“To say a lot has transpired in the markets over the past three weeks would be an understatement,” Sevens Report analyst Tom Essaye wrote in a Thursday note to clients. Click here to read the full article.
Tom Essaye, president of Sevens Report Research, joins BNN Bloomberg to discuss what’s going on in the markets. Essaye says that the focuses this week are bank stability and inflation, and that he prefers defensive sectors right now such as consumer staples and healthcare. Click here to watch the full interview.
“The UBS move is easing some of the angst surrounding the recent turmoil in the banking sector,” wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are tracking European markets higher this morning thanks to a cooler-than-expected inflation print in Europe while news flow was otherwise mostly quiet overnight.
Economically, Eurozone PPI for February came in at -0.5% vs. (E) -0.3% m/m but a still lofty 13.2% vs. (E) 13.5% y/y. Despite the still elevated annual figure, the lower than expected print is bolstering risk assets this morning.
Today, there are three economic reports to watch in the U.S. including: Motor Vehicle Sales (E: 14.9 million), Factory Orders (E: -0.4%), and JOLTS (E: 10.4 million). Investors will want to see more evidence of slowing growth and a weakening labor market to reinforce hopes for both a less-hawkish Fed and soft landing in order for the recent stock market resilience to continue.
Finally, there is one Fed speaker to watch late in the day: Mester (6:45 p.m. ET).
What’s in Today’s Report:
Futures are little changed as oil prices are higher following a surprise OPEC+ production cut, while investors digest the recent rally.
OPEC+ announced a surprise production cut of 1.16 million bpd and oil rallied as much as 8% on the news, although it has backed off those highs (up about 5% currently).
Economically, the EU and UK manufacturing PMIs were generally in line with expectations and aren’t moving markets (47.3 for the EU and 47.9 for the UK).
Today focus will be on the ISM Manufacturing PMI (E: 47.5) and oil prices, and a continued steep rise in either (so a hotter than expected PMI or oil moving sharply higher from current levels) will be a headwind on stocks.
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What’s in Today’s Report:
Futures are little changed as global inflation and regional bank liquidity stress both remain elevated.
The Fed’s balance sheet shrank slightly as discount window borrowing dropped –22 bln. while BTFP lending increased 10.7 bln. as bank liquidity stress didn’t get much worse, but it didn’t get much better, either.
On inflation, EU HICP fell to 6.9% from 8.5% y/y, but core HICP rose to 5.7% from 5.6%, reflecting still sticky inflation.
For the final day of the first quarter focus will be on inflation and specifically the Core PCE Price Index (E: 0.4%, 4.7%) and investors need to see that number at or below expectations to further the “Fed Pivot” idea that’s supporting stocks. We also get Consumer Sentiment (E: 63.4) and the five-year inflation expectations and there’s one Fed speaker Williams (3:05 p.m. ET). As mentioned, if the data and Williams support the “Fed Pivot” idea, stocks can extend the rally. If they refute that idea, stocks could give back some of the recent gains.
“Bottom line, banks have reemerged as the primary influence on markets in the back half of the week and if the weakness in the sector continues today, stocks will have a very hard time extending yesterday’s modest bounce,” says Tom Essaye, the founder of Sevens Report Research. Click here to read the full article.
“The banks are the main driver of oil, and really all risk assets today, as fading confidence in the financial system is reigniting fears that another crisis may be looming after we saw some of the biggest bank failures since 2008 in early March,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
“However, the banks are the main driver of oil, and really all risk assets, as fading confidence in the financial system is reigniting fears that another crisis may be looming, after we saw some of the biggest bank failures since 2008 in early March,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher and are extending Wednesdays’ gains following better than expected inflation data overnight.
Spanish CPI, which was the first inflation indicator to warn of the stall in disinflation, rose just 3.3% y/y, less than the 3.8% expectation and much lower than the 6% y/y reading last month. That’s offering some initial hope that disinflation has restarted.
Today focus will be on economic data, with Jobless Claims (E: 195K) the key report, although we also get the Final Q4 GDP (E: 2.7%). There are also two Fed speakers today, including Collins (12:45 p.m. ET) and Barkin (12:45 p.m. ET) and markets will look for additional confirmation that the Fed has finally pivoted.