Oil prices, meanwhile, finished higher. Global demand and supply will determine if WTI crude can “trade sustainably” above $80 a barrel in the near term, analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.
The disappointing Chinese economic data offset an increase in Russia/Ukraine tensions to push commodity prices lower on Monday, analysts at Sevens Report Research wrote in Tuesday’s newsletter. “A Chinese economic slowdown, if it happens, will add to demand concerns” they said. Click here to read the full article.
Despite numerous warning signals from cross asset analysis, including the still deeply inverted yield curve, Dow Theory, which is one of the most historically accurate strategies to identify the primary trend in the stock market, is now saying the path of least resistance is higher for the first time since April of 2022, said Tom Essaye, founder of Sevens Report Research and a former Merrill Lynch trader, in a Monday note to clients. Click here to read the full article.
While it’s undeniable that fears of a hard landing, inflation and hawkish Fed have not materialized, the reality is that the current level of the S&P 500 largely factors all of that in, so last week’s CPI and PPI reports didn’t provide the market with a new positive catalyst, but instead just reinforced what was already widely assumed,” Tom Essaye, founder of Sevens Report Research, wrote in a Monday note. Click here to read the full article.
However, last week’s readings point toward falling inflation and stable economic growth—a goldilocks scenario, or Immaculate Disinflation, as Sevens Reports’ founder Tom Essaye writes. However, last week’s readings point toward falling inflation and stable economic growth—a goldilocks scenario, or Immaculate Disinflation, as Sevens Reports’ founder Tom Essaye writes. Click here to read the full article.
Sevens Report analysts: “At current levels, the S&P 500 has priced in 1) No hard landing, 2) Falling inflation and 3) A Fed that won’t be raising rates much longer (and possibly cutting soon after). That’s basically the best outcome anyone could have hoped for at the start of the year, and that means the gains in stocks are legitimate, but also likely exhausted in the near term and it’ll take something else to push stocks materially higher from here.” Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher on more Goldilocks global economic data and after there were no major earnings disappointments overnight.
Economically, Japanese CPI met expectations (up 3.3% y/y) while UK Retail Sales were better than expected (0.7% vs. (E) 0.1%).
On earnings, transports CSX and KMX both missed estimates, but it’s not impacting the broader markets as results were expected to be soft and the companies offered some positive commentary.
Today there are no notable economic reports so focus will be on earnings, and the highlight today is AXP ($2.80), as markets will want to hear insight into the state of more affluent spenders. Other notable results today include AN ($5.83) and CMA ($1.89).
What’s in Today’s Report:
Futures are slightly lower following a night of disappointing tech earnings.
NFLX, TSLA and TSM all posted disappointing earnings results (stocks down 3% – 6% pre-market) and that’s weighing on Nasdaq and S&P 500 futures.
There was no notable economic data overnight.
Today will be another busy day of data and earnings results. On the economic front, the two key reports are Weekly Jobless Claims (E: 250k) and Philly Fed (E: -10.0), and as you can guess (and especially at these stretched valuations) markets will want to see more Goldilocks data (so stable claims and Philly and falling prices). We also get Existing Home Sales (E: 4.23M) but, barring a big miss, that shouldn’t move markets.
Turning to earnings, focus today is on industrials and consumer/healthcare names, and some important results to watch include: AAL ($1.58), TSM ($1.07), JNJ ($2.61), PM ($1.48), COF ($3.31), CSX ($0.49), and PPG ($2.14).
What’s in Today’s Report:
Futures are little changed ahead of a busy day of earnings and despite more encouraging news on global disinflation.
UK CPI rose less than expected, gaining 0.1% vs. (E) 0.4% m/m and 7.9% vs. (E) 8.2% y/y, providing bullish investors more evidence that inflation is declining globally, although that good news was partially offset by a very slightly higher final look at EU HICP (up 5.5% y/y vs. 5.4%).
Today focus will turn to earnings and the key reports to watch are: TSLA ($ 0.82), NFLX ($2.83) and GS ($3.25), as those results will help set the tone for the start of earnings season (results from companies up to today have been fine, although it’s very, very early). Other notable earnings include: ASML ($4.97), USB ($1.13), UAL ($3.99), and IBM ($2.00).
Economically, the only notable number today is Housing Starts (E: 1.48M) but barring a shocking miss, that shouldn’t move the broader markets.
What’s in Today’s Report:
Futures are little changed following a generally quiet night of news as markets look ahead to important economic data and the start of a deluge of earnings results this week.
Economically, there was no data overnight while there was more vague talk of Chinese stimulus, but nothing concrete.
Today the calendar is full of notable economic reports and earnings. Starting with economic data, Retail Sales (E: -0.3% mm, 1.6% y/y) is the key report today and markets will want to see stability in the data to further the “Golidlocks” narrative of falling inflation and stable growth. So, no big disappointments. We also get Industrial Production (E: 0.0% m/m, 1.10% y/y) and the U.S. Housing Market Index (E: 56.0) and again stability is the key word for both reports.
On earnings, most of the results today will be focused on banks/financials, but the bottom line is markets want to hear solid guidance and economic commentary to further dispel hard landing worries. Important reports today include: BAC ($0.84), SCHW ($0.72), MS ($1.14), LMT ($6.43), PNC ($3.31), WAL ($ 1.98) and JBHT ($1.97).