Treasury yields surged again on the idea of even more rate hikes, specifically that the Fed could hike 50 bps (basis points) in May, June, and July…said Tom Essaye, founder of Sevens Report Research, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower on concerns about economic growth as COVID cases rose again in China while hopes for a diplomatic solution in Ukraine have all but faded.
China is continuing with its “zero COVID” policy and with cases rising again markets are fearing more shutdowns, perhaps in Beijing, which is a negative for global growth.
Russian President Putin essentially eliminated a diplomatic solution to the war, ensuring a further drawn-out conflict, which will also be a headwind on global growth.
Today there are no economic reports and no notable Fed speakers, but worries about global growth are the reason stocks dropped last week, so markets need some positive news on growth to stabilize in the near term.
On the earnings front, this is a very important week and while the most important reports don’t come out until later this week, two reports we’ll be watching today are KO ($0.58) and WHR ($4.90).
What’s in Today’s Report:
Futures are modestly lower following Thursday’s reversal lower as economic data and earnings were mixed overnight.
April global flash PMIs were mixed as the EU data was solid (55.8 vs. (E) 53.9), but the UK data was soft (57.6 vs. (E) 59.0). UK retail sales also badly missed (-1.4% vs. (E) -0.3%) and the lackluster data is weighing on European shares.
Earnings overnight were “ok” although SNAP underwhelmed investors (so expect more pressure on tech).
Today focus will be on economic data via the April Flash Composite PMI (E: 57.5) and markets will want to see stability in the data to further ward off stagflation concerns.
On the earnings front, there are only a few notable reports today (and all are in the morning): VZ ($1.35), AXP ($2.43), SLB ($0.32).
What’s in Today’s Report:
Futures are moderately higher as earnings continue to come in better than expected.
TSLA and UAL both posted better than expected earnings and UAL was very upbeat on travel spending and investors are viewing that as a positive macro-economic signal.
EU HICP (their CPI) slightly missed expectations (7.4% vs. (E ) 7.5% yoy), again hinting that inflation may be peaking.
Today will be a busy day with important Fed speak, economic data and earnings. The key event (potentially) is Fed Chair Powell speaking this morning and while he’s not likely to drop any surprises, it’s always possible. Economically, the key report today is the Philly Fed Manufacturing Index (E: 20.5) and markets will want to see stability in the data. We also get Jobless Claims (E: 175K) and Fed President Bullard (1:00 p.m) but they shouldn’t move markets.
On the earnings front, notable reports today include: T ($0.78), AAL (-$2.48), FCX ($0.88), PM ($1.48), UNP ($2.55), SNAP ($0.01), PPG ($1.13).
Unseasonably cold temperatures are driving elevated spring heating demand in the U.S. amid an already bullish fundamental backdrop of subdued inventory levels and no real signs of rising production in the near to medium term…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
Additionally, a geopolitical fear bid remains in the market and demand is expected to remain elevated leaving the path of least resistance decidedly higher with a medium-term upside target of $9.06…analysts at Sevens Report Research said in Monday’s newsletter, MarketWatch reports. Click here to read the full article.
U.S. natural-gas supplies are tight, sitting 23.9% below where they were last year and 17.8% below the five-year average…analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.
Looking at the yield curve, the 10s-2s spread continued to widen out and is now smack in the middle of the 30-40 basis point resistance range, and we think that’s a critical resistance level…said Tom Essaye, founder of Sevens Report Research, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures declined overnight as NFLX dropped sharply on disappointing earnings (specifically declining subscribers) but a pullback in yields has helped the market stabilize in early morning trade.
Economically, German PPI was the latest hot inflation print as the headline spiked 4.9% vs. (E) 2.3% M/M.
Looking into today’s session, there is a slew of potential catalysts for the market beginning with another report on the housing market: Existing Home Sales (E: 5.86M) and then a busy Fed speaker circuit with: Daly (10:30 a.m. ET), Evans (11:30 a.m. ET), and Bostic (1:00 p.m. ET) all scheduled to speak.
There is also a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could move yields and impact equity markets.
Finally, earnings season continues today with: PG ($1.29) ahead of the bell and TSLA ($2.27), UAL (-$4.15), AA ($2.99), and CSX ($0.38) due to report after the close.
The crude supply rise was partially explained by a steep and unexpected drop in the refinery utilization rate and contributed to a drawdown in gasoline and distillate stocks…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
