Sevens Report’s Tom Essaye quoted in MarketWatch on October 25, 2018. He wrote in a note to clients that so far, third-quarter earnings have been disappointment and that “peak earnings is a potential reality” that investors are now struggling with. Read the full article here.
Sevens Report’s Tom Essaye quoted in CNBC on October 25, 2018.
“What happened yesterday was the market got way oversold,” said Tom Essaye, founder of The Sevens Report. “Was a decline on earnings warranted? Yes, but not 10 percent.” Read the full article here.
What’s in Today’s Report:
Futures are bouncing from yesterday’s carnage following good earnings reports overnight.
MSFT, F, V, XLNX, TSLA and WHR all posted solid earnings and that is helping stocks to bounce moderately.
Economic data was sparse as German IFO Business Expectations was the only report and it slightly missed estimates.
Today there are actually multiple macro events including an ECB Decision (No Change is expected to rates or QE but we’ll be watching to see if Draghi notes equity market volatility), Durable Goods Orders (E: -1.4%), Jobless Claims (E: 212K) and Pending Home Sales (E: 0.0%) plus there are two Fed speakers: Clarida (12:15 p.m. ET), Mester (7:00 p.m. ET).
But, despite that busy calendar, barring dovish commentary from the ECB or Fed speakers (which isn’t expected) focus will remain on earnings, and this market needs more solid results to break the current negative feedback loop.
What’s in Today’s Report:
US futures are in the red again this morning although there is again no clear reason why while overseas shares traded mostly “ok” overnight amid mixed economic data.
Japanese PMI Manufacturing Flash beat (53.1 vs. E: 52.6) helping the Nikkei rally but EU data was on the soft side.
As far as US economic data goes today, there are two reports on the housing market this morning: FHFA House Price Index (E: 0.3%) and New Home Sales (E: 625K) while the more important release to watch will be the PMI Composite Flash (E: 54.1) due out shortly after the open.
The Fed speaker circuit also remains busy with Bostic (10:00 a.m. ET, 2:00 p.m. ET), Bullard (11:30 a.m. ET), and Mester (12:30 p.m. ET) all speaking during the Wall Street session today.
Lastly, and likely most importantly for stocks right now, there are a slew of earnings reports today. A few notables include: BA ($3.51) and T ($0.93) ahead of the open and MSFT ($0.96) and V ($1.20) after the close.
Tom Essaye’s Sevens Report CNBC Asia Interview on October 23rd 2018. Watch the full video here.
Sevens Report’s Tom Essaye quoted in Yahoo Finance on October 22, 2018. Watch the full video here.
Futures are slightly higher thanks to a rally in Asian markets following mixed Chinese economic data.
Chinese Fixed Asset Investment (5.4% vs. (E) 5.3%) and Retail Sales (9.2% vs. (E) 9.1%) beat estimates, while GDP (6.5% vs. (E) 6.6%) and Industrial Production (5.8% vs. (E) 6.0%) missed. But, commentary from Chinese officials raised hopes of more economic stimulus and Chinese markets rallied more than 1%.
Today there is one economic report, Existing Home Sales (E: 5.30M) and two Fed speakers: Bostic (12:00 p.m. ET) and Kaplan (12:45 p.m. ET), but focus will remain on earnings (which were “ok” overnight and this morning as AXP, PYPL and HON beat) and Italy. If there’s further deterioration in the Italy/EU situation, stocks will come under pressure once again.
Futures are modestly lower thanks to disappointing economic data and ahead of a busy day of earnings.
Economically, Japanese exports missed estimates (-1.2% vs. (E) 2.0%) as did U.K. retail sales (-0.8% vs. (E) 0.3%).
There were no new political or geo-political events overnight.
Today will be a busy day as we get an important economic report, Philadelphia Fed Business Outlook Survey (E: 20.0) and two Fed speakers (Bullard (9:00 a.m. ET), Quarles (12:15 p.m. ET)) who could add to the growing “hawkish” narrative.
But, the real key to trading today will be earnings as markets need more proof that overseas revenues aren’t at risk, and margins aren’t compressing. If that’s the case, then stocks can continue the rebound. Some reports we’ll be watching include: PM ($1.27), AXP ($1.78), BX ($0.73).
US stock futures are down roughly 10 points this morning as yesterday’s big rally and notable post-market gains thanks to strong NFLX earnings are digested and investors look ahead to the Fed Minutes today.
Economically, EU HICP (their CPI equivalent) was in-line with expectations at 2.1% yoy but the core figure was soft, slipping to 0.9% from 1.0% which is mildly dovish for ECB policy outlook.
Looking into today’s session, there is just one economic report due out: Housing Starts (E: 1.221M) which will leave investors primarily focused on the FOMC Minutes due out at 2:00 p.m. ET. Earnings season takes a breather today as there are no major releases.
On that note, the huge beat by NFLX after the close yesterday should help tech shares continue to trade well this morning which could see this rebound extend higher into the Fed release this afternoon.
