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.
What’s in Today’s Report:
Futures are higher with most overseas markets today as COVID-19 case growth continues to slow in the U.S., economic data was better than feared overnight and investor focus is shifting ahead to Q1 earnings season.
In March, Chinese exports fell -6.6% vs. (E) -15.0% and imports were down -0.9% vs. (E) -8.0% suggesting the economic fallout from the coronavirus pandemic may be less than initially feared.
Today, there is one lesser followed economic report: Import and Export Prices (E: 3.1%, -2.0%), and two Fed officials are scheduled to speak: Bullard (11:05 a.m. ET) and Evans (12:30 p.m. ET).
But, the market’s main focus will be the start of Q1 earnings season, which is going to be extremely important as the corporate results and forecasts will provide much needed context on the outlook for 2020 EPS expectations in the coming weeks. Today, JPM ($2.49), WFC ($0.61), JNJ ($2.08), and FAST ($0.34) all report before the bell while JBHT ($2.22) will release results after the close.
What’s in Today’s Report:
Futures are flat as investors await earnings releases from several big banks this morning while the dollar is rallying after economic data in the EU missed expectations.
The German ZEW Survey showed deteriorating confidence among analysts for both the current state, and the future outlook of the German economy while the British Labour Market Report saw the largest jump in jobless claims since 2009 but also a sharp spike in wage growth (+3.4%). Both the euro and the pound are declining on the news, supporting a rally in the dollar.
From a news flow standpoint, it is lining up to be a very busy day.
Beginning with economic data, Retail Sales (E: 0.1%), Import & Export Prices (E: -0.5%, -0.1%), Industrial Production (E: 0.1%), and the Housing Market Index (E: 65) are all due to be released by 10:00 a.m. ET. Retail Sales will be the most important report to watch, but all of the data has the ability to move markets today.
Turning to the Fed, there are multiple speakers today: Bowman & Bostic (8:15 a.m. ET), Kaplan (12:20 p.m. ET), Powell (1:00 p.m. ET), and Evans (3:30 p.m. ET). Focus will clearly be on Powell in the early afternoon, but any other commentary that wavers from the markets expectations for a 25 basis point rate cut at the FOMC meeting this month could trigger some volatility.
Lastly, the earnings calendar picks up today and investors will be watching the several major banks due to release their Q2 results ahead of the bell: JPM ($2.50), GS ($4.82), and WFC ($1.16) very closely after yesterday’s mixed report from C.
JNJ ($2.42) is also due to report pre-market and we will get some transportation earnings after the close this afternoon: CSX ($1.11) and UAL ($$4.06).
Bottom line, earnings are in focus but even with solid corporate results, economic data will need to remain Goldilocks and Fed chatter needs to keep a dovish tone for stocks to continue to churn to fresh all time highs.
What’s in Today’s Report:
Futures are little changed following a generally quiet night as earnings remain in focus. Economic data was sparse overnight and isn’t moving markets.
Results after hours Wednesday were good as FB and MSFT both beat estimates, although that’s being offset partially by ugly MMM results this morning.
Today there are two notable economic reports, Durable Goods (E: 0.8%) and Jobless Claims (E: 209K) and it’ll be important to see some sort of stabilization in business spending via Durable Goods.
But, the real focus today will remain on earnings, as we get several important reports. If numbers are good in aggregate, this rally can continue. Some earnings we’re watching include – Pre-Open: UPS ($1.42), MMM ($2.50), MO ($0.92). After the Close: AMZN ($4.72), INTC ($0.87), SBUX ($0.56).