Fed Expectations and Earnings

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What’s in Today’s Report:

  • Weekly Market Preview (Fed Expectations and Earnings)
  • Weekly Economic Cheat Sheet (July Flash PMIs this week).

Futures are slightly higher on positive U.S.-China trade headlines following an otherwise quiet weekend.

Tech firms will meet today with administration officials to discuss the Huawei tech ban, while multiple reports stated China will increase soybean purchases and a face to face meeting between Chinese & U.S. officials could occur soon.

Fed policy expectations continue to shift back to a 25 basis point rate cut next week as hope for a 50 basis point cut continues to recede.

Today there are no economic reports and no Fed speakers as we enter the “quiet period” ahead of next Wednesday’s rate decision.  So, there’s not much on the calendar today that could cause volatility, although headlines from the tech company/administration meeting today on Huawei is something to watch, as any hints at relaxing of the ban will be a mild positive for stocks.  Earnings are sparse today as well although I’ll be watching Whirlpool (WHR $3.80) results after the close for any insight into the state of the U.S. consumer.

Key Levels To Watch in the Yield Curve

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What’s in Today’s Report:

  • Signals from the “Smart Market” – Good, Bad, and Ugly Scenarios

Stock futures are flat to slightly higher this morning as investors continue to digest mixed earnings reports, incremental progress between the U.S. and China on trade, and yesterday’s very dovish Fed chatter.

U.S. and Chinese officials held phone conversations last night and it appears more face-to-face meetings are likely in the near term, underscored by a near 2% rally in copper this morning.

Looking into today’s session, there is one economic report to watch: Consumer Sentiment (E: 98.6) and two Fed officials are scheduled to speak: Bullard (11:05 a.m. ET) and Rosengren (4:30 p.m. ET).

Earnings will remain in focus as there are several notable companies releasing Q2 results before the bell: BLK ($6.52), KSU ($1.61), AXP ($2.05), and SYF ($0.96), but yesterday’s rally was all about dovish Fed expectations so investors will be watching for any further clues as to whether the Fed will cut by 25 or 50 basis points at the July FOMC meeting.

Tom Essaye Quoted in Televisa.news on July 16, 2019

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“Si miramos esta temporada de resultados, la pregunta clave es: ¿llevará la incertidumbre en materia comercial a que las empresas frenen sus inversiones y reduzcan sus gastos…” se planteó el experto Tom Essaye, fundador de Sevens Report.

Tom Essaye Quoted in Invezz on July 17, 2019

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“Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pull back on spending and investment enough so that it begins to weigh on earnings?” Tom Essaye, founder of the Sevens Report, said in a note. Click here to read the full article.

The Four Key Influences on this Market

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What’s in Today’s Report:

  • The Four Key Influences on this Market (and How to Easily Monitor Them)
  • EIA Analysis and Oil Update

Futures are modestly lower this morning as the market digests several disappointing earnings releases (notably CSX and NFLX) while U.S.-China trade concerns linger after multiple negative news articles were released overnight.

Economically, U.K. Retail Sales beat (1.0% vs. E: -0.3%), which is helping the pound recover from fresh 2019 lows.

News flow will remain steady today with two economic reports to watch: Jobless Claims (E: 215K) and Philadelphia Fed Business Outlook Survey (E: 4.5) while there is one Fed official scheduled to speak: Williams (2:15 p.m. ET).

Over the last 24-36 hours, earnings became a more significant driver of the broader stock market so today’s corporate results will be important to watch. Before the bell UNH ($3.46), MS ($1.13), HON ($2.08), and UNP ($2.12) all release results and MSFT ($1.21), and COF ($2.84) will report after the bell.

Tom Essaye on Yahoo Finance on July 16, 2019

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“Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pullback on spending and…” said Tom Essaye, founder of the Sevens Report, in a note. Click here to read the full Yahoo Finance article.

Stock Trading Floor

Tyler Richey Quoted in MRT on July 15, 2019

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Tyler Richey, co-editor at Sevens Report Research wrote in a note to clients, “Near term, the trend is still higher. But formidable technical resistance…” Click here to read the full article.

oil rig

Tom Essaye Quoted in CNBC on July 16, 2019

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Stocks fell from record highs on Tuesday after President Donald Trump cast doubt on the trade progress between China and the U.S. “Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pullback on spending and investment enough so that it begins to weigh on earnings?” said Tom Essaye, founder of the Sevens Report. Click here to read the full article.

Stock Trading Floor

Economic Breaker Panel: July Update

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What’s in Today’s Report:

  • Economic Breaker Panel – July Update

Futures are trading modestly higher this morning as investors digest the mixed set of corporate earnings releases so far this week after an otherwise quiet night of macro news.

Eurozone inflation was 1.3% vs. (E) 1.2% year/year in June, but the slightly firmer than expected print was not enough to alter the outlook for ECB policy (the euro is flat).

Today, there is one economic report to watch: Housing Starts (E: 1.260M) and one Fed official scheduled to speak: George (12:30 ET).

With news-flow considerably slower today than yesterday, investor focus will remain on earnings as the reporting season continues to pick up.

Notable releases today include: BAC ($0.70), PNC ($2.83), USB ($1.07), BK ($0.94) before the open, and NFLX ($0.56), IBM ($3.06), EBAY ($0.62), AA (-$0.34), KMI ($0.23) after the close.

Tyler Richey Quoted in Bloomberg on July 14, 2019

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“Near term, the trend is still higher, but formidable technical resistance in the mid-$60s and persistent demand concerns due to…”  Tyler Richey, co-editor at Sevens Report Research in Florida, wrote in a note to clients. Click here to read the full Bloomberg article.

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