Posts

FOMC Preview

/in , /by

What’s in Today’s Report:

  • FOMC Preview
  • ISM Manufacturing Index – Takeaways

U.S. futures are trading slightly lower along with most overseas markets following mostly inline economic data and a less-hawkish-than-feared RBA meeting outcome.

The RBA struck a slightly dovish tone in their latest meeting announcement, especially with regard to inflation, which is pressuring bond yields this morning.

Today is lining up to be a fairly slow day with just one economic data point due out: Motor Vehicle Sales (E: 12.4M) while the focus will begin to shift to the November FOMC meeting which begins this morning.

There is a 52-Week Treasury Bill auction at 11:30 a.m. ET and while it is not typically a widely followed auction, the results could shed new light on investor expectations for rate hikes next year, and therefore could impact markets ahead of tomorrow’s Fed announcement.

Lastly, earnings season remains in full swing with several notable results due out today from: PFE ($1.08), UAA ($0.15), COP ($1.53), ZG ($0.16), TMUS ($0.54), LYFT (-$-0.04), PGR ( $1.09).

ECB Decision Takeaways (Not as Dovish as Hoped)

/in , /by

What’s in Today’s Report:

  • ECB Decision Takeaways (Not as Dovish as Hoped)

Futures are moderately lower following disappointing AAPL and AMZN earnings combined with hotter than expected headline inflation from Europe.

On earnings, AAPL and AMZN both underwhelmed investors and those stocks fell 3% and 5% after hours and the sheer weight of those names in the S&P 500 is weighing on the entire index.

On inflation, EU HICP rose to 4.1% vs. (E) 3.7%, a nearly 20-year high.

Focus today will be on inflation, as we get the Fed’s preferred inflation gauge via the Core PCE Price Index (E: 0.2%, 3.7%) and the Employment Cost Index (E: 0.9%).  Both numbers will be high, but markets will want to see hints of a plateau in inflation.  We also get Consumer Sentiment (E: 71.4) and the inflation expectations component will also be closely monitored.

On the earnings front, focus will be on the following results: XOM ($1.57), CVX ($2.21), CL ($0.79).

What’s Happening With the Yield Curve (Updated)

/in , /by

What’s in Today’s Report:

  • What’s Happening With the Yield Curve (Updated)
  • Oil Market Update and EIA Analysis

Futures are marginally higher on solid earnings, supply chain optimism, and dovish central bank commentary.

Ford (F) posted solid earnings and importantly made positive comments about semi-conductor supply (which has been echoed by numerous companies this quarter).  If we see semiconductor supply improve that will be a large positive for the entire supply chain and take some pressure off inflation.

The Bank of Japan made dovish commentary and reminded markets that not all central banks are getting less dovish (and we may hear that sentiment echoed from the ECB later this morning).

Today the key macro event is the ECB Decision (7:45 a.m. ET) and while the market does not expect any changes to QE or rates, it does expect President Lagarde to reinforce the ECB isn’t going to tighten policy anytime soon.  We also get some notable economic data including Advanced Q3 GDP (E: 2.7%), Jobless Claims (E: 290K), and Pending Home Sales (E: 1.7%) although unless there is a major surprise those reports shouldn’t move markets.

Finally, on the earnings front, today is arguably the single most important day of earnings season as we have two of the biggest stocks in the market, AAPL ($1.24), AMZN ($9.10), reporting after the close.  Other reports we’re watching include: MA ($2.18), CAT ($2.26), MRK ($1.54), SBUX ($1.00), and X ($4.85).

Tom Essaye Quoted in Barron’s on October 25, 2021

/in , /by

S&P 500, Dow Notch Record Highs Ahead of Tech Earnings

Companies have cited margin issues and supply chain disruptions, but so far managements have…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Valuation Update

/in , /by

What’s in Today’s Report:

  • Valuation Update
  • Gold Market Update: Breakout or Breakdown?

Futures are indicating an open at fresh record highs and international markets traded higher overnight as earnings continue to top expectations and economic concerns fade.

There were no notable economic reports or market-moving headlines overnight outside of more mostly upbeat earnings.

Looking into today’s session, there are several reports on the housing market due out early: Case-Shiller Home Price Index (E: 1.3%), FHFA House Price Index (E: 1.3%), and New Home Sales (E: 760K), but the most important economic release to watch today is Consumer Confidence (E: 109.0) as a disappointing print could weigh on consumer spending expectations into year-end.

There are no Fed officials scheduled to speak today however the Treasury will hold a 2-Yr Note Auction at 1:00 p.m. ET. The risk to equities is a soft outcome as that could rekindle the hawkish policy concerns that weighed on risk assets this past Friday.

Finally, earnings remain the main focus of the market right now and several big companies are due to report today including: UPS ($2.52), GE ($0.41), and SHW ($2.07) before the open, and AMD ($0.67), MSFT ($2.06), GOOGL ($23.13), V ($1.53) after the close.

Earnings and Tax Clarity but Fed Uncertainty?

/in , /by

What’s in Today’s Report:

  • Earnings and Tax Clarity but Fed Uncertainty?
  • Weekly Economic Cheat Sheet:  Key Inflation Data on Friday
  • Weekly Market Preview:  The Most Important Week for Earnings

Futures are slightly higher following a quiet weekend and ahead of the most important week of earnings season.

Regarding Fed tapering, Powell’s comments on Friday were taken as slightly hawkish, but the consensus outlook remains a November taper at $15 bln/month.

There was no notable news/progress from Washington over the weekend on the debt ceiling/spending bill.

Today there are no notable economic reports or Fed speakers (they’re entering the “quiet period” ahead of next week’s meeting).  So, focus will be on any updates from Washington on whether or not we get tax hikes and on earnings, although the vast majority of the biggest companies report later in the week.  Some reports to watch today include  FB ($3.20), LOGI ($1.14), OTIS ($0.73), and KMB ($1.66).

Yield Curve Update

/in , /by

What’s in Today’s Report:

  • Yield Curve Update

Futures are little changed following a night of mixed earnings and economic data.

Earnings overnight were disappointing with SNAP (down 20%) and INTC (down 3%) posting disappointing results, although they aren’t hitting the market broadly.

Economic data was mixed as UK flash PMI beat estimates (56.8 vs. (E ) 54.0) while the Euro Zone PMI slightly missed expectations (54.3 vs. (E ) 55.2).  But, neither number is materially moving markets.

Today the key economic report is the October Flash Manufacturing PMI (E: 60.7) and markets will want to see continued stability in the economic recovery.  We also get two Fed speakers, Daly (10:00 a.m.) and Powell (11:00 a.m.), although we do not expect anything incremental regarding tapering expectations (everyone now expects tapering to start in November).

On the earnings front, three notable reports we’ll be watching today are: AXP ($1.78), HON ($2.01) and SLB ($0.36).

Tom Essaye Interviewed on Yahoo Finance Live on October 19, 2021

/in , /by

The market reacting positively to earnings isn’t because they’re ‘so great’: Sevens Report Research Pres.

Tom Essaye, Sevens Report Research Founder and President, joins Yahoo Finance Live to discuss the market reaction to earnings season thus far, outlook on inflation… Click here to see the full interview.

Takeaways from Proctor and Gamble Earnings

/in , /by

What’s in Today’s Report:

  • Best Broad Natural Resource ETF: GNR vs. GUNR
  • Takeaways from Proctor & Gamble Earnings
  • Charts: Copper Breakout and 10-Yr. Yield Into Resistance

Stock futures are little changed this morning as investors digest recent gains and await more important earnings results.

On the inflation front, German PPI ran hot (2.3% vs. E: 1.0%), but EU HICP (their CPI) met estimates of 0.5% which is helping ease some price related concerns this morning (yields are off the overnight highs).

Looking into today’s session, there are no notable economic reports but multiple Fed speakers including: Bostic (12:00 p.m. ET), Kashkari (12:00 p.m. ET), Evans (12:00 p.m. ET), Quarles (1:00 p.m. ET), Bullard (1:45 p.m. ET), and Daly (8:35 p.m. ET).

Looking to earnings, focus will be on: VZ ($1.36), WGO ($1.98), and ABT ($0.92) reporting pre-market and then TSLA ($1.49), IBM ($2.49), PPG ($1.56), and DFS ($3.38) releasing results after the close.

Earnings in Focus

/in , /by

What’s in Today’s Report:

  • Bottom Line – Earnings in Focus
  • Charts: 10-Year Yield Meets Resistance, Global Inflation on the Rise

U.S. stock futures are pointing to a higher open today as bond markets remain largely steady and investors continue to focus on the solid start to Q3 earnings season.

There were no notable economic reports or market-moving headlines overnight.

Looking into today’s session, there is one economic report to watch: Housing Starts (E: 1.621M) and several Fed officials are scheduled to speak: Daly (8:00 a.m. ET), Harker (8:50 a.m. ET), and Bostic (1:00 p.m. & 2:50 p.m. ET). But as long as there are no major, hawkish shifts in tone by the Fed speakers, the market impact should be limited with the focus increasingly on earnings.

On the earnings front, we will get results from JNJ ($2.37), PG ($1.59), BK ($1.02), TRV ($2.04), SYF ($1.43) ahead of the bell, and then NFLX ($2.56), and UAL (-$1.65) after the close. The important thing investors will be looking for is any new insight on the impact of inflation and margin compression on earnings and importantly forward guidance.