“Stocks are grinding relentlessly higher into year-end on continued momentum from the positive resolution of four key events: A phase one trade deal…” Tom Essaye, the founder of Sevens Report, said in a note. Click here to read the full article.
“Stocks are grinding relentlessly higher into year-end on continued momentum from the positive resolution of four key events: A phase one trade deal, a dovish Fed…” Tom Essaye, founder of Sevens Report, said in a note on Monday.
What’s in Today’s Report:
Stock futures are flat amid continued Brexit uncertainty ahead of a very busy day of earnings in the U.S.
Economically, the French Business Climate Indicator fell to a more than 4 year low of 99 vs. (E) 102, underscoring the recent trend of weakness in the EU manufacturing sector.
Looking into today’s session there we will get one more data point on the housing market: FHFA House Price Index (E: 0.4%) while no Fed officials are scheduled to speak.
On the earnings front, the Q3 reporting season is nearing its peak with notable reports from: BA ($2.04), CAT ($2.83), FCX (-$0.01), GD ($3.06), WGO ($0.98), and NSC ($2.57) due out before the bell while TSLA (-$0.41), MSFT ($1.25), PYPL ($0.66), F ($0.26), and EBAY ($0.64) will release after the close.
Bottom line, markets will remain sensitive to any material developments regarding Brexit or the Trade War but investor focus is increasingly shifting to earnings, and if reports remain healthy, the S&P could reclaim 3,000 and potentially drift towards the all-time highs.
What’s in Today’s Report:
Futures are slightly higher on continued hopes of Brexit resolution and improvement in U.S./China trade relations.
The vote on the new Brexit deal was delayed in Parliament on Saturday, but it’s likely to happen today or tomorrow and passage of the deal is (narrowly) expected.
On U.S./China trade, Chinese Vice Premier Liu He made positive comments on U.S./China trade negotiations although he didn’t say anything new.
Today there are no economic reports and just one Fed speaker, Bowman (11;40 a.m. ET). So, the focus will be on Brexit headlines as a final vote on the Brexit deal in Parliament could happen later today. If the Brexit deal passes Parliament, we could see a short term rally, although again I don’t think Brexit resolution is enough, by itself, to send stocks sustainably higher from here.
What’s in Today’s Report:
Futures are little changed following mixed Chinese economic data.
Chinese GDP missed estimates at 6.0% vs. (E) 6.1%, while Retail Sales met expectations at 7.8% and Industrial Production beat (5.8% vs. (E) 4.9%). In sum, the data is slightly underwhelming but isn’t changing expectations for global growth.
Looking forward to today, there are no economic reports but there are a lot of Fed speakers including (in order of importance): Clarida (11:30 a.m. ET), George (10:00 a.m. ET), Kaplan (9:00 & 11 a.m. ET), Kashkari (10:30 a.m. ET). But, none of them should say anything too surprising and they shouldn’t move markets.
So, markets will stay focused on earnings and Brexit headlines. Regarding Brexit, a vote on the new Brexit deal will happen Saturday in Parliament, and at this point passage looks to be a 50/50 chance. So, there’s more drama yet in the three plus year Brexit saga.
What’s in Today’s Report:
Futures are modestly higher following news of a new Brexit agreement.
The EU and Britain have agreed to a new Brexit deal that solves the Northern Ireland border issue. However, it remains unclear if the deal can get through Parliament, and remember that Parliament killed the last Brexit agreement between Britain and the EU
Economically, British Retail Sales slightly missed estimates (flat vs. (E) 0.2%) but that’s not moving markets.
Today focus will be on earnings (some notable reports include MS: $1.10, PM: $1.35 and UNP: $2.29).
Additionally, there are several economic reports including (in order of importance): Philly Fed (E: 7.1), Industrial Production (E: -0.2%), Jobless Claims (E: 210k) and Housing Starts (E: 1.3M). Broadly speaking, the stronger the data, the better for stocks.
What’s in Today’s Report:
Stock futures are in the red this morning and international markets were mostly lower overnight thanks to on-going trade tensions and more political drama in Europe.
The latest set of U.S. tariffs on Chinese goods went into effect over the weekend as expected however there were no updates regarding this month’s scheduled trade talks which is weighing on risk assets this morning.
Brexit concerns continue to simmer as the odds of a no-deal exit from the EU creep higher ahead of the October deadline but for now, the situation is largely isolated to Europe and not having a significant impact on U.S. equity markets.
Economic data was mixed overnight but there were no material, market moving surprises.
Today, there are two economic reports to watch: ISM/PMI Manufacturing Indexes (E: 49.9) and Construction Spending (E: 0.3%) while the Fed’s Rosengren is scheduled to speak shortly after the close (5:00 p.m. ET).
Investor focus will primarily remain on the trade war however, so any positive headlines regarding the planned, in-person negotiations this month will be well received while a continued lack of clarity on the topic will be a headwind for stocks.
What’s in Today’s Report:
It’s an ugly morning as futures are down about one percent as markets digest disappointment from the week’s two big events, the FOMC Minutes and the global flash PMIs.
EU flash PMIs missed estimates at 51.6 vs. (E) 51.7 but EU and German manufacturing PMIs were especially weak (47.7 & 44.3) and that’s negative for global growth.
Yesterday’s FOMC Minutes were slightly hawkish and confirmed the Fed isn’t close to a rate cut right now.
Given the soft foreign data, the key report today is the flash Composite PMI (E: 52.4). If that number is soft, it’ll further stoke worries about global growth and will be a negative for stocks. Other reports today include Jobless Claims (E: 215K) and New Home Sales (E: 680K).
Bottom line, this market is facing several headwinds and support at 2800 is now important, but should likely hold unless hopes for a Trump/Xi meeting at the G-20 meeting are dashed, or U.S. growth begins to roll over.
What’s in Today’s Report:
Stock futures are marginally higher this morning after a very quiet night of news while no major international market moved more than 1% overnight.
Asian shares declined modestly after a report that Japanese Machine Orders fell –5.4% in January vs. (E) -1.9%.
In Europe, EU Industrial Production beat expectations (1.4% vs. E: 1.0%) while focus remains on today’s “hard Brexit” vote in the U.K. (which is very unlikely to pass).
Looking into today’s U.S. session, focus will be on economic data early with two reports due ahead of the bell: Durable Goods Orders (E: -0.8%), PPI (E: 0.2%), and one shortly after the open: Construction Spending (E: 0.3%).
There are no Fed officials speaking today so investor focus will shift to the “hard Brexit” vote but it is very unlikely to pass which will result in another vote to delay the Brexit date tomorrow. This scenario is priced in however and should not materially move markets.
What’s in Today’s Report:
U.S. futures are modestly higher this morning, tracking gains in Asian shares thanks to chatter of further stimulus measures by the Chinese government.
EU markets are underperforming however as focus remains on today’s Brexit vote and more key bank earnings.
Looking to the Wall Street session, the major focus will be on earnings as JPM ($2.20), WFC ($1.17), and DAL ($1.27) all report before the bell. The banks will be the main focus after C’s results were received well yesterday.
Economically, PPI (E: 0.2%) is due out ahead of the bell while the Empire State Manufacturing Survey (E: 12.0) will print at the top of the 10 o’clock hour. The Empire number could potentially move markets as survey-based data badly underwhelmed in December, contributing to the last wave of significant volatility in 2018.
Lastly, there are three Fed speakers today: Kashkari (11:30 a.m. ET), Kaplan (1:00 p.m. ET), and George (1:00 p.m. ET) but their comments should not materially move markets as they are expected to reiterate a more dovish stance on future policy.