Was the Fed a Bullish Gamechanger?

/in /by

What’s in Today’s Report:

  • Was the Fed a Bullish Gamechanger? No, Here’s Why.
  • FOMC Takeaways
  • EIA Analysis and Oil Update

Stock futures are little changed this morning and international markets were mixed overnight amid quiet newswires as yesterday’s Fed decision was digested against a slew of bad corporate commentary so far this week.

Economically, U.K. Retail Sales were 0.4% vs. (E) -0.3% last month, helping the FTSE outperform ahead of the BOE Announcement due later this morning.

Today, the calendar is slightly busy in the morning with several economic reports scheduled to be released: Jobless Claims (E: 225K), Philadelphia Fed Business Outlook Survey (E: 4.4), and Leading Indicators (E: 0.1%), while no Fed officials are scheduled to speak.

That will leave the market primarily in digestion mode in the wake of the Fed and for stocks to meaningfully rally from here, we will need to see the yield curve steepen and the dollar continue to decline, otherwise, the S&P will have trouble breaking back above 2850.

Tom Essaye Quoted in Benzinga on March 20, 2019

/in /by

What Is The Value Of The FOMC Minutes? Tom Essaye Quoted in Benzinga to share his view on the recent Fed meeting and it’s effect on markets. “This Fed meeting is critically important for markets because…” Click here to read the full article.

Tom Essaye Quoted in Barron’s on March 20, 2019

/in /by

Tom Essaye Quoted in Barron’s on March 20, 2019. “The single most prominent bullish influence on stocks right now is the dovish Fed, and the run to fresh five-month…” Click here to read full article.

Never Fight the Fed

/in /by

What’s in Today’s Report:

  • Never Ever Fight the Fed

Stock futures, the dollar, and Treasuries are all little changed this morning while international markets were mixed overnight as investors focus on the Fed today.

There were no market moving economic reports o/n although rising trade tensions between the U.S. and China and several bad earnings reports citing slowing global trade (especially FDX) have become a growing headwind for risk assets since yesterday’s close.

With focus on the Fed this afternoon, it is likely to be a quiet morning with price action dictated by positioning into the announcement. The one release that could move markets this morning is the Weekly EIA Inventory Report which will print at 10:30 a.m. ET (E: +800K bbls).

Turning to 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.

To recap, the two key developments to look for from the Fed are balance sheet reductions and fewer rate hikes in 2019 (the dot plot). The market’s expectations of a very dovish Fed are extremely high right now, so there is not much room for error by the FOMC today and any sort of disappointment could spark a wave of volatility across asset classes.

FOMC Preview

/in /by

What’s in Today’s Report:

  • FOMC Preview

U.S. futures are higher this morning as trader focus turns to the Fed meeting while good economic data in Europe helped drive gains in international markets overnight.

U.K. unemployment fell to a multi-decade low of 3.9% in February according to the latest Labour Market report while the Business Expectations component of the German ZEW Survey was –3.6 vs. (E) -11.0 underscoring a less pessimistic outlook on the economy by analysts.

A sense of “Fed paralysis” has already begun to fall over markets this week as the FOMC meeting begins today and trader focus has largely shifted to tomorrow’s announcement and press conference.

As far as catalysts go today, there is one economic report: Factory Orders (E: 0.1%) but the single data point’s influence on the market is likely to be limited with the Fed looming tomorrow.

Tom Essaye Quoted in Barron’s on March 9, 2019

/in /by

The Dow Is Set to Drop Because Boeing Is Still a Problem

But for now, there’s nothing, and it just might stay that way. “Unless we get a surprise U.S./China trade headline (and chatter there seems to be…” Click here to read the article.

Tom Essaye Quoted in CNBC on March 15, 2019

/in /by

“One of the unique parts about the decade-long bull market is that it’s been driven by a couple different things in its life,…” Click here to read the full article.

Tyler Richey of the Sevens Report Quoted in Heffx on March 18, 2019

/in /by

“Domestic crude oil production slipped for the first time this year … meanwhile, net imports remained suppressed,” with U.S. sanctions on Venezuela being the primary driver of the import decline. On Wednesday, the Energy Information Administration reported that U.S. crude supplies unexpectedly…” Click here to read the article.

What Caused Last Week’s Rally (And Can It Continue?)

/in /by

What’s in Today’s Report:

  • Justification For Last Week’s Rally?
  • Market Internals – Not As Strong As You’d Think
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are only slightly lower despite disappointing U.S./China trade headlines over the weekend and more underwhelming global economic data.

The South China Morning Post reported that a Trump/Xi trade summit (to end the trade war) might not happen until June, later than the current April expectation, as talks on key issues continue to drag out.

Global economic data remained underwhelming as Japanese exports missed expectations, falling –1.2% vs. (E) 0.7%.

Today there is only one economic report, Housing Market Index (E: 63.0), and no Fed speakers (they’re in the blackout period ahead of Wednesday’s meeting) so unless we get a surprise U.S./China trade headline (and chatter there seems to be rising following the weekend) I’d expect digestion of last week’s big rally.

A Glass Half Full Market

/in /by

What’s in Today’s Report:

  • Why This Is a Glass Half Full Market (For Now)
  • Why GE and Chinese Economic Data Were Important Yesterday

Our regular editor is out today so my apologies for any uptick in typos.

Futures are modestly higher following more optimistic chatter on U.S./China trade and Chinese economic growth.

Chinese officials again reiterated support for their economy overnight and that, combined with renewed optimism for a U.S./China trade deal, sent futures higher.  But, I do want to point out that nothing materially new happened overnight – it was jus more of the same commentary we’ve seen for the past month or so.

There were no notable economic reports overnight.

Today focus will be on economic data as we get our first look at March activity via the Empire State Manufacturing Survey (E: 10.0) along with Industrial Production (E: 0.4%), Consumer Sentiment E: 95.0) and January JOLTS (E: 7.155M).  Again, the stronger the data, the better for stocks.

Finally, today is “Quadruple Witching” options expiration so don’t be surprised by some volatility, especially into the close.