Sevens Report’s Tom Essaye quoted in The Wall Street Journal on December 12, 2018
Sevens Report’s Tom Essaye quoted in The Wall Street Journal on December 12, 2018. Read the full article here.
Sevens Report’s Tom Essaye quoted in Barron’s on December 12, 2018
Sevens Report’s Tom Essaye quoted in Barron’s on December 12, 2018. Read the full article here.
Sevens Report’s Tom Essaye quoted in Barron’s on December 13, 2018
Tom Essaye quoted in Barron’s on December 13, 2018. Read the full article here.
Sevens Report’s Tom Essaye appeared on Cheddar on December 12, 2018
Sevens Report’s Tom Essaye appeared on Cheddar on December 12, 2018. He breaks down how Trump’s optimism on trade talks, and impacted the markets.
Watch the entire clip here.
Bounce Coming?
What’s in Today’s Report:
- Why We Could Be Close to a Bounce
Futures are modestly lower following the surprise resignation of Defense Secretary Mattis.
Mattis was seen as a stabilizing force in the administration, so his resignation is an incremental negative on general sentiment and that’s pressuring stocks this morning.
Economically, Q3 British GDP met expectations at 0.6%.
Today there is a lot of important economic data including (in order of importance): Durable Goods (E: 1.4%), Core PCE Price Index (E: 0.2%), Final Q3 GDP (E: 3.5%) and Consumer Sentiment (E: 97.5). The key numbers will be the Core PCE Price Index (it needs to stay around 2.00%) and Durable Goods (they need to be stable) as they can give us a stock positive “Goldilocks” outcome.
Additionally, Fed Governor Williams will by on CNBC at 10:00 a.m., and if he’s dovish that might help stocks rally.
Finally, today is quadruple witching options expiration.
FOMC Takeaways (Not Good)
What’s in Today’s Report:
- FOMC Decision Takeaways – Not Good.
Futures are slightly higher as markets bounce following Wednesday’s post Fed selloff.
It was a quiet night of news as there were no new headlines on trade, and most commentary focused on the takeaways of the Fed decision.
Economically, UK data was mixed as Nov. Retail Sales were strong (1.4% vs. (E) 0.3%) while Dec. Distributive Trades were weak (-13 vs. (E) 15).
Today focus will remain on the economic data, which becomes even more important in the face of the not dovish enough Fed. We get to notable reports today, Jobless Claims (E: 220K) and Philadelphia Fed Business Outlook Survey (E: 16.5) and if the later misses expectations, look for more selling.
FOMC Preview
What’s in Today’s Report:
- FOMC Preview
US stock futures are enjoying a pre-Fed bounce this morning due to positioning and short-covering as stocks remain oversold after the steep losses Friday and Monday.
Despite the bounce in futures, news flows were actually bearish since yesterday’s close as both FDX and MU made cautious comments about slowing global growth in their respective earnings calls and both cut guidance for 2019.
In the US today, there is one economic report due to be released: Existing Home Sales (E: 5.190M) and a “beat” would be well received after the string of soft housing data points of recent, but frankly all eyes will be on the Fed and the report will not materially move markets.
The New York session is likely to be slow in the morning with traders positioning into the Fed. The FOMC Meeting Announcement and Forecasts will hit at 2:00 p.m. ET and then Fed Chair Powell’s press conference is scheduled for 2:30 p.m. ET.
Technical Update: Ugly Breaks
What’s in Today’s Report:
- Technical Update: Ugly Breaks
S&P futures are bouncing this morning but only modestly so relative to yesterday’s sizeable declines in U.S. markets which weighed broadly on global shares overnight (although the losses were not as bad as feared).
Growth concerns remain the primary driver of the recent risk-off money flows and the German Ifo Survey released o/n did not help as the headline missed estimates and Business Expectations hit a four year low.
Oil is notably down almost 3% as concerns have shifted from the supply side to demand side in recent weeks and if that continues, expect further pressure on energy shares today.
Looking into today’s session, there is only one economic report to watch: Housing Starts (E: 1.22M) but if it is a “whiff” like yesterday’s Housing Market Index was, which hit a multi-year low, it could keep growth concerns elevated and prevent a material relief rally.
Aside from the one economic report, the Fed meeting begins today and investor focus is likely to turn ahead to tomorrow’s FOMC Announcement, Forecasts, and Press Conference which is one of the last major catalysts of the year.
A New Headwind on Stocks
What’s in Today’s Report:
- A New Headwind on Stocks (It’s Potentially a Big One)
- It’s Not All Bad – A Legitimate Positive Scenario for Q1 ‘19
- Weekly Market Preview
- Weekly Economic Cheat Sheet
Futures are slightly lower as markets digest Friday’s selloff following a quiet weekend.
There was no notable geo-political (i.e. U.S./China trade) or economic (global growth) news over the weekend, and investors/markets are looking ahead to Wednesday’s FOMC Decision.
Economic data was sparse but EU Core HICP (their CPI) met expectations at 1.0% yoy.
We get two economic numbers this morning via the Empire State Manufacturing Survey (E: 21.0) and Housing Market Index (E: 61.0) but neither should move markets. Investors will be looking ahead to Wednesday’s big FOMC Decision and that should lead to generally quiet trading, barring any surprise headlines or tweets. More broadly, for stocks to bounce in the near term, we need to see leadership from the tech sector, and participation from financials and energy (both of which are very, very oversold).
Political Risks to this Market
What’s in Today’s Report:
- Political Risks to This Market
Futures are sharply lower (about 1%) as bad economic data is furthering worries about a slowdown in global growth.
Chinese Retail Sales (8.1% vs. (E) 9.0%) and Industrial Production (5.4% vs. (E) 5.9%) both badly missed estimates.
In Europe, the flash composite PMIs also missed expectations at 51.3 vs. (E) 52.5.
Geopolitically it was a quiet night although Chinese officials confirmed the reduction of auto tariffs to 15% from 40% (this was already pledged but it is good to see it will be enacted on Jan 1.).
Today it’s all about economic data. The numbers from China and the EU this morning were not good and fears of a global economic slowdown are rising, and we need Retail Sales (E: 0.1%) and Industrial Production (E: 0.3%) to push back on that narrative, otherwise today could be another ugly day.