Inflation Update

/in /by

What’s in Today’s Report: Inflation Update

 

Futures are slightly lower as strong Chinese economic data was offset by U.S./China trade worries.

Chinese August Manufacturing PMI increased and beat estimates at 51.3 vs. (E) 51.0, which will ease some concern about the Chinese economy.

Regarding inflation. EU Core HICP slightly missed estimates (1.0% vs. (E) 1.1%) as inflation remains stubbornly low.  This is important because it’s going to be hard for the dollar to really breakdown without a good euro rally – and we need higher EU inflation to fuel that EU rally, and it’s just not happening.

There was no new trade news overnight but prospects of 200 bln in new tariffs next week is a headwind on markets.  Both Bloomberg and Reuters had separate reports saying the administration intends to go forward with the tariffs shortly after the comment period ends early next week.

Today there is only one economic report, Consumer Sentiment (E: 95.5), so focus will remain on trade headlines – but assuming the news wires are quiet on that topic, it should be a typically slow, pre-long weekend Friday in the markets.

To read the full analysis Go Here

Tom Essaye on Fox Business, August 29, 2018

/in /by

Aug. 29, 2018 – 3:35 – Sevens Report Founder Tom Essaye discusses the S&P 500’s bullish run and the U.S.-China trade debacle.

Listen to the entire clip Here

Tom Essaye on CNBC

/in /by

“In March, we had four areas of trade uncertainty: Mexico, China, Europe and Canada. I think Canada will be resolved and Europe and Canada are already resolved,” said Tom Essaye, founder of The Sevens Report. “Basically, we’ve got three of four resolved, but China is a big one.”

Essaye also said he would be surprised if stocks keep grinding higher without a resolution to U.S.-China trade relations.

Click here to read the entire article.

Push on Trade – Tom Essaye on Bloomberg Radio

/in /by

Tom Essaye, Founder, The Sevens Report, joined Bryan Curtis and David Ingles on Daybreak Asia to discuss the deal on trade with Mexico and the outlook for a resolution with China. He goes onto Fed hikes, how close they are to neutral and when the yield curve may invert.

Link to the Bloomberg site: Click Here

Five Catalysts to Determine the Year

/in /by

What’s in Today’s Report:

  • Five Catalyst To Determine the Year
  • EIA Analysis and Oil Update

Futures are modestly lower as markets digest the recent rally.

Concerns about China (both trade and the economy) are the most cited reason for the mild dip this morning but nothing materially negative occurred overnight.

Economically, Japanese retail sales beat estimates (1.5% vs. (E) 1.2%) while Euro Zone Economic Sentiment slightly missed expectations (111.6 vs. (E) 112.0).

Today markets will be looking for any official news on Canada joining the U.S./Mexico trade deal (it’s not expected but possible).

Beyond those trade-related headlines, the most important event today will be the Core PCE Price Index (E: 0.2% m/m, 2.0% y/y) contained in the Personal Income and Outlays Report.  Slowly accelerating inflation remains a key pillar in the bull thesis on this market, and if we see a core PCE Price Index materially above 2% (say 2.2% or higher) that will push the dollar and yields higher, and likely be a headwind on stocks.

To access to full report Go Here

Tom Essaye on Bloomberg Radio – His Take on Trade

/in /by

Tom Essaye, Founder, The Sevens Report, joined Bryan Curtis and David Ingles on Daybreak Asia to discuss the deal on trade with Mexico and the outlook for a resolution with China. He goes onto Fed hikes, how close they are to neutral and when the yield curve may invert.

Click Here to listen to the clip

Are Commodities Bottoming?

/in /by

What’s in Today’s Report:

  • Are Commodities Bottoming?

It was another very quiet August night in the markets as US futures are flat this morning while European shares are slightly lower and Asian indexes continued to advance modestly with trade negotiations still the major focus.

The German GfK Consumer Climate edged down 0.1 to 10.5 vs. (E) 10.6 in September. Sentiment in Europe is not quite as strong as the US, but it remains mostly upbeat and strong enough for continued equity gains in the medium term.

Oil prices are slightly higher this morning despite the API reporting a slight build (+38K bbls) in crude stocks vs. (E) -1M bbls ahead of the weekly EIA report this morning.

Today, trade will continue to dominate the headlines but there are two economic reports to watch: GDP (E: 4.0%) and Pending Home Sales (E: 0.0%). There are no Fed officials or other central bank events so from a catalyst standpoint, it will likely be another quiet session.

The dollar has been a good inverse proxy for trade sentiment recently so if we see a continued pullback, stocks can continue to flirt with new highs, however any material rebound in the dollar index today will likely pressure US shares (the greenback is slightly higher so far).

Finally, I’ll be joining Liz Claman on Fox Business’s “Countdown to the Closing Bell” this afternoon at 3:00  p.m. ET to discuss the outlook for the markets and opportunities for investors as we head into the final four months of the year.

To access the full analysis Go Here

Valuation Update (New Target)

/in /by

What’s in Today’s Report:

  • Valuation Update

Futures are slightly higher this morning after a very quiet night as global shares are edging higher after yesterday’s run to new all-time highs in several major US indexes.

Trade concerns continue to ease after yesterday’s favorable developments between the US and Mexico, leading to a further pullback in the dollar which has been the most significant tailwind for stocks over the last week.

Looking ahead to today’s session, there are a few notable economic reports due out: International Trade in Goods (E: -$69.4B), S&P Case-Shiller HPI (E: 0.2%), and Consumer Confidence (E: 126.8) but there are no Fed officials scheduled to speak.

Economic data aside, progress on trade and the subsequent decline in the dollar index have been the primary bullish influences on stocks right now, so as long as the trade situation doesn’t deteriorate today, and the dollar doesn’t materially rally, stocks should be able to continue towards new highs.

To access the full analysis Go Here

New Highs

/in /by

What’s in Today’s Report:

  • Why Stocks Hit New Highs
  • Weekly Market Preview
  • Weekly Economic Cheat Sheet

Futures are extending Friday’s gains following efforts by Chinese authorities to further strengthen the yuan.

The yuan strengthened to a one month high vs. the dollar as Chinese officials re-introduced the “Counter Cyclical Factor” in setting the daily value of the yuan.  That “factor” is widely seen as an intent to ensure yuan strength and avoid a potential breach of 7.00.  And, that support of the yuan is a potential macro positive.

The only notable econ report was German IFO Business sentiment, which beat estimates at 106.4 vs. (E) 105.4.

Today there are no notable economic reports and no important Fed speakers, so focus will remain on any trade headlines (a new trade deal with NAFTA seems imminent and that should be a mild positive on sentiment and stocks).

To read the full report Go Here

Tom Essaye’s Take on Market response to US legal and political drama on CNBC

/in /by

Market response to US legal and political drama is ‘appropriate’

Tom Essaye, editor of the Sevens Report, was on CNBC, says “a lot more has to happen” for U.S. President Donald Trump to be impeached.