
Futures are flat and international shares were mildly higher overnight as yesterday’s sizeable rally in the U.S. was digested amid a slight pullback in bond yields.
The Reserve Bank of Australia was the latest central bank to note downside risks in the global economy overnight.
Economically, Eurozone PPI was a mild miss: 0.1% vs. (E) 0.2% in February but inflation has been subdued and the report does not change the outlook for ECB policy.
Today, Motor Vehicle Sales (E: 16.8M) will begin to come in over the course of the morning while there is one notable economic report ahead of the open: Durable Goods Orders (E: -1.8%). There are no Fed speakers today.
With a lack of material catalysts between now and Friday’s jobs report, macro focus will be on U.S. – China trade negotiations and the bond market. If Treasury yields revisit last week’s lows, stocks will have a hard time holding the strong gains of the last few sessions, so watch bonds closely.