Futures are slightly higher following a mostly quiet weekend of news as markets look ahead to Wednesday’s CPI, wrote Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures are down modestly this morning, tracking global shares lower after soft earnings while focus turns to today’s CPI data.
ABNB shares are down 14% in premarket trade after the company offered disappointing revenue guidance after the close yesterday and that is weighing modestly on equities this morning.
Economically, German CPI was unchanged at 7.2% y/y in April, meeting analysts’ estimates, but importantly, the headline remains very elevated and much beyond policy makers’ 2.0% target which will support further tightening in the months ahead.
Looking into today’s session, U.S. inflation data will be in focus with CPI (E: 0.4% m/m, 5.0% y/y) due at 8:30 a.m. ET, but the more important figure to watch is Core CPI (E: 0.4% m/m, 5.5% y/y) as a print above 5.5% will raise concerns that price pressures are sticky and not declining which will warrant a continued, aggressive stance by the Fed.
There are no Fed officials scheduled to speak today but there is a 10-Yr Treasury Note auction at 1:00 p.m. ET that could move markets, especially in the wake of the CPI data as investors look for insight as to how the “smart market” is digesting the latest look at inflation.
Finally, earnings season is winding down but there are a few notably companies reporting today: TM ($2.83) before the open, and DIS ($0.89) after the close.
What’s in Today’s Report:
Stock futures are lower this morning after soft economic data overseas and growing angst about the debt ceiling.
Chinese merchandise trade data for April revealed a -7.9% drop in imports vs. (E) -0.2% which has poured some cold water on hopes for a strong recovery in the world’s second largest economy.
In the U.S., the NFIB Small Business Optimism Index came in at 89.0 vs. (E) 89.7 for the month of April but the release is not materially moving markets this morning. There are no additional economic reports today.
There are two Fed officials scheduled to speak today: Jefferson (8:30 a.m. ET) and Williams (12:05 p.m. ET) as well as a 3-Yr Treasury Note auction at 1:00 p.m. ET, all of which have the potential to impact markets in intraday trade.
With increasing focus on the debt ceiling, investors will be keenly focused on today’s meeting between President Biden and Congressional leadership as hopes for a delay to September are building and any disappointment of those hopes could result in volatility across asset classes.
What’s in Today’s Report:
Futures are slightly higher following a mostly quiet weekend of news as markets look ahead to Wednesday’s CPI.
News was slightly positive on the debt ceiling over the weekend, as reports indicate the White House will try to negotiate a short term debt ceiling extension (to the end of September). However, it remains uncertain if even this short-term deal can get done before the “X” date.
Economically, German Industrial Production missed estimates (-3.4% vs. (E) -1.5%) but that’s not moving markets.
Today there are no notable economic reports but there is a potentially important release at 2:00 p.m. via the Bank Senior Loan Office Survey. Markets (and the Fed) are nervous the regional bank stress will curtail lending and put a bigger headwind on the economy. If the loan officer survey reflects that reality (a drop in bank lending) it could cause volatility as that would increase the chances of a potential hard landing.
Sevens Report Technicals – First Issue Being Delivered To Trial Period Subscribers This Morning!
We have been thrilled with the response to our new research offering: Sevens Report Technicals and we are very excited to deliver the first official issue later this morning. Sevens Report Technicals will be similar in appearance to the special technical report we sent out two weeks ago, which you can view here.
This new report will offer a “deep dive” into the technical dynamics of all of the asset classes we cover in the daily Sevens Report including:
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What’s in Today’s Report:
Futures are moderately higher ahead of the jobs report thanks to solid earnings overnight.
Earnings overnight were good, highlighted by AAPL and SQ, which both rallied after hours and are helping lift futures.
Economic data underwhelmed as both the Chinese Composite PMI and German Manufacturers’ Orders missed expectations, but the numbers aren’t moving markets.
Today focus will be on the jobs report and expectations are as follows: 178K Job Adds, 3.6% Unemployment Rate and 0.3% m/m,4.2% y/y wages. As we cover in the Report, risks to this jobs number are two sided, as a “Too Hot” number could reverse the Fed pause expectations, while a “Too Cold” number will spike hard landing fears. So, the market needs a number at or modestly below the expectation, and if it gets that “Just Right” number, stocks can rally today.
We also get two Fed speakers today, Cook (1:00 p.m. ET) and Bullard (1:00 p.m. ET), but neither should move markets.
What’s in Today’s Report:
Futures are slightly lower following more regional bank turmoil and disappointing earnings.
Pac West (PACW) announced overnight that it’s seeking “strategic alternatives” and the stock dropped more than 30% pre-market and is weighing on other regional banks.
On earnings, EL and QCOM both missed estimates and that’s also weighing on sentiment.
Today focus will initially be on the ECB Rate Decision (E: 25 bps hike) and economic data via Jobless Claims (E: 238K) and Unit Labor Costs (E: 3.9%). Markets will want to see 1) A not too hawkish ECB (so no 50 bps hike), 2) A mild uptick in jobless claims (signaling more balance in the labor market) and 3) A drop in Unit Labor Costs (implying wage pressures are easing). If we get the opposite of those events, expect more declines today.
After the close we get what’s likely the most important earnings report of the season, AAPL ($1.44), and a solid number there would help sentiment.
What’s in Today’s Report:
Futures are slightly higher despite more pain in regional bank shares in the pre-market and soft tech earnings from late yesterday as focus shifts to today’s Fed decision.
AMD is down 7%+ after a disappointing sales forecast late yesterday while shares of PACW and WAL (which fell sharply yesterday and weighed on the broader banking complex) are both down 7% to 12% in pre-market trade this morning.
Economically, Australian Retail Sales were better than expected while the Eurozone Unemployment Rate dipped which saw bond yields move off the overnight lows.
Looking into today’s session there are two important economic reports to watch as they could alter Fed policy expectations depending on how they come in. The ADP Employment Report (E: 143K) is due out before the bell while the ISM Services Index (E: 51.7) will be released at the top of the 10:00 a.m. hour ET.
From there focus will turn to the Fed with the FOMC Decision at 2:00 p.m. ET (E: +25 bp) and Fed Chair Powell’s press conference at 2:30 p.m. ET. How the Fed handles forward guidance in the statement and any insights Powell provides in the presser will be the key factors in determining whether stocks extend yesterday’s declines or stabilize and recover to test the YTD highs.
Sevens Report Technicals – A New Timely Report Dedicated to Technical Analysis
Response to our announcement of Sevens Report Technicals was tremendous yesterday, and we are very excited to produce the first issue this coming Monday (May 8th) and deliver compelling value!
Sevens Report Technicals will be similar in appearance to last week’s special technical report, which you can view here.
During this launch phase we continue to offer an additional month free on any quarterly (savings of $75 dollars) or annual (savings of $150 dollars) subscription.
With a one month “Grace Period” during which you can receive a full refund for any reason, you take no risk trying Sevens Report Technicals to see if it’s a complement to your business or investment process.
To start your risk-free trial subscription, please send an email to info@sevensreport.com. To learn more about Sevens Report Technicals, click this link.
What’s in Today’s Report:
Stock futures are slightly lower as investors digest an unexpected rate hike by the RBA and mixed economic data overnight.
The RBA raised rates 25 bp to 3.85% overnight (E: no change) citing stubbornly high inflation which triggered a hawkish reaction in markets in overnight trading.
Economically, European Manufacturing PMI data was largely in line with estimates although the readings remained deep in contraction territory while the “Narrow Core” HICP Flash reading for April was 5.6% vs. (E) 5.7%, the first decline in the reading in 10 months. On balance, the European data eased some of the hawkish concerns weighing on risk assets in pre-market trading.
Today, there are a few economic releases to watch: Motor Vehicle Sales (E: 14.8 million), Factory Orders (E: 1.3%), and JOLTS (E: 9.650 million) and investors will want to see signs of a continued but steady slowdown in growth and easing price pressures in order to keep soft landing hopes alive.
Earnings season continues today with UBER (-$0.10), PFE ($1.00), BP ($1.33), MPC ($5.75), and SYY ($0.92) reporting before the bell, and AMD ($0.56), F ($0.39), and SBUX ($0.64) after the close.
Introducing Sevens Report Technicals – A New Timely Report Dedicated to Technical Analysis
I’ve always wanted to do more to help advisors grow their businesses, and the incredibly enthusiastic response to last week’s special technical report confirmed to me that there is a need for more technical research.
So, today I’m very proud to announce the creation of a new research solution to complement the daily Sevens Report: Sevens Report Technicals.
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Ten-year Sevens Report veteran Tyler Richey, CMT, will be the lead analyst on Sevens Report Technicals.
Sevens Report Technicals will be delivered at the start of each trading week, and will be similar in appearance and coverage to last week’s popular special technical report. The first issue will be delivered this coming Monday, May 8th.
Sevens Report Research is a retention-driven business, so like all our research products, pricing for Sevens Report Technicals will be among the lowest in the industry for the quality and depth of analysis provided at just $225/quarter or $825 per year (a savings of $75). We are also extending a one month “Grace Period” where you can choose to cancel and receive a full refund—so there is literally no risk to try Sevens Report Technicals and see if it’s right for your business!
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To see last week’s special edition technical report, click here.
To learn more about Sevens Report Technicals, including the inspiration behind it, please click this link.
What’s in Today’s Report:
Futures are little changed as markets digest the FRC seizure and asset sale to JPM and look ahead to this week’s FOMC decision and important economic data.
First Republic (FRC) failed over the weekend and was seized by the FDIC. Assets were then sold to JPM who will effectively absorb the bank. FRC’s failure was widely expected, and as such it’s not a new negative on markets.
Economically, the Chinese April manufacturing PMI missed expectations and fell back below 50 (49.2 vs. (E) 51.4.).
Today there is only one notable economic report, the April ISM Manufacturing PMI (E: 46.8), and markets will want to see stability in the data (so no further declines).
On the banks, again FRC’s failure was priced in last week, so it’s not a new negative on markets. The key now is seeing if any other regional banks with large uninsured deposits come under pressure, so as we said last week, we’ll be watching WAL, CMA and ZION over the coming days.
The lower than expected deposit levels rekindled worries about the health of the banking system and financials are dragging the broader market lower this morning, writes Tom Essaye, founder of the Sevens Report. Click here to read the full article.
