Was Bullard That Hawkish? (No)

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What’s in Today’s Report:

  • Was Bullard That Hawkish?  (No).

Futures are moderately higher following more geo-political progress amidst an otherwise quiet night.

Russian officials signaled they are open to high-level talks with the U.S. on strategic stability, which is being taken as another (small) step towards an ultimate cease-fire.

Economically, the only notable number was UK Retail Sales and they were better than expected, rising 0.6% vs. (E) 0.2%.

Today the calendar is sparse with just Existing Home Sales (E: 4.360M) and one Fed speaker, Collins (8:40 a.m. ET) but if she doesn’t provide any hawkish surprises, this early rally can continue as stocks recoup yesterday’s Bullard inspired losses.

Are Corporate Earnings Rolling Over?

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What’s in Today’s Report:

  • Are Corporate Earnings Rolling Over?
  • Another (Small) Sign of Dis-Inflation
  • EIA Update and Oil Market Analysis

Futures are modestly lower as investors digest Wednesday’s earnings disappointments.

CSCO and NVDA reported after the close and both results were better than feared, but that’s not enough to offset growing concerns about future corporate earnings.

On inflation, October EU HICP slightly missed estimates  (10.6% vs. (E) 10.7%) although the monthly reading was in-line at 1.5%, signaling that inflation pressures in the EU aren’t declining.

Today’s focus will again be on inflation so the price indices in the Philly Fed Manufacturing Index (E: -7.0) will be the key reports and any declines in those price indices should prompt at least a small rally.  Outside of Philly Fed, we also get Housing Starts (E: 1.41M) and Jobless Claims (E: 222k), but neither should move markets.

There are also multiple Fed speakers today including Bostic (7:30 a.m. ET), Bowman (9:15 a.m. ET), Mester (9:40 a.m. ET), and Kashkari (10:40 a.m. ET & 1:45 p.m. ET), and we should expect their message to be consistent with recent Fed speak:  The size of rate hikes will shrink, but the Fed still has a long way to go to reach the “Terminal Rate.”

Tom Essayed Interviewed on BNN Bloomberg on November 14th, 2022

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We Could Be Approaching The Death Of The FAANG’s: Tom Essaye

Tom Essaye, founder and president of Sevens Report Research, joins BNN Bloomberg to recap earnings from big tech this week. Click here to watch the full interview.

What the Russia/Ukraine Headlines Mean for Markets

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What’s in Today’s Report:

  • What the Russia-Ukraine Headlines Mean for Markets
  • October PPI Data Takeaways
  • Empire State Manufacturing Survey Takeaways
  • Chart: 4,007 Remains Critical Resistance for the S&P 500

Futures have stabilized with global shares as easing geopolitical angst offsets more hot inflation data in Europe.

The AP reported the projectile that killed two in Poland on Tuesday originated in Ukraine (by their air defense systems) and not Russia which has eased concerns about NATO being pulled into the war between Russia and Ukraine.

Economically, U.K. CPI rose to 11.1% vs. (E) 10.6% in October, a fresh 41-year high which rekindled some global inflation fears overnight.

Today, the focus will be on the slew of economic data due to be released: Retail Sales (E: 1.0%), Import & Export Prices (E: -0.4%, 4.0%), Industrial Production (E: 0.2%), and the Housing Market Index (E: 36). The market will want to see a continued slowdown in growth metrics but more importantly, a faster slowdown in any price measures within the data as that dynamic would improve the prospects of a soft landing.

Additionally, the Fed speakers circuit remains active with: Williams (9:50 a.m. ET), Barr (10:00 a.m. ET), and Waller (2:35 p.m. ET) all due to speak over the course of the session.

Bottom line, if economic data and geopolitical headlines remain favorable today, the S&P 500 should be able to make another run at critical technical resistance at 4,007 in the S&P 500. A close above that level would open the door to another leg higher in the latest relief rally in the broader stock market.

Key Inflation and Fed Events to Watch

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What’s in Today’s Report:

  • The State of Inflation and Fed Speak After CPI (Key Events to Watch)

Futures are pointing to a rebound from yesterday’s profit-taking pullback amid risk-on money flows in China overnight.

Economically, Chinese Retail Sales surprisingly fell -0.5% vs. (E) +0.8% in October but the weak data was followed by the PBOC injecting $150B into the system in new near-term stimulus measures which helped Asian markets rally overnight.

Meanwhile, Warren Buffet has reportedly accumulated a more than $4B stake in TSMC which is helping semiconductors lead equity markets higher this morning.

Looking into today’s session, traders will be watching economic data early with PPI (E: 0.5%, 8.3%) and the Empire State Manufacturing Index (E: -7.6) due out before the open. For the equity rebound to resume we will want to see another cool inflation print from the PPI release and some signs of stabilization from the Empire release to help ease rising stagflation concerns.

There are also two Fed speakers to watch: Harker (9:00 a.m. ET) and Barr (10:00 a.m. ET). If they maintain a less hawkish tone, the S&P should be able to retest yesterday’s highs near 4,010, a key near-term technical resistance level.

Tom Essaye Quoted in Barron’s on November 11th, 2022

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Stocks Gain After Their Best Day Since 2020

“Renewed hopes for peak Fed hawkishness on the back of cooler-than-expected domestic inflation data unleashed a historic rally in equities,” writes Sevens Report’s Tom Essaye. Click here to read the full article.

Was Last Week’s CPI Report A Bullish Gamechanger?

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What’s in Today’s Report:

  • Was Last Week’s CPI A Bullish Gamechanger?
  • Weekly Market Preview:  Can Yields Keep Falling?
  • Weekly Economic Cheat Sheet:  More Key Inflation Readings This Week

Futures are modestly lower following some hawkish Fed comments and as investors digest last week’s big rally.

Fed Governor Waller made comments on Sunday that the Fed still has “a ways to go” before ending rate hikes, which is sapping some of last week’s soft CPI enthusiasm.

Positively, China continued progress towards abandoning “Zero COVID” and announced a stimulus plan for supporting the residential real estate market.

Today there are no notable economic reports and only one Fed speaker, Williams at 6:30 p.m. ET, but that won’t impact today’s trading.  So, we’d expect digestion of last week’s gains.  Politically, the Republican’s are still expected to win the House, but it will be close.  If Democrats look like they may win the House, that will likely weigh on markets as investors want a split government.

How Far Can Stocks Run (New Technical Targets)

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What’s in Today’s Report:

  • How Far Can Stocks Run? (New Technical Targets)
  • Why Did the Dollar and Treasury Yields Fall So Hard?

Futures are modestly higher on continued momentum from Thursday’s CPI report and as Chinese officials further signaled changes to their “Zero COVID” policy.

China made more than 20 changes to COVID policies overnight, all of which relaxed COVID rules and further signaled a departure from “Zero COVID.”

Economic data was mixed as German CPI met expectations at 10.4%, while UK GDP and Industrial Production were slightly better than expected.

Today the only notable number is Consumer Sentiment (E: 59.6) and specifically the Five-Year Inflation Expectations Index.  If that number falls further away from 3.0% (and drops to or below 2.7%) that will further fuel the idea that inflation pressures are receding, and stocks should extend the rally.

Sevens Report Analysts Quoted in ZeroHedge on November 8th, 2022

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WTI Extends Losses After API Reports Large Unexpected Crude Build

“The lack of a concrete timeline or any real details about plans to reopen the Chinese economy and move away from the still very strict and economically crippling restrictions weighed on the energy market into the afternoon,” wrote analysts at Sevens Report Research. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on November 8th, 2022

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Oil prices log back-to-back losses as investors assess China demand outlook

“The lack of a concrete timeline or any real details about plans to reopen the Chinese economy and move away from the still very strict and economically crippling restrictions weighed on the energy market into the afternoon,” wrote analysts at Sevens Report Research. Click here to read the full article.