Tom Essaye Appeared on TD Ameritrade Network on August 29, 2019
Tom Essaye appeared in Mid-Day Movers by TD Ameritrade Network discussing equities, what’s driving the markets right now, earnings and more…Click here to watch the full interview.
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Tom Essaye Quoted in The Bulletin on July 22, 2019
Investors look ahead to earnings
“We will start to get results from some of the big multi-national industrials and tech firms, which should shed more light on the effects of the trade war…” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, wrote in a note to clients. Click here to read the full article.
Tom Essaye Interviewed with TD Ameritrade on July 22, 2019
Tom Essaye sat down with Jill Malandrino to discuss the macro picture of the market, earnings season, what the market is expecting, Federal rate cut and more. Watch the full interview below..
Fed Expectations and Earnings
What’s in Today’s Report:
- Weekly Market Preview (Fed Expectations and Earnings)
- Weekly Economic Cheat Sheet (July Flash PMIs this week).
Futures are slightly higher on positive U.S.-China trade headlines following an otherwise quiet weekend.
Tech firms will meet today with administration officials to discuss the Huawei tech ban, while multiple reports stated China will increase soybean purchases and a face to face meeting between Chinese & U.S. officials could occur soon.
Fed policy expectations continue to shift back to a 25 basis point rate cut next week as hope for a 50 basis point cut continues to recede.
Today there are no economic reports and no Fed speakers as we enter the “quiet period” ahead of next Wednesday’s rate decision. So, there’s not much on the calendar today that could cause volatility, although headlines from the tech company/administration meeting today on Huawei is something to watch, as any hints at relaxing of the ban will be a mild positive for stocks. Earnings are sparse today as well although I’ll be watching Whirlpool (WHR $3.80) results after the close for any insight into the state of the U.S. consumer.
Tom Essaye Quoted in Invezz on July 17, 2019
“Looking at this earnings season, the key question is: Will trade uncertainty cause businesses to pull back on spending and investment enough so that it begins to weigh on earnings?” Tom Essaye, founder of the Sevens Report, said in a note. Click here to read the full article.
Economic Breaker Panel: July Update
What’s in Today’s Report:
- Economic Breaker Panel – July Update
Futures are trading modestly higher this morning as investors digest the mixed set of corporate earnings releases so far this week after an otherwise quiet night of macro news.
Eurozone inflation was 1.3% vs. (E) 1.2% year/year in June, but the slightly firmer than expected print was not enough to alter the outlook for ECB policy (the euro is flat).
Today, there is one economic report to watch: Housing Starts (E: 1.260M) and one Fed official scheduled to speak: George (12:30 ET).
With news-flow considerably slower today than yesterday, investor focus will remain on earnings as the reporting season continues to pick up.
Notable releases today include: BAC ($0.70), PNC ($2.83), USB ($1.07), BK ($0.94) before the open, and NFLX ($0.56), IBM ($3.06), EBAY ($0.62), AA (-$0.34), KMI ($0.23) after the close.
Curve Steepening: Buy Banks?
What’s in Today’s Report:
- 10’s-2’s Showing Signs of Life – Good for the Banks?
S&P futures are indicating stocks will open at all-time highs today thanks to strong earnings and Fed optimism after President Trump mentioned rate cuts and QE yesterday.
AAPL beat on earnings and revenue in Q1 but also notably revised guidance solidly higher citing improvement in Chinese markets. The company’s shares are trading up roughly 6% in the pre-market.
Most overseas markets are closed for holidays today and the market’s main focus will be the Fed events this afternoon: FOMC Meeting Announcement (2:00 p.m. ET), Fed Chair Press Conference (2:30 p.m. ET).
There are a however a few important economic reports that could move markets this morning: ADP Employment Report (E: 180K), ISM Manufacturing Index (E: 55.0), and Construction Spending (E: 0.2%).
Bottom line, the market is looking for more dovish rhetoric out of the Fed today and if Powell delivers, another set of closing highs in U.S. stock indexes is likely.
Tom Essaye Interviewed with Fox Business on April 15, 2019
Sevens Report founder Tom Essaye says the market can still rally despite disappointing bank earnings. Watch the full clip here.
The Easiest Way to Explain This Market To Clients
What’s in Today’s Report:
- The Easiest Way To Explain This Market To Clients
- Technical Market Update (Volume Not Confirming The Rally)
- A More “Hawkish” Fed than we think?
Futures and global markets are moderately higher as global economic data beat expectations, furthering hopes of a global growth rebound.
March Chinese exports handily beat estimates, rising 14.2% vs. (E) 8.4% while EU Industrial Production wasn’t as bad as feared (-0.2% vs. (E ) -0.6%).
Focus turns to earnings this morning as all eyes will be on three big banks: JPM ($2.32), WFC ($1.08), PNC ($2.59). If they post solid numbers, then combined with the good Chinese economic data, we could see an extension of this rally.
Outside of earnings, we do get Import/Export Prices (E: 0.4%/0.3%) and Consumer Sentiment (E: 98.0). Plus, Powell speaks to House Democrats but no comments on policy are expected and none of those events should move markets.
New Earnings Risks
What’s in Today’s Report:
- Why the Stronger Dollar and Commodity Prices Matter to Stocks
- Housing Market Data Update
- More Evidence a Rate Cut Might Be Coming
S&P futures have turned negative in pre-market trading as bond yields continue to bleed lower with the benchmark 10-yr yield hitting fresh lows in the mid-2.30% range overnight.
Economically, Chinese Industrial Profits were down -14.0% YTD, falling from -1.9% in December.
The Reserve Bank of New Zealand was the latest central bank to turn decidedly dovish overnight citing concerns about the global economy while Brexit angst also persists amid new votes in Parliament today.
The list of catalysts in the Wall Street session is a short one today with only one economic report due out: International Trade (E: -$57.4B) and just one Fed speaker later in the evening: George (7:00 p.m. ET).
That will again leave the market primarily focused on the bond market and to a lesser degree the dollar. Recession fears are front and center right now with Fed funds futures pricing in more than 80% odds of a rate cut in the next 10 months as of this writing.
Bottom line, without a rebound in yields and at least a steady dollar (a pullback would be more favorable) then it will be very difficult for stocks to mount any sort of rally today.