Sevens Report’s Tom Essaye quoted in CNBC on February 13, 2019.
“Markets always assumed the March 1 trade deadline was flexible, but this just confirmed it. Bottom line, the fundamentals are roughly balanced right now as there is…” Click here to read the full article.
What’s in Today’s Report:
Money flows were risk-on overnight thanks to continued trade-war optimism but stock futures are off the highs following more soft economic data overseas.
Trump said he would push back the March 1st tariff deadline, which was previously considered a “hard date,” if there is “good progress” towards a trade deal at that time while President Xi is now expected to attend talks on Friday. Both are incremental positives for the prospects of a successful deal.
Economic data out overnight was less optimistic however. EU Industrial Production fell –4.2% vs. (E) -3.2% Y/Y in December which is just the latest release fueling concerns about a global economic slowdown.
Today, the January CPI Report (E: 0.1%) will be watched closely ahead of the open while there are several Fed speakers before lunch: Bostic (7:15 a.m. ET), Mester (8:50 a.m. ET), Harker (12:00 p.m. ET).
The major focus of the market right now however remains the trade negotiations in Beijing and stocks will be most sensitive to any material headlines regarding the ongoing talks.
What’s in Today’s Report:
Futures are decidedly higher after Congress reached a deal to avert another government shutdown late yesterday and investors remain optimistic about trade talks between the US and China as negotiations in Beijing continue this week.
The NFIB Small Business Optimism Index fell to 101.2 vs. (E) 103 in January underscoring business owners’ uncertain outlook on the economy.
Today, there is one economic report: December JOLTS (E: 6.950M) and several Fed speakers to watch: Powell (12:45 p.m. ET), George (5:30 p.m. ET), and Mester (6:30 p.m. ET).
As long as Powell does not change his recent narrative when he speaks over the lunch hour, investors will likely remain focused on additional updates regarding the new funding deal lawmakers agreed to late Monday and more importantly, the ongoing trade talks in Beijing.
A lot of the good news out there is already priced into stocks at these levels,” wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients. “At 2,700 or higher, the S&P 500 isn’t priced for perfection, but…” Read the full article here.
What’s in Today’s Report:
Futures and global markets are moderately higher following positive reports on U.S./China trade and the potential for economic stimulus in the EU.
Reuters and Axios both had positive U.S./China trade articles this morning, with Axios reporting Trump & Chinese President Xi may meet in mid-March in Florida. That’s particularly notable because it’s assumed the two leader’s won’t meet until a trade deal is effectively done. So, if the report proves to be true, there’s an end in sight which is an incremental positive.
There were also numerous reports that the ECB is considering re-introducing TLTROs (a type of cheap loan to spur economic activity) to combat slowing EU growth.
Today there are no economic reports or Fed speakers so I’d expect a generally quiet trading day unless we get surprise political (possible government shutdown Friday) or geo-political (more U.S./China trade) headlines.
What’s in Today’s Report:
Futures are modestly lower on momentum from Thursday’s declines following mixed economic data overnight.
German exports beat estimates and rose 1.5% vs (E) -0.3%, finally giving the EU a good economic data point. But, Japanese Household Spending rose 0.1% vs. (E) 1.0% so the economic news wasn’t all good.
There was no notable geo-political or trade related news overnight and given there are no economic reports today, and only one Fed speaker (Daly at 1:15 p.m. ET), focus will remain on any new U.S./China trade headlines. That could lead to some more volatility, but as long as Mnuchin and Lighthizer are going to China next week (which it appears they still are) then we’re still getting progress on a U.S./China trade deal.
Tom Essaye Quoted in Barron’s on February 6, 2019.
“Futures are slightly lower as Trump’s SOTU was a non-event for markets…” Read the full article here.
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are moderately weaker as concerns about global growth rise following more weak EU economic data.
German Industrial Production badly missed estimates, falling –0.4% vs. (E) 0.8%, while the European Commission cut 2019 expected EU GDP to 1.3% from 1.9%.
The Reserve Bank of India surprisingly cut rates over night and is now the second large central bank to give markets a dovish surprise (after the RBA on Wednesday).
Today focus will remain on economic data and Fed speak, as we get Jobless Claims (E: 223K), Consumer Credit ($17.5B) and comments by dovish Fed Governor Bullard at 7:30 p.m. ET. If the news is generally dollar bullish and we see a further rise in the dollar, that might weigh on stocks more as a weaker dollar is needed to help boost corporate earnings going forward.
What’s in Today’s Report:
Futures are slightly lower as Trump’s SOTU was a non-event for markets while growth concerns continue in the wake of soft data o/n and earnings were mixed since yesterday’s close.
German Manufacturers’ Orders fell –7.0% y/y in December from –3.4% in November, the lowest reading since 2012, which is weighing modestly on EU shares in morning trade.
Looking ahead to today’s Wall Street session we are likely to see more digestion as there are limited catalysts.
There are two, second-tiered economic reports due out: International Trade (-$53.9B) and Productivity and Costs (E: 1.6%, 1.7%) while on the Fed front, Powell is scheduled to speak after the close (7:00 p.m. ET) but his remarks will be watched closely and could move markets after hours tonight.
Lastly, earnings season is winding down but there are still a few notables to watch today: GM ($1.21) and FDC ($0.37) before the open and CMG ($1.19) after the close.
Tyler Richey, co-editor of Sevens Report Quoted in MarketWatch on February 4, 2019.
“There have been a lot of shifting pieces in the oil market to start 2019 as a dovish [Federal Reserve], and subsequently weaker dollar, sanctions on Venezuela, and…” Read the full article here.