Is Healthcare A Buy? (It’s Negative YTD)

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What’s in Today’s Report:

  • Why Stocks Faded At the Open Yesterday (For the Second Straight Day)
  • Is Healthcare a Buy? (XLV is lagging the S&P 500 by 16% YTD)
  • Oil and Energy Update

Futures are slightly lower following a night of mixed economic data.

EU flash composite PMIs missed estimates (51.3 vs. (E) 51.8) and that’s a disappointment given recent stabilization in China.  But, not all the data was bad as UK Retail Sales rose 1.1% vs. (E) 0.2%, likely on Britons stocking up goods ahead of the hard Brexit deadline in late March.

Today is the eve of a three day weekend but it’s going to be busy as we get a lot of economic data and important earnings.

Important data today includes (in order of importance):  PMI Composite Flash (E: 54.3), Retail Sales (E: 0.8%), Philly Fed  (E: 10.2) and Jobless Claims (E: 206K).  As we said in Monday’s report, the stronger the data, the better for stocks as there is no inflation threat right now (so good data won’t make the Fed hawkish).

On the earnings front, some releases we’ll be watching include:  AXP ($2.00), PM ($1.00), SLB ($0.30) and HON ($1.83).

Sevens Report – What’s in the Box?

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What’s in Today’s Report:

  • A Warning Sign from Box Shipments?
  • Gold Breakdown

Futures are climbing higher this morning while international shares were little changed overnight as investors digested upbeat Chinese economic data against mixed earnings.

Chinese Industrial Production (8.5% vs. E: 6.0%), and Retail Sales (8.7% vs. E: 8.3%) both handily beat expectations in March helping Q1 GDP rise 6.4% vs. (E) 6.3%. But, stabilizing Chinese growth is largely priced in to the market at current levels which is why the reaction has been largely muted by international traders.

Looking to today’s calendar, there is one economic report to watch: International Trade (E: -$53.6B) and two Fed officials are scheduled to speak: Bullard (12:30 p.m. ET) and Harker (12:30 p.m. ET).

The main focus however will remain earnings. A few notables to watch include: MS ($1.17), PEP ($0.92) before the open and AA ($0.17) after the close.

Tom Essaye Quoted in The Wall Street Journal on April 16, 2019

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Health care—the best-performing sector last year—is the worst-performing group in the S&P 500 this year. “The jury is still out on health care, earnings season isn’t going to provide enough clarity to…” Click here to read the full article.

Tom Essaye Interviewed with Fox Business on April 15, 2019

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Sevens Report founder Tom Essaye says the market can still rally despite disappointing bank earnings. Watch the full clip here.

Economic Breaker Panel: April Update

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What’s in Today’s Report:

  • Economic Breaker Panel Update – More Improvement
  • Earnings Review – Not the Greatest Start

Futures are tracking international shares higher this morning amid dovish central bank speak and earnings optimism.

Both Evans and Rosengren made dovish comments regarding inflation which is helping influence mild risk-on money flows this morning.

Economically, the German ZEW Survey was mixed as the headline weakened for a seventh straight month while the forward looking business expectations rose for the sixth time in a row.

Today, there are two economic reports to watch: Industrial Production (E: 0.3%) and the Housing Market Index (E: 63), and Kaplan speaks at 2:00 p.m. ET.

Earnings however will remain the primary market focus with notable reports being released from BAC ($0.65) ahead of the bell and NFLX ($0.57) and IBM ($2.21) after the close. With a mixed start to the season, if we do not see corporate results begin to improve, underwhelming earnings will become a growing headwind on equities this week.

S&P 500 Back At 2900: What’s Changed Since October

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What’s in Today’s Report:

  • S&P 500 Back At 2900:  What’s Changed Since October.
  • Weekly Market Preview (All About Earnings)
  • Weekly Economic Cheat Sheet (More Important Chinese Data)
  • I’ll be joining Liz Claman on Countdown to the Closing Bell at 3:55 p.m. today on Fox Business to Discuss the Markets.  Tune In!

Futures are flat following a quiet weekend as markets digest last week’s rally.

Expectations of a U.S./China trade deal continue to rise, with some anticipating an announcement this week.  The WSJ, Reuters and others had positive articles this morning.  But, as a reminder, the market has already priced in a deal, so the real focus of any announcement will be when tariffs are removed, and the sooner, the better.

There was no notable international or U.S. economic data overnight.

Today there is one notable economic report, Empire State Manufacturing Index (E: 6.8) and one Fed speaker, Evans at 8:30 a.m. & noon.  Given that somewhat light calendar, focus will be on earnings, and some numbers we are watching today include: C ($1.78), GS ($5.05), JBHT ($1.25).  If data and earnings are solid, this rally can continue.

The Easiest Way to Explain This Market To Clients

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What’s in Today’s Report:

  • The Easiest Way To Explain This Market To Clients
  • Technical Market Update (Volume Not Confirming The Rally)
  • A More “Hawkish” Fed than we think?

Futures and global markets are moderately higher as global economic data beat expectations, furthering hopes of a global growth rebound.

March Chinese exports handily beat estimates, rising 14.2% vs. (E) 8.4% while EU Industrial Production wasn’t as bad as feared (-0.2% vs. (E ) -0.6%).

Focus turns to earnings this morning as all eyes will be on three big banks:  JPM ($2.32), WFC ($1.08), PNC ($2.59).  If they post solid numbers, then combined with the good Chinese economic data, we could see an extension of this rally.

Outside of earnings, we do get Import/Export Prices (E: 0.4%/0.3%) and Consumer Sentiment (E: 98.0).  Plus, Powell speaks to House Democrats but no comments on policy are expected and none of those events should move markets.

Tom Essaye Quoted in CNBC on April 11, 2019

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“This met current market expectations,” said Tom Essaye, founder of The Sevens Report. “But Fed officials also didn’t see any need to cut rates at this point either, and there wasn’t even much of a discussion…” Click here to read the full article.

Tom Essaye Quoted on Market Watch on April 12, 2019

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Tom Essaye quoted in MarketWatch to share his view on earnings season. “Bottom line, this earnings season is make or break for this market, because we need earnings growth to resume if the S&P 500 is going to…” Click here to read the full article.

Contrarian Opportunity in Permian Shale Stocks?

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What’s in Today’s Report:

  • FOMC and ECB Takeaways (Both Dovish As Expected, But Neither Will Help Stocks Rally)
  • An Opportunity in Permian Shale Energy Stocks?
  • Energy Market Update – Solidly Bullish

Futures are slightly lower following another quiet night as markets look ahead to Chinese exports and bank earnings coming tomorrow.

More progress was made in U.S./China trade talks according to the WSJ and a deal is imminent, but the market already assumes that so it didn’t cause a rally.

Chinese and German CPIs both met expectations.

Today there are two economic reports, Jobless Claims (E: 211K) and PPI (E: 0.4%, 0.2%) but neither should move markets.  So, focus will be on a lot of Fed speak, specifically Clarida (9:30 a.m. ET) and Williams (9:35 a.m. ET) (Bullard and Bowman also speak today but they aren’t considered Fed “leadership”).    If Clarida and Williams talk more about an “average” inflation target, that might put a mild tailwind on stocks as it hints at a more dovish Fed in the future (something we didn’t see in the Minutes yesterday).