Additional Fed QE Takeaways

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What’s in Today’s Report:

  • Additional Fed QE Takeaways

Futures are limit up this morning and money flows were decidedly risk-on overnight as several sources, including individual Senators, suggested that the near $2T stimulus package will be passed today.

Additionally, the spread of the coronavirus showed signs of slowing in the last 24 hours while economically, global Flash PMI data was not as bad as feared overnight with manufacturing components universally topping estimates.

Today, there are two economic reports due to be released: PMI Composite Flash (E: 44.2) and New Home Sales (E: 743K), and one Fed official scheduled to speak: Bullard (9:45 a.m. ET). There is also a 2-Yr Treasury Note Auction at 1:00 p.m. ET.

With two of the three “keys to market stabilization” either accomplished (Fed stimulus) or in progress (slowing spread of the virus), all eyes will remain on Capitol Hill today. And if the massive economic stimulus package passes a vote in the Senate, expect a relief rally to follow as investor sentiment should become decidedly less gloomy.

We’ve Reached a Tipping Point

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What’s in Today’s Report:

  • We’ve Reached an Important Tipping Point
  • Weekly Market Preview:  More Progress Towards a Bottom?
  • Weekly Economic Cheat Sheet:  Important March Data This Week

Futures are down around 3%, but off the overnight lows of –5%, as the coronavirus case count increased sharply over the weekend in the U.S. while Congress failed to make much progress on the stimulus bill.

The stimulus bill has swelled to an expected $2 trillion (which is a market positive) but it failed to clear a procedural vote in the Senate and Democrats and Republicans are still far apart on details.

But, the market does still expect passage of the bill early this week (futures would be much lower if markets doubted that the bill will pass).

There are no notable economic reports today and as such, all eyes will be on Washington.  Signs of progress on the stimulus bill will result in rallies, while negative headlines will send stocks lower.  As a reference, markets expect passage of the stimulus bill by the middle of this week (at the latest).

Tom Essaye Quoted in UPI.com on March 18, 2020

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Tom Essaye, founder of The Sevens Report, said the volatility in the market is not yet over and said the market changes await events such as final approval of the stimulus package.

“We also need to see more progress on the pharma side of things and above all else…” Essaye said. Click here to read the full article.

Tom Essaye Quoted in MSN on March 19, 2020

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“Volatility is not over yet,” said Tom Essaye, founder of The Sevens Report, in a note. He pointed out the administration’s stimulus packages need congressional approval. “We also need to see more progress on the pharma…” Click here to read the full article.

New York Stock Exchange

Tom Essaye Quoted in CNBC on March 19, 2020

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“Looking ahead, the path of least resistance is decidedly lower right now and the lower-for-longer dynamic appears to be one that…” Tom Essaye, co-founder of The Sevens Report, said Wednesday. Click here to read the full article.

Oil worker

Corporate Bond Market Update

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What’s in Today’s Report:

  • Corporate Bond Market Update

Futures are sharply higher this morning as global governments move forward with more economic stimulus.

The Senate formally released the third economic stimulus bill, valued over 1 trillion (and likely rising).  While not a done deal yet, the speed at which Washington is operating has quickened this week and markets are reacting positively to that change.

On the coronavirus front, all of California is now under a “stay at home” order as cases continue to rise.

Today all eyes will remain on Washington and any positive commentary on the stimulus bill will further help stocks, while signs of a political battle will likely reverse these early gains.  Economically, there’s one report,  Existing Home Sales (E: 5.50M) and today is a “Quad Witch” quarterly options expiration so watch for big volumes on the close.

Tom Essaye Quoted in International Business Times on March 18, 2020

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“Volatility is not over yet,” said Tom Essaye, founder of The Sevens Report. “We also need to see more progress on the pharma side of things, and above all else we need the growth…” Click here to read the full article.

Tom Essaye

Tom Essaye Quoted in CNBC on March 17, 2020

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“Volatility is not over yet,” said Tom Essaye, founder of The Sevens Report, in a note. He pointed out the administration’s stimulus packages need congressional approval. “We also need to see more progress…” Click here to read the full article.

Tom Essaye Quoted in CNBC on March 18, 2020

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“Looking ahead, the path of least resistance is decidedly lower right now and the lower-for-longer dynamic appears to be one that is here to stay for a while, given the clearly bearish fundamentals…” said Tom Essaye, co-founder of The Sevens Report. Click here to read the full article.

Oil Rig Worker

Tom Essaye Quoted in Benzinga on March 16, 2020

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Tom Essaye, founder of Sevens Report Research, said the timing of the Fed’s announcement on Sunday when it has a regular meeting scheduled for Wednesday may have spooked the market.

“It implies panic, (what did they know that we didn’t?), although that’s probably not…” Essaye said. Click here to read the full article.