Tom Essaye Quoted in CNBC on April 24, 2020
“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
“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 Quoted in Crain’s New York Business on April 14, 2020
“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…” Click here to read the full article.
Sevens Report Quoted in Market Beat on March 9, 2020
The positive feedback started off with B. of A. Securities strategists who noted that—once the panic finally died off—there was room for “huge rotation to growth stocks and bond proxies” to kick in. The Sevens Report noted that, currently, the S&P 500 was trading at 17 times estimated earnings for 2020, down from just under…Click here to read the full article.
Earnings Still Matter
What’s in Today’s Report:
- Earnings Still Matter: What Apple’s Guidance Cut Means for Markets
Stock futures are higher with global shares this morning as new cases of the coronavirus in China continue to fall while hopes for stimulus support tentative risk-on money flows.
China’s government is reportedly connecting IT companies with manufacturing facilities to help supply chain operations return to normal as soon as possible while speculation for more stimulus measures continues to rise.
Looking into today’s session, there are two economic reports to watch: Housing Starts (E: 1.420M) and PPI (E: 0.1%), and a slew of potential Fed catalysts.
The main focus will be the FOMC Meeting Minutes due out at 2:00 p.m. ET however there are also multiple Fed officials schedule to speak: Bostic (8:10 a.m. ET), Mester (8:30 a.m. ET), Kashkari (11:45 a.m. ET), Kaplan (1:30 p.m. ET), and Barkin (4: 30 p.m. ET).
The big risk for the market is any sort of hawkish surprise as investors have priced in a consistently dovish Fed for the foreseeable future and that remains one of the primary support pillars for stocks trading at current multiples.
Earnings Season Update
What’s in Today’s Report:
- Earnings Season Update (Not Great, But Not Bad, Either)
- What’s Up With Natural Gas?
Futures are flat as concern about the Wuhan coronavirus offset better than expected earnings.
Chinese authorities expanded the quarantine zone around Wuhan to limit the transmission of the disease, and that’s increasing fears of a bigger negative economic impact.
Earnings overnight were solid as TXN beat estimates, boosting semi-conductors and tech more generally.
Today we get an ECB Announcement, but no change in rates is expected and really markets will just want to hear a dovish tone from new ECB President Lagarde (which should happen).
Away from the ECB, Jobless Claims (E: 213K) is the key economic report, while earnings season continues to roll on. Some reports we’re watching today include: PG (E: $1.37) and INTC (E: $1.24).
What the Wuhan Coronavirus Means for Markets
What’s in Today’s Report:
- What the Wuhan Coronavirus Means for Markets
S&P 500 futures rallied to new record highs overnight amid easing concerns over the deadly virus outbreak in China that weighed on risk assets Tuesday.
Chinese health officials announced plans to both screen for, and contain the Wuhan coronavirus which helped reduce fears that a SARS-like epidemic is developing.
Today, there are a few different potential catalysts for the market that warrant watching. First, there are two economic reports on the housing market: FHFA House Price Index (E: 0.3%) and Existing Home Sales (E: 5.430M) which should show a continued rebound in the sector into the end of 2019.
Second, earnings season is in full swing and investors will continue to sift through the releases closely. Notable corporations reporting today include: JNJ ($1.87), ABT ($0.95), ALLY ($0.95), TXN ($1.02), KMI ($0.26), LVS ($0.80), and RJF ($1.90).
Lastly, any new developments on the spread, or containment of, the Wuhan coronavirus will likely get a reaction from markets as it was the primary focus of traders across asset classes yesterday.
Insight from a Wall Street Legend
What’s in Today’s Report:
- Insight from a Wall Street Legend
- Another Tipping Point for the Yield Curve
International markets were mixed overnight and stock futures are slightly lower as investors digest Chinese trade data and look ahead to the start of earnings season.
Final Chinese trade data from 2019 revealed a rise of just 0.5% in exports while imports dropped 2.8% on the year versus double digit gains in each in 2018. The trade figures underscore the detrimental effects of the trade war on the Chinese and broader global economies.
Looking into today’s session, focus will be on the unofficial start to earnings season as several major corporations are due to report, including three big banks: JPM ($2.32), DAL ($1.40), C ($1.82), and WFC ($1.12).
Beyond earnings, there is one key economic report to watch: CPI (E: 0.3%), while two Fed officials are scheduled to speak: Williams (9:00 a.m. ET) and George (E: 1:00 p.m. ET).
Tom Essaye Quoted in MarketWatch on November 7, 2019
“It’s a fair critique of corporate earnings to say that earnings “growth” in 2019 is a bit deceptive as the value is being financially engineered by corporate finance departments, not organic, core-business growth. Companies aren’t making any more money than…” wrote Tom Essaye, president of the Sevens Report, in a Wednesday note to clients. Click here to read the full article.
Why Markets Are Ignoring Bad Data
What’s in Today’s Report:
- Why Markets Are Ignoring Bad Economic Data
Futures are slightly higher following a generally quiet night of mixed earnings.
On the earnings front, AMZN missed earnings badly but INTC posted strong numbers and the two are largely offsetting one another.
Regarding U.S./China trade, there is a phone call between the two countries today where China will ask for the December tariff increases to be formally scrapped and the 9/1 tariff increases to be rescinded. If this happens, it’s a positive surprise.
Today the calendar is quiet as we have just one economic report, Consumer Sentiment (E: 96.0) and only a few notable earnings reports, VZ ($1.24) and BUD ($1.36).
So, focus will be on that U.S./China trade call, and if we see the September tariff increases rolled back, that will likely send the S&P 500 to new all-time highs.