I wouldn’t go into treasuries. I think that inflation is here to stay. We don’t know exactly how high it will be, but it’s here to stay, and that’s negative for bonds…said Tom Essaye. Click here to watch the full interview.
The problem is that unlike 2013, the economy has an inflation problem, and the Fed is under enormous political pressure to rein in inflation…Tom Essaye of the Sevens Report noted. Click here to read the full article.
What’s in Today’s Report:
Stock futures are firmly higher as trader focus shifts ahead to the Fed while investors digest mostly upbeat earnings.
MSFT initially fell by 7%+ after earnings yesterday but a positive outlook by management during the investor call has helped shares turn positive and rise by more than 4%.
Looking into today’s session, there are two economic reports due out this morning: International Trade in Goods (E: -$95.1B) and New Home Sales (E 760K) but neither should move markets ahead of the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) which will be the main events today.
Earnings today include: BA (-$0.09), T ($0.76), FCX ($0.96), PGR ($0.99), TSLA ($2.26), INTC ($0.90), STX ($2.36), RJF ($1.77).
Bottom line, the market is coiled up after the volatile start to the week and whether the Fed is dovish or hawkish today will decide whether we see a relief rally or break down to new lows.
What’s in Today’s Report:
Futures are trading off of the overnight lows but still down roughly 1% as yesterday’s volatile session is digested ahead of the Fed while IBM posted strong Q4 earnings yesterday and economic data largely met estimates overnight.
The FOMC meeting begins today which will increasingly capture trader focus ahead of tomorrow’s announcement and press conference.
Economically, we get two reports on the housing market this morning: the Case-Shiller Home Price Index (E: 1.0%) and the FHFA House Price Index (E: 1.0%) but Consumer Confidence (E: 111.9) will be the more important number to watch given the growing uncertainty about the state of the economic recovery. Another bad print like we saw with yesterday’s Composite PMI Flash could send stocks lower.
There is a 5-Yr Treasury Note auction at 1:00 p.m. ET and investors will be looking for strong demand (which would reflect dovish shifting Fed expectations) as we saw with yesterday’s 2-Yr auction which helped stocks bottom and reversed so sharply in intraday trade.
Finally, on the earnings front, we will hear from: JNJ ($2.12), VZ ($1.28), GE ($0.83), MMM ($2.03), and AXP ($1.78) before the open, and then MSFT ($2.29), TXN ($1.95), and COF ($5.14) after the close.
A surge in risk-off money flows in the back half of the week have caused oil futures to give back the bulk of this week’s gains…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
Several companies cited higher costs as impacting profitability, furthering margin concerns…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower as escalating Russia/NATO tensions erased early solid gains.
Tensions between Russia and NATO increased over the weekend as the US and UK reduced embassy personnel, implying a military conflict could be imminent.
Economically, the EU flash manufacturing PMI beat estimates at 59.0 vs. (E) 57.9, but the UK number slightly missed (56.9 vs. (E) 57.3).
Today’s focus will be on the U.S. Flash January Composite PMI (E: 56.7) and markets will want to see stable data to ensure the economy is solid heading into future Fed rate hikes. On the earnings front, there are three notable reports today, HAL ($0.34), IBM ($3.39), and LOGI ($1.22), but the really important reports won’t come until later this week.
On the geopolitical front, headlines have turned more ominous regarding a conflict in Ukraine, but as long as it’s limited and there isn’t imminent risk of a larger Russia/NATO conflict, then markets should largely look past the issue as it won’t impact economic growth or Fed policy.
Supply concerns continue to linger after production and pipeline outages overseas buoyed prices last week…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
The various conflicts and threats across eastern Europe and the Middle East will remain supportive for energy in the near term, but it already appears that some of the supply and production disruptions are being…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower but that’s not that bad considering Thursday’s ugly close and the soft NFLX earnings overnight.
Earnings were generally underwhelming, highlighted by the soft NFLX guidance which sent the stock down 20% after hours. But, PPG and CSX also cited higher costs as impacting profitability, furthering margin concerns.
UK Retail Sales was the only notable economic number, and it missed estimates (-0.9% vs. (E) 3.4%).
Today there are no economic reports and just two notable earnings announcements, SLB ($ $0.39) and ALLY ($2.01), but they shouldn’t move markets. Instead, it’s all about tech. If tech can stabilize today, then markets can bounce (possibly into the Fed meeting next week).