“The negative China headlines and soft U.S. economic data were demand-side negatives for oil. However, hopes for peak-hawkishness bolstered risk assets” analysts at Sevens Report Research wrote in a Tuesday newsletter. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following disappointing inflation data and as Russia suspended grain shipments from Crimea.
EU HICP (their CPI) ran hotter than expected, rising 10.7% vs. (E) 10.2% y/y while Core HICP rose 5.0% vs. (E) 4.8%, again showing that inflation pressures are not easing.
Russia suspended grain shipments in response to rocket attacks on Crimea, sending wheat prices sharply higher which will add to inflation pressures.
Today there are no economic reports but there are some notable earnings, especially from the semi-conductor companies and some companies we’re watching include: ON ($1.31), NXPI ($3.62), CAR ($14.80).
What’s in Today’s Report:
Futures are moderately lower following another disappointing night of earnings.
AMZN became the latest mega-cap tech stock to miss earnings and the stock fell more than 10% after hours. AAPL posted “ok” results and rose 1% overnight.
Economically, the Italian CPI was hotter than expected (11.9% vs. (E) 9.7% yoy) as inflation remains sticky in the EU.
Focus today will be on inflation data, specifically the Core PCE Price Index (0.5% m/m, 5.2% y/y). If this number comes in under expectations, that’ll be a mild positive for markets. Also on the inflation front, the Employment Cost Index (E: 1.2% q/q, 5.0% y/y) will be closely watched by the Fed, while the University of Michigan Five Year Inflation Expectations will be released inside of the Consumer Sentiment report (E: 59.7). If those five-year expectations can drop further below 3%, that will be a positive for markets.
Other notable releases today include Pending Home Sales Index (E: -3.8%) and a few notable earnings results: XOM ($3.88), CVX ($5.02), CL ($0.74).
What’s in Today’s Report:
Futures are little changed as rising hope of smaller than expected future rate hikes is being offset by ugly tech earnings.
Meta (FB) missed earnings and posted underwhelming guidance and the stock fell nearly 20% after hours, continuing this week’s trend of disappointing tech earnings.
Today will be a busy day of earnings and economic data. The most important events of the day will come after the close via the AAPL ($1.26), AMZN ($0.22), INTC ($0.34) earnings, and given the disappointing tech earnings so far this week, the market will need solid numbers today.
Outside of those earnings, other key events today include the ECB Rate Decision (E: 75 bps hike), Durable Goods Orders (E: 0.6%), Jobless Claims (E: 223K) and Preliminary Q3 GDP (E: 2.3%) and the market will be looking for “just right” outcomes from each (an ECB that’s not too hawkish, and U.S. economic data that’s not too good or not too bad).
What’s in Today’s Report:
Stock futures are trading lower this morning as soft tech earnings are overshadowing a continued bounce in bonds.
MSFT and GOOGL both fell roughly 6% overnight after delivering disappointing quarterly results yesterday afternoon which is dragging the broader tech sector lower in premarket trading.
Today, there are two economic reports to watch in the morning: International Trade in Goods (E: -$87.8B) and New Home Sales (E: 585K), while there is a 5-Yr Treasury Note auction in the early afternoon (1:00 p.m. ET).
Earnings will remain in focus today with BA (-$0.01), BMY ($1.83), HLT ($1.25), KHC ($0.55), and HOG ($1.45) reporting before the bell, and META ($1.88), F ($0.31), and CP ($0.77) releasing results after the close.
Bottom line, soft earnings out of mega-cap tech are weighing on the market this morning however stable bond markets are limiting losses. If we see Treasuries roll over today and yields begin to climb again, expect pressure on equities to pick up as both earnings expectations and multiple compression will weigh on stocks broadly.
“The trend is still lower for now but once we can actually say we have reached peak-hawkishness, the outlook for gold will very likely shift to neutral (if not bullish) from bearish,” said Tom Essaye, a former Merrill Lynch trader and the founder of the Sevens Report newsletter. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower as the Chinese yuan fell to a 14-year low overnight while traders look ahead to big tech earnings.
Economically, the German Ifo Survey was better than feared with Business Expectations up to 75.6 vs. (E) 74.8.
Looking into today’s session, there are several economic reports due to be released: Case-Shiller Home Price Index (E: -0.8%), FHFA House Price Index (E: -0.7%), and Consumer Confidence (E: 106.0). Since Friday’s renewed hopes for peak-hawkishness, the bad news is good news for markets so further softening in the data could keep downward pressure on yields and support a continued rebound in equities today.
There is also a 2-Yr Treasury Note auction at 1:00 p.m. ET that could shed some light on bond traders’ outlook for the terminal rate as a weak outcome could send yields higher and ultimately see the stock market give back some of the Friday/Monday gains.
Finally, earnings season is becoming the market’s primary focus and there are a lot of big names reporting today including: UPS ($2.84), KO ($0.64), GM ($1.89), MMM ($2.61), JBLU ($0.24), and SYF ($1.42) before the bell, while GOOGL ($1.25), MSFT ($2.30), and V ($1.86) are due to report after the close.
“The Biden administration introduced an ‘SPR put’ to the oil market this week when they announced purchasing crude to replenish reserves when prices dip towards $70 a barrel,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher as momentum from Friday’s close offset steep losses in Chinese markets.
The Hang Seng fell 6% as Premier Xi emerged from China’s National Conference with an even tighter grip on power, ensuring continued “zero COVID” policies and heightened tensions with the West.
Economically, the Euro Zone and UK flash PMIs missed estimates as both remained below 50 (47.1 and 47.2 respectively).
This week will being a deluge of critical earnings reports but that doesn’t’ start until tomorrow, so focus today will be on the flash PMIs (October Flash Manufacturing PMI (E: 51.2), October Flash Services PMI (E: 49.3)) and if those numbers show solid activity and falling prices, stocks can extend the rally.
What’s in Today’s Report:
Futures are moderately lower following a disappointing night of earnings.
Thursday night was the first bad night of earnings as SNAP and WHR both posted underwhelming results, while numerous European companies also missed estimates.
Economically, the Japanese CPI ran hot (3.0% vs. (E) 2.9%), like virtually every other inflation indicator this week.
Today there are no economic reports and just one Fed speaker, Williams (9:10 a.m. ET), but he shouldn’t move markets.
Instead, the focus will continue to shift toward earnings and the markets needs some good results to rally today. Reports we’re watching today include: VZ ($1.28), AXP ($2.38), SLB ($0.55), HCA ($3.89).