“I’m getting concerned that the market is under-appreciating the risk that Trump loses,” said veteran trader and founder of Sevens Report Research Tom Essaye on Yahoo Finance’s The First Trade. Click here to watch the full interview.
What’s in Today’s Report:
Futures are solidly higher following a generally quiet night as markets again try to extend this week’s rally.
Economically, British Retail Sales were much stronger than expected, rising 12% vs (E) 6.5% and adding to the better than expected data this week.
New daily coronavirus cases continued to increase in the U.S., but markets for now continue to look past the recent uptick.
Today there are no notable economic reports, although there are multiple Fed speakers including: Powell (1:00 p.m. ET), Rosengren (10:15 a.m. ET), Quarles (12:00 p.m. ET), Mester (1:00 p.m. ET). But, given Powell’s testimony earlier this week, it’s unlikely any of the Fed officials say anything to materially move markets.
Finally, today is a “quad witch” quarterly options expiration, so we should expect big volumes and an uptick in volatility into the close.
“More broadly, market fundamentals have improved a lot since March, so we think fears of Thursday’s selloff igniting a March-like decline are not…” said Sevens Report Research founder Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower this morning following a risk-off night of trade thanks to ongoing concerns about rising COVID-19 infections in the U.S., Europe, and China.
There were no market moving economic reports overnight however the 7-day moving average of daily new cases of coronavirus in the U.S. reached a one-month high yesterday which is pressuring risk assets this morning.
It is lining up to be a busy morning as the BOE Meeting Announcement will hit at the top of the 7 o’clock hour (ET), before U.S. economic data kicks off at 8:30 a.m. ET with: Jobless Claims (E: 1.220M) and the Philadelphia Fed Business Outlook Survey (E: -22.7), and then after the bell, Leading Indicators (E: 1.7%) will be released.
There are also three Fed officials scheduled to speak today: Kashkari (E: 11:00 p.m. ET), Mester (12:15 p.m. ET), and Daly (7:00 p.m. ET) but investors have been largely focused on coronavirus headlines over the last 12-18 hours so any fresh developments on testing, new case trends, or treatments will likely move markets.
“Looking ahead, we expect some consolidation in oil prices here as economic data has been largely better than feared, while the future remains very uncertain regarding the prospects of a ‘second wave’ that could cripple the energy supply…” said Tyler Richey, co-editor at Sevens Report Research.
Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, points to the years after the financial crisis, when a liquidity explosion led to surges in asset prices — from stocks to bonds, real estate and gold. “If past is prologue, the lesson is that we need to admit that this amount of liquidity means that asset inflation…” he wrote to clients. Click here to read the full article.
What’s in Today’s Report:
Stock futures are rising with global equity markets amid positive developments on U.S.-China trade, rising hopes for a $1T infrastructure spending package in the U.S. and dovish details regarding the Fed’s bond-buying programs.
Economically, the German ZEW Survey for the month of June was better than expected helping lift EU shares.
Today, investors will be focused on economic data early with Retail Sales (E: 7.5%), Industrial Production (E: 2.9%), Business Inventories (E: -0.5%), and the Housing Market Index (E: 44.0) all due out before the open or shortly after the bell.
From there, attention will shift to Fed Chair Powell’s semiannual testimony before Congress which will begin at 10:00 a.m. ET as investors look for further clues regarding current stimulus programs and the Fed’s outlook for the economy in the coming quarters.
“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality,” Tom Essaye, founder of the Sevens Report, told CNBC. Click here to read the full article.
“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality. Just that reminder combined with a lot of the second wave…” Essaye told CNBC. —Li
Click here to read the full article.
What’s in Today’s Report:
Futures are sharply lower on rising coronavirus concerns, as cases continued to rise in the U.S. over the weekend.
Certain states (CA/TX/FL/AZ) continue to see an acceleration in new coronavirus cases, although national new cases remain around 20k (where they’ve been for weeks).
Chinese economic data was slightly disappointing as Industrial Production (4.4% vs. (E) 5%), Retail Sales (-2.8% vs. (E) -2.33%) and Fixed Asset Investment all missed expectations.
Today focus will be on that 3,002 low in the S&P 500 from Thursday. If that’s broken, a run down towards 2900 becomes much more likely. Economically, the June Empire Manufacturing Survey (E: 30) is the key number today because it is the first look at June data, and the market will want to see continued improvement from May. There’s also one Fed speaker today, Kaplan (11:00 am E.T.), but he’s unlikely to move markets given Powell is speaking tomorrow.
