Long Term Entry Point?

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What’s in Today’s Report:

  • Why I’m Buying Some Stock in My IRA Today
  • Weekly Economic Cheat Sheet
  • Weekly Market Preview

Futures are seeing a modest oversold bounce following a generally quiet weekend.

If there is a “reason’ for this modest bounce in futures it was the administration trying to reassure investors over the weekend.  Treasury Secretary Mnuchin tried to calm markets by 1) Stating Trump knows he can’t fire Fed Chair Powell and 2)  Calling the heads of major U.S. banks to ensure there were no liquidity problems (there weren’t).

There was no notable economic data or U.S./China trade updates over the weekend.

Today there are no economic reports and no Fed speakers,  and the markets close early (1:00 p.m. ET).

Sevens Report’s Tom Essaye quoted in The Wall Street Journal on December 12, 2018

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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

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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

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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

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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?

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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)

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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

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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

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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.