Additionally, gasoline supplied, a measure of implied demand, only bounced by 459,000 b/d (barrels a day) to 8.52 million b/d last week after the measure plunged 1.35 million b/d the prior week, which was the largest since the initial COVID lockdowns…wrote analysts at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher as markets bounce from Friday’s declines, following a quiet weekend and as investors look forward to numerous important catalysts this week.
Chinese authorities are considering some restrictions on movement in Shanghai as COVID cases rise, but are still resisting broad lockdowns (for now).
Economically, German Ifo Business Expectations declined further (80.3 vs. (E) 83.3).
Today there’s only one notable economic report, the Chicago Fed National Activity Index (E: 0.05), and markets will want to see stability here following last week’s disappointing data. If this number is surprisingly weak (like the PMIs last Thursday/Friday) then that will likely weigh on stocks as recession fears grow.
Earnings season continues and this will be a very busy and important week for results. Some earnings we’ll be watching today include: WHR ($5.22), NXPI ($3.39), and LOGI ($3.39).
What’s in Today’s Report:
Stocks are resilient this morning as futures are only slightly lower despite disappointing overnight earnings and ugly economic reports from Europe.
Earnings overnight were bad with several ugly reports including SNAP (-30%), COF (-3.5%), and STX (-13%).
Economically, July flash PMIs from the EU were also ugly as the composite PMI fell into contraction territory at 49.6 vs. (E) 51.0.
Hope that inflation has peaked is the reason stocks are resilient lately, so today’s focus will be on the July Flash Manufacturing PMI (E: 51.8) and the July Flash Services PMI (E: 52.3). If these reports show meaningful drops in the price indices (like we’ve seen in the Empire and Philly Fed surveys) then that will further the idea that inflation is peaking and support stocks (as long as the headline readings aren’t huge misses).
On the earnings front, results to watch today include TWTR (-$0.06), VZ $1.34), and AXP ($2.37).
What’s in Today’s Report:
Futures are slightly lower following a busy night of mixed earnings reports and ahead of today’s ECB decision.
Politically, Italian PM Draghi formally resigned and there will be elections in Italy this fall, which is adding to general macro-economic uncertainty.
Earnings overnight were mixed although TSLA posted solid results and the stock rallied 3% after hours.
Today will be a busy day for economic data and earnings and the key event is the ECB Decision. A 25 bps hike is expected although a 50 bps hike is very possible. From a stock standpoint, markets will be hoping for a 50 bps hike because that will boost the euro and weigh on the dollar (the dollar being this high is a problem for U.S. corporate earnings). Outside of the ECB we also get Jobless Claims (E: 240K) and Philadelphia Fed (E: -3.3).
On the earnings front, results continue to roll in and so far this season they are decidedly mixed (not good, but not materially worse than feared, either). Some results we’re watching today include: T ($0.59), FCX ($0.80), UNP ($2.38), COF ($5.09).
Biden’s visit to Saudi Arabia last week has “already become old news as traders refocus on the major influences on the oil market right now: the Russia-Ukraine war, OPEC+ policy outlook, and recession concerns linked to high inflation, COVID lockdowns in China, and aggressive central bank policy around the globe…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly higher this morning as yesterday’s sizeable rally is digested amid news that Russia will resume gas flows through the Nord Stream 1 pipeline this week.
Economically, German PPI came in below expectation but U.K CPI and PPI both came in slightly hot which is offering mixed signals regarding whether we have reached peak inflation not globally.
Looking into today’s session, we will get another report on the housing market: Existing Home Sales (E: 5.400M), and investors will again be looking for a less dismal print than Monday’s Housing Market Index release.
There are no Fed speakers today, but the Treasury will hold a 20-Yr Bond auction at 1:00 p.m. ET that could move yields and impact equity trading (especially if it sends yields meaningfully higher).
Finally, traders will remain focused on earnings with ABT ($1.07) and BIIB ($4.10) releasing results ahead of the bell and TSLA ($1.73), UAL ($1.86), CSX ($0.47), and DFS ($3.74) reporting after the close.
Bottom line, near-term market momentum has taken a decidedly bullish shift, and while we could see a modest pullback as yesterday’s outsized gains are digested further if news flow remains even slightly positive, the path of least resistance is still higher into the end of the week.
What’s in Today’s Report:
Stock futures are higher this morning despite soft earnings from IBM after the close yesterday as European inflation data was not as bad as feared in June.
Eurozone HICP (their CPI equivalent) met estimates with a rise of 8.6% Y/Y in June up from 8.1% in May, however, the core figure slipped to 3.7% Y/Y from 3.8% in May. The release has prompted new bets for a 50 bp hike from the ECB this week, but that is bolstering hopes that peak inflation will come sooner than later.
Looking into today’s session, there is one economic report to watch: Housing Starts (E: 1.588) and after yesterday’s terrible Housing Market Index print, investors will want to see a number more in line with expectations that does not point to such a rapid deterioration in the real estate market.
There are no Fed speakers or Treasury auctions today which will leave traders largely focused on earnings with: JNJ ($2.57), HAL ($0.45), LMT ($6.29), ALLY ($1.90), and TFC ($1.17) reporting before the bell, and NFLX ($2.90) and JBHT ($2.31) releasing results after the close.
Bottom line, the broader equity market remains at a key tipping point right now as recession fears continue to simmer, but earnings have so far been mostly upbeat suggesting there is still a path to a soft landing. And if earnings news is upbeat today, we could see the S&P 500 breakout through key downtrend resistance near 3,890 and make a run at new multi-week highs.
What’s in Today’s Report:
Futures are moderately higher mostly on momentum from Friday’s rally and following a generally quiet weekend.
Investors continue to hope for a near-term peak in inflation and Friday’s drop in University of Michigan inflation expectations (2.8% vs. (E) 3.0%) and multi-month lows in the Empire Manufacturing price indices fueled that hope and resulted in the rally on Friday and in futures this morning.
Today’s focus will shift to earnings, and they will dominate market action early this week as there are no Fed speakers and no market-moving economic reports till later this week. If earnings are better than feared, they can help extend this rally in the near term while disappointing results will cause more volatility. Some reports we’re watching today include BAC ($ 0.77), GS ($6.99), SCHW ($0.91), IBM ($ 2.29).
What’s in Today’s Report:
Futures are slightly higher on momentum from yesterday’s recovery and despite mixed Chinese economic data.
Chinese Industrial Production and Fixed Asset Investment both slightly missed estimates while Retail Sales beat expectations, but importantly the data didn’t show the Chinese economy had lost significant momentum.
Today there are numerous economic reports and some of them potentially will move markets. The most important report today is 5-Yr Inflation Expectations (3.1% previous) and if they drop to 3.0% or lower that will be a good sign on inflation. Retail Sales (E: 0.9%) and Empire State Manufacturing Index (E: -1.3) are the next most important reports today and again markets will want to see moderation – a slowing of activity but not a collapse. Finally, we also get Industrial Production (E: 0.1%) and Consumer Sentiment (E: 50.0).
We also have one Fed speaker today, Bostic (8:45 a.m. ET), and we’d expect him to follow yesterday’s script and push back on the inevitability of a 100 basis point hike (although acknowledge that anything’s possible depending on the data).
What’s in Today’s Report:
Futures are sharply lower as markets digest the hot CPI amidst numerous hawkish central bank decisions.
Global central banks are aggressively tightening policy and that was displayed yesterday and overnight as the Bank of Canada and the central banks of Singapore, Philippines, and, Chile all hiked more than expected.
Meanwhile, U.S. Fed Fund Futures are now pricing in a 100-bps hike in July.
Today we get two notable economic reports via Jobless Claims (E: 234K) and PPI (0.8% m/m, 10.4% y/y). Starting with PPI, if we see a big drop (which isn’t expected but possible) that will be a mild positive as PPI is sometimes a leading indicator for broader inflation. Jobless claims, meanwhile, should continue to tick higher towards 250k.
On the earnings front, Q2 earnings season unofficially kicks off today with results from JPM ($2.85) and MS ($1.55) and in addition to wanting to see earnings beats, markets will be looking for commentary from management on the state of the economy, and if that commentary is cautious it’ll be a headwind on stocks.