What The Actual Phase One Deal Means for Markets

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What’s in Today’s Report:

  • What The Actual Phase One Deal Means for Markets
  • January Economic Breaker Panel
  • EIA Analysis and Oil Update

Futures are modestly higher following a quiet night of news as markets continued to digest that the actual text of the phase one trade deal largely meet expectations.

Economic data was sparse as the only report was German CPI and it met estimates at 1.5% yoy.

Today focus will be on economic data and earnings, as there are several important economic reports including (in order of importance):  Retail Sales (E: 0.3%), Philly Fed (E: 3.4), Jobless Claims (E: 214K), and Housing Market Index (E: 75). There is also one Fed speaker, Bowman (10:00 a.m. ET), but he shouldn’t move markets.

On the earnings front, results have been mixed so far this week, and focus will turn more towards earnings now that phase one is a done deal. Some important reports we’ll be watching today include: MS ($0.98), SCHW ($0.64), BK ($0.99), TSM ($0.72), CSX ($0.97), PPG ($1.35).

Tom Essaye Quoted in Money and Markets on January 14, 2020

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Tom Essaye, president of the Sevens Report, said in a note to clients that the near 10% rally the S&P 500 pulled off in the fourth quarter of last year was driven by the idea that “the U.S.-China trade truce combined with global central bank easing (and specifically the Fed being very dovish)…” as reported by MarketWatch. Click here to read the full article.

Trade Deal Preview

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What’s in Today’s Report:

  • U.S.-China Signing Ceremony: Could There Be a “Sell the News” Reaction?

Futures are slightly lower while international equity markets were little changed overnight as investors look ahead to the signing ceremony of the phase-one trade deal between the U.S. and China and await more earnings.

Economically, Eurozone Industrial Production for the month of November was a mild miss coming in at 0.2% vs. (E) 0.3% which is modestly weighing on EU shares today.

Looking into today’s session, there are two economic reports to watch: PPI (E: 0.2%) and Empire State Manufacturing Index (E: 3.5) and two Fed officials are scheduled to speak: Harker (11:00 a.m. ET) and Kaplan (12:00 p.m. ET).

Investors however will remain focused on earnings with: BAC ($0.74), UNH ($3.90), GS ($5.20), and BLK ($7.67) all due to release results this morning.

Insight from a Wall Street Legend

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What’s in Today’s Report:

  • Insight from a Wall Street Legend
  • Another Tipping Point for the Yield Curve

International markets were mixed overnight and stock futures are slightly lower as investors digest Chinese trade data and look ahead to the start of earnings season.

Final Chinese trade data from 2019 revealed a rise of just 0.5% in exports while imports dropped 2.8% on the year versus double digit gains in each in 2018. The trade figures underscore the detrimental effects of the trade war on the Chinese and broader global economies.

Looking into today’s session, focus will be on the unofficial start to earnings season as several major corporations are due to report, including three big banks: JPM ($2.32), DAL ($1.40), C ($1.82), and WFC ($1.12).

Beyond earnings, there is one key economic report to watch: CPI (E: 0.3%), while two Fed officials are scheduled to speak: Williams (9:00 a.m. ET) and George (E: 1:00 p.m. ET).

Tom Essaye Quoted in Bloomberg on January 9, 2020

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For investors, the wage number will be the key point in this report, said Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter. Assuming annual pay gains hold around 3.1% and hiring is strong, stocks should rally: “The market will love it because…” he said. Click here to read the full article.

Job Seekers in a line

The First Two Important Events of the Year (Both This Week)

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What’s in Today’s Report:

  • The First Two Important Events of 2020 (Both This Week)
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet (Important Updates on Growth)

Futures are moderately higher following a quiet weekend and ahead of two important events this week:  Phase one signing ceremony (Wed) and the start of earnings season.  Futures are essentially recouping Friday’s losses.

U.S./China trade optimism is helping stocks rally as the U.S. and China will resume semi-annual meetings, something that was done in the Bush/Obama administrations.   This doesn’t impact trade directly, but just like in 2019, any generically positive U.S./China headline will result in at least a mild rally.

Economic data was soft as British GDP (-0.3% vs. (E) 0.0%) and manufacturing (-1.7% vs. (E) -0.3%) both missed estimates, although the soft data is only weighing on the Pound.

Today there are no notable economic reports and just two Fed speakers, Rosengren (10:00 a.m. ET) and Bostic (12:40 a.m. ET), and they won’t move markets.  So, investors will be looking for any hints as to what will be released at the U.S./China phase one signing ceremony on Wednesday, and the more specifics, the better.

Tyler Richey co-editor at Sevens Report Research Quoted in MarketWatch on January 10, 2020

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“The geopolitical fear bid supporting the gains in the energy markets in the front half of the week vanished much quicker than most analysts anticipated…” says Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Gas handle

Sevens Report Co-editor Tyler Richey Quoted in Barron’s on January 10, 2020

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“The geopolitical fear bid supporting the gains in the energy markets in the front half of the week vanished much quicker than most analysts anticipated…” says Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Gas tank

Tom Essaye Quoted in San Francisco Chronicle on January 9, 2020

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For investors, the wage number will be the key point in this report, said Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter. Assuming annual pay gains hold around 3.1% and hiring is strong, stocks should rally: “The market will love it because…” he said. Click here to read the full article.

Tom Essaye Headshot

Jobs Day

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What’s in Today’s Report:

  • Key Levels To Watch in the Dollar Index and 10 Year Yield (Post Jobs Report)
  • Jobs Report Preview (Abbreviated Version)

Futures are solidly higher again following another quiet night as momentum continues to push the market to fresh highs, ahead of the jobs report.

There was no new geopolitical news overnight and international focus has now turned to whether the Ukrainian flight was hit by an Iranian missile.  That shift in focus is helping tensions to recede further.

Economic data was sparse as Japanese Household Spending missed estimates while Aussie Retail Sales beat expectations, but neither number is moving markets.

Today the key number is the Jobs Report, and expectations are as follows:  Jobs 158K, UE Rate 3.5%, Wages 0.3%/3.1%.  The key number is the wage data, but unless we see wages spike close to, or above 3.5% y/y, then the jobs report shouldn’t derail the rally.