“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.
What’s in Today’s Report:
Futures are flat as investors await earnings releases from several big banks this morning while the dollar is rallying after economic data in the EU missed expectations.
The German ZEW Survey showed deteriorating confidence among analysts for both the current state, and the future outlook of the German economy while the British Labour Market Report saw the largest jump in jobless claims since 2009 but also a sharp spike in wage growth (+3.4%). Both the euro and the pound are declining on the news, supporting a rally in the dollar.
From a news flow standpoint, it is lining up to be a very busy day.
Beginning with economic data, Retail Sales (E: 0.1%), Import & Export Prices (E: -0.5%, -0.1%), Industrial Production (E: 0.1%), and the Housing Market Index (E: 65) are all due to be released by 10:00 a.m. ET. Retail Sales will be the most important report to watch, but all of the data has the ability to move markets today.
Turning to the Fed, there are multiple speakers today: Bowman & Bostic (8:15 a.m. ET), Kaplan (12:20 p.m. ET), Powell (1:00 p.m. ET), and Evans (3:30 p.m. ET). Focus will clearly be on Powell in the early afternoon, but any other commentary that wavers from the markets expectations for a 25 basis point rate cut at the FOMC meeting this month could trigger some volatility.
Lastly, the earnings calendar picks up today and investors will be watching the several major banks due to release their Q2 results ahead of the bell: JPM ($2.50), GS ($4.82), and WFC ($1.16) very closely after yesterday’s mixed report from C.
JNJ ($2.42) is also due to report pre-market and we will get some transportation earnings after the close this afternoon: CSX ($1.11) and UAL ($$4.06).
Bottom line, earnings are in focus but even with solid corporate results, economic data will need to remain Goldilocks and Fed chatter needs to keep a dovish tone for stocks to continue to churn to fresh all time highs.
“There are a lot more risks underlying this market than the tape would imply. If global economic data does not stabilize, or…” wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article on Bloomberg.
What’s in Today’s Report:
S&P futures are modestly higher this morning while overseas markets were little changed overnight as mixed economic data was digested ahead of a busy week of earnings.
Chinese GDP slowing to 6.2% vs. (E) 6.3% initially caught investors’ attention but Fixed Asset Investment, Industrial Production, and Retail Sales all solidly beat expectations, helping Chinese shares recover 1.5%+ to close with a modest gain.
Looking into today’s session, there is one economic report to watch: Empire State Manufacturing Survey (E: 0.5) and one Fed official is scheduled to speak: Williams (8:50 a.m. ET).
Meanwhile, market focus is shifting to earnings as the Q2 reporting season gets underway this week. Today, there are just two notable reports with C (E: $1.78) ahead of the bell and JBHT (E: -$0.08) after the close.
What’s in Today’s Report:
Futures are modestly higher again on momentum as surging expectations for dovish global central banks continues to push stocks higher.
Economic data remained mixed as Chinese exports declined again but not as much as expected (-1.3% vs. (E) -2.0%) while EU Industrial Production beat estimates (0.9% vs. (E) 0.2%).
There was no new news on trade overnight and the situation remains essentially stalemated.
Today the only notable number is PPI (E: 0.1%) but that likely won’t move markets because investors ignored the solid CPI report from yesterday, so they’ll likely do the same to PPI today.
Put more directly, it’s going to take some pretty substantially bad economic data or very hot inflation data to break the dovish trance markets are in right now, and it’s not likely to happen today as there are no Fed officials speaking, either.
“Powell has a tough job ahead of him. The market is pricing in a 97% chance of a July rate cut, and a 75% chance of one in September.” says the Seven Report’s Tom Essaye. Click here to read the full MarketWatch article.
What’s in Today’s Report:
Futures are marginally higher thanks to continued momentum from yesterday’s dovish rally.
Economic data was sparse overnight as the only notable number was German CPI, which met expectations at 1.6% yoy.
Today will be a busy day. First, we get the 2nd half of Powell’s testimony in front of the Senate Banking Committee at 10:00 a.m. ET, but that shouldn’t yield any surprises as it’s mostly a repeat of yesterday.
The ECB Minutes will be released at 7:30 a.m. ET and if they hint at a re-start of QE (which they probably will) then we might see an extensions of this “dovish” rally.
On the data front, CPI (E: 0.0%) and Jobless Claims (E: 216K) both get released later this morning but given the flood of dovishness inundating markets right now from global central banks, it’d take a very strong CPI and very high jobless claims to hit stocks.
Finally, there are multiple Fed speakers today besides Powell, but they are all generally overshadowed by the comments yesterday so the market should largely ignore their speeches. Today’s roster includes: Williams (11:00 a.m., 1:30 p.m. ET), Quarles (1:30 p.m. ET), Kashkari (5:00 p.m. ET).
What’s in Today’s Report:
Futures are lower with most international markets as investors look ahead to Powell’s testimony while another EU company, PageGroup, issued a profit warning overnight.
Economically, Chinese June CPI was inline but PPI dropped from 0.6% to 0.0% vs. (E) 0.2% which rekindled deflationary concerns and underscored pressures on the Chinese manufacturing sector.
Today, there are no economic reports but even if there were, focus would be primarily on the Fed anyway.
Powell’s Testimony before Congress is clearly the main event as investors look for further clues on the future of monetary policy. His written comments are due out at 8:30 a.m. ET before he begins to speak at 10:00 a.m. ET.
Bullard also speaks at 1:30 p.m. ET today and the June FOMC Meeting Minutes will hit the wires at 2:00 p.m. ET.
Lastly, there is a 10 Year T-Note Auction at 1:00 p.m. ET and depending on the results (demand metrics and yields) a reactive move in the bond market could influence stock trading in the midst of all the Fed events.
“Geopolitics, and more specifically the threat of more military activity between the U.S. and Iran, is one of the only remaining bullish factors supporting the…” said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are moderately lower this morning as the less-dovish money flows in the wake of the June jobs report continue while multiple companies, notably BASF, have issued profit warnings so far this week.
Economically, the NFIB Small Business Optimism Index fell to 103.3 vs. (E) 104.5 in June as survey responses showed broad weakness in earnings and sales expectations which is further weighing on investor sentiment ahead of earnings season.
Today, there is just one economic report to watch: JOLTS (E: 7.40M) however there are multiple Fed officials scheduled to speak: Bullard (10:00 a.m. ET), Bostic (1:00 p.m. ET), and Quarles (2:00 p.m. ET).
With focus already largely shifting to Powell’s testimony before congress tomorrow and Thursday, investors will be watching today’s Fed speakers closely for any further clues on future policy following Friday’s strong jobs headline.
