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Earnings and Tax Clarity but Fed Uncertainty?

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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

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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

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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

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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

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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.

Follow Up to “How Does the Rally Ultimately End?”

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What’s in Today’s Report:

  • Follow Up to “How Does The Rally Ultimately End?”

Futures are modestly higher mostly on momentum from Thursday’s earnings-driven rally.

Alcoa (AA) was the only notable earnings report overnight but like most reports on Thursday, it beat estimates.  While it’s very, very early in earnings season, so far the results are better than feared and that’s driving the rally.

Today is another busy day of economic data, Fed speak, and earnings.  Economically, the three key reports are Retail Sales (E: -0.1%), Empire State Manufacturing Index (E: 25.0), and Consumer Sentiment (E: 74.0).  Markets will want to see stability in the first two, and the focus will be on inflation expectations in the third (they need to stay close to last month’s readings).

On the earnings front, we have three notable reports today:  GS ($9.78), PNC ($3.64), JBHT ($1.77), and we also get two Fed speakers, Bullard (11:45 a.m. ET) and Williams (12:20 p.m. ET), with the latter being the more important of the two.

Focus Turns to Earnings and Yields

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What’s in Today’s Report:

  • Focus Turns to Earnings and Yields (And Away from Washington, For Now)
  • Weekly Market Preview:  Will Earnings Results Ease Market Anxiety?
  • Weekly Economic Cheat Sheet:  Key Inflation and Growth Data this Week

Futures are modestly lower on a resumption of the commodity rally following an otherwise quiet weekend.

Energy prices (oil, natural gas, coal) are all rallying again (up 2% – 3%) and that’s increasing global inflation anxiety, which is weighing moderately on futures.

Global bond yields are also rising as two hawkish Bank of England members warned of a possible rate hike this year, although that is not the consensus expectation (although a rate hike from the BOE in early 2022 is looking more likely).

Today is Columbus Day and the U.S. bond markets are closed and there are no economic reports today, although there is one Fed speaker: Evans (6:00 p.m. ET).  So, commodity prices are Treasury yields should drive trading today.  The more they rise, the stronger the headwind on stocks will become.

Tom Essaye Quoted in Bloomberg on August 24, 2021

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U.S. Stocks Top Record as Strong Earnings Continue: Markets Wrap

How the Fed tapers is the next major variable for this market…wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.

Tom Essaye Quoted in CNBC on August 2, 2021

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Dow tumbles nearly 100 points after late-day sell-off in stocks

At the end of the day, the stock market is driven by two things: 1) Earnings and…Tom Essaye, founder of Sevens Report, said in a note. Click here to read the full article.

Tom Essaye Quoted in The Byron Review on August 3, 2021

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Analysts increase third and fourth quarter estimates after second quarter blowout

On the earnings front, most of the systemically important companies are behind…wrote Tom Essaye in a recent memo. Click here to read the full article.