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What’s Next for the Oil Market?

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What’s in Today’s Report:

  • Oil Market Outlook: Supply, Demand, and COVID-19
  • Economic Data Takeaways

Stock futures are modestly higher this morning while international markets were mixed overnight as investors weigh a fresh record number of new coronavirus cases in the U.S. against economic data that was mostly upbeat this week.

NFLX is notably down 7% in pre-market trade after the company reported disappointing Q2 results yesterday.

Economically, Eurozone HICP met expectations in June, rising 0.3% but the report did not materially move markets overnight.

Today,  investor focus will be on earnings early with three more notable financial companies reporting before the bell: ALLY ($0.33), BLK ($6.90), and CFG ($0.17).

Then there are two economic reports due out this morning: Housing Starts (E: 1.190M), and Consumer Sentiment (E: 79.3) while no Fed officials are scheduled to speak.

Bottom line, markets began to trade with a more cautious tone over the course of the week but for now, upbeat economic data has been able to offset rising new cases of COVID-19 in the U.S. and as long as underlying sentiment remains largely optimistic, stocks should be able to maintain or extend gains into the weekend today.

Economic Breaker Panel: July Update

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What’s in Today’s Report:

  • Economic Breaker Panel: July Update
  • Industrial Production and Empire State Manufacturing Survey Takeaways

Stock futures are trading lower today as new COVID-19 cases approached a record high Wednesday threatening the prospects for a continued global economic recovery.

Economically, Chinese data was mostly upbeat overnight with GDP, FAI, and Industrial Production all topping estimates however the nation’s June Retail Sales report missed expectations, causing a 4.5% pullback in the Shanghai Composite Index and general risk-off money flows around the globe.

Today, investors will be focused on Q2 earnings early with: BAC ($0.28),  MS ($1.17), JNJ ($1.50), and TSM ($0.73) all due to report before the bell while NFLX ($1.84), PPG ($0.72), and JBHT ($0.84) will all release quarterly results after the close.

Following the morning wave of earnings reports, focus will shift to economic data with: Jobless Claims (E: 1.323M), the Philadelphia Fed Survey (E: 20.0), Retail Sales (E: 5.3%), and Housing Market Index (E: 60) all scheduled to be released today (the first two reports will receive the most attention).

Beyond earnings and economic data, there are two Fed officials speaking today: Williams (11:10 a.m. ET) and Evans (1:30 p.m. ET) while the market will remain very sensitive to any news regarding rollbacks in the reopening process (bearish) as well as positive vaccine developments (bullish).

Market Multiple Levels: S&P Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart

Stock futures are trading with tentative gains this morning as investors digest yesterday’s late session reversal in the U.S. while focus shifts to the start of Q2 earnings season.

Internationally, there was a slew of economic data overnight and on balance the reports were moderately disappointing.

In the U.S. the NFIB Small Business Optimism Index rose to 100.6 vs. (E) 96.7 in June pointing to a continuing improvement in sentiment among business owners this summer.

Today, there is one economic report: CPI (E: 0.5%) and two more Fed officials are scheduled to speak: Brainard (2:00 p.m. ET) and Bullard (2:30 p.m. ET). As we saw with Kaplan’s comments yesterday, the market remains sensitive to Fed chatter right now as the threat of less accommodation, specifically through bond purchases, is not something priced into stocks right now.

The market’s main focus today however will be on the start to Q2 earnings season as several of the big banks are due to release their quarterly results before the open: JPM ($1.34), WFC (-$0.16), and C ($0.47). Additionally, we will get a look into the state of the airline industry via earnings from DAL (-$4.06) as investors ultimately try to decipher just how bad the economic fallout from the shutdowns in the first half of the year really were.

Tom Essaye Quoted in Equities.com on June 27, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as voluntary or potentially more…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Market Multiple Levels: S&P 500

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What’s in Today’s Report:

  • Market Multiple Levels S&P 500 Chart

U.S. equity futures are tracking European shares higher this morning thanks to ongoing hopes that the global economy will reopen and normalize quickly amid coordinated efforts while economic data was not quite as bad as feared overnight

Economically, the EU Composite PMI was 13.6 vs. (E) 13.5 in April while March Retail Sales declined -11.2% vs. (E) -12.0%. Both figures were considerably better than some analysts had feared helping boost risk assets.

Looking into today’s session, focus will be on the first look at April payrolls data in the U.S. in the form of the ADP Employment Report, for which the consensus analyst estimate is for a staggering drop of 20 million in private payrolls. Later in the day, Atlanta Fed President, Bostic, will speak at 1:30 p.m. ET.

While investors are primarily concerned with the economy reopening, Q1 earnings continue to roll in with several notable releases that could move markets today: SHOP (-$0.19), CVS ($1.63), GM ($0.18), SQ ($0.13), PYPL ($0.76), LYFT (-$1.08), and WYNN (-$1.05).

Seizing Long Term Opportunities in Energy

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What’s in Today’s Report:

  • Seizing Long Term Opportunities in Energy

Futures are higher this morning while international equity markets are mixed as strong tech earnings offset soft economic data ahead of the FOMC Announcement today.

GOOGL is up 8% in pre-market trade after reporting strong Q1 results after the close yesterday while the European Commission’s Economic Sentiment Index fell more than expected, down to 67.0 vs. (E) 75.0 as the fallout from the coronavirus pandemic has weighed heavily on business activity.

Today, there are two economic reports to watch: GDP (E: -3.8%) and Pending Home Sales Index (E: -5.4%) but the main focus during the primary session will be on the FOMC Meeting Announcement (2:00 p.m. ET) followed up by Fed Chair Powell’s Press Conference (2:30 p.m. ET).

Earnings season also remains in full swing with: BA (-$2.04), MA ($1.72), HUM ($4.84), NOC ($5.42), YUM $0.64), SHW ($4.01), and VLO (-$0.19) all reporting ahead of the bell while MSFT ($1.27), FB ($1.72), QCOM ($0.80), and TSLA (-$0.53) release their Q1 results after the close.

The main thing investors are looking for today is reassurance from the Fed, specifically that they remain committed to doing “whatever it takes” to support the economy through the COVID-19 pandemic and are focused on restoring the economy to its previous state as quickly as possible.

Fed Meeting Preview

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What’s in Today’s Report:

  • FOMC Preview

S&P futures are up 1% this morning, tracking European shares higher as economies around the globe begin to reopen while investor focus shifts ahead to the slew of earnings releases in the coming days as well as multiple central bank meetings this week.

Coronavirus headlines were mostly positive overnight as there were reports of expanded testing capabilities in the U.S., the growth rate of new cases continues to slow in the U.S., and states across the country are beginning the process of lifting COVID-19 containment policies.

The FOMC meeting begins today (concluding tomorrow) while there are a few notable economic reports to watch this morning: International Trade in Goods (E: -%51.5B), S&P CoreLogic Case-Shiller HPI (E: 0.4%), and Consumer Confidence (E: 95.0).

Investors will be increasingly focused on earnings this week as we approach the peak of the Q1 reporting season.

There are several major corporations, from manufacturing to tech sectors, releasing results today including: MMM ($2.02), PEP ($ 1.02), PFE ($0.71), UPS ($1.23), CAT ($1.77), MRK ($1.39), LUV (-$0.48), BP ($0.28),  AMD ($0.18), GOOGL ($10.97), F (-$0.10), CHRW ($0.71).

Tom Essaye Quoted in CNBC on April 24, 2020

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“Looking ahead, it’s still all about demand for oil right now, and so far there is little evidence to support the idea…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

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Tom Essaye Quoted in Herald Dispatch on April 15, 2020

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“This will be a unique earnings season,” Tom Essaye, a former Merrill Lynch trader who founded the “Sevens Report” newsletter, wrote in a note. “But it remains critically important because it’ll give us microeconomic insight into the question of ‘How bad is the damage?’…Click here to read the full article.

Tom Essaye

Tom Essaye Quoted in Crain’s New York Business on April 14, 2020

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