“Earnings are heating up and they are generally coming in healthy and better than expected. But with the stimulus saga dragging on and the election…” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, wrote in a note. Click here to read the full article.
What’s in Today’s Report:
Stock futures are flat after wavering between gains and losses overnight as investors hold out hope for a last minute stimulus bill while COVID-19 cases continued to rise around the globe.
There were no notable economic releases overnight and no major data points are due to be released today.
Looking into today’s session the lack of economic data will leave investors interested in Fed chatter with several officials speaking over the course of the day: Brainard (8:50 a.m. ET), Mester (10:00 a.m. ET), Kaplan, Daly, & Kashkari (12:00 p.m. ET), Barkin (1 p.m. ET).
Earnings will also continue to be closely watched with multiple notable reports due to be released today: VZ ($1.22), WGO ($0.90), AN ($1.63), TSLA ($0.58), CMG ($3.44), CSX ($0.93), and DFS ($1.63).
While the aforementioned factors will continue to be monitored by investors today, stimulus remains by far the most important influence on markets right now and any progress towards a sizeable, market friendly deal that is actually passable in the near term could trigger a big rally in stocks. Conversely, if talks fall apart and the timeline for a deal is pushed back, we could see stocks begin a potentially steep pullback on the news.
Tom Essaye interviewed with Ben Lichtenstein from TD Ameritrade Network to discuss consumer-oriented earnings, treasury, stocks, and more…Click here to watch the full interview.
What’s in Today’s Report:
U.S. equity futures are churning lower this morning after a mostly quiet night of news as investors digest yesterday’s strong start to the month of August and continue to wait for details regarding the next stimulus package.
Economically, eurozone PPI rose 0.7% vs. (E) 0.5% in June helping support a modest bounce in the euro vs. the dollar this morning.
Today, there are two economic data points due to be released: Motor Vehicle Sales (14.0M) and Factory Orders (E: 5.2%) while no Fed officials are scheduled to speak today.
On the earnings front, there are a few notable reports today including: BP (-$0.99), BYND (-$0.01), ALL ($1.41), and PRU ($1.72) but none of those should materially move markets as investors will remain focused on the stimulus talks on Capitol Hill while the July labor market statistics, which begin to hit tomorrow, are also coming into focus.
What’s in Today’s Report:
Futures are lower following disappointing headlines on U.S. stimulus progress, combined with profit taking ahead of multiple important market catalysts coming today.
U.S. stimulus bill talks were said to be at an “impasse” late Wednesday, and that’s weighing on sentiment (although this drama is to be expected, as we cautioned last week, and a deal is still very much expected by mid- August).
Economically, German Q2 GDP missed estimates (-10.1% vs. (E) -9.4%), which is a reminder just how much damage was inflicted on the global economy in Q2.
As mentioned, one of the reasons futures are weaker this morning is book squaring ahead of several important economic and earnings events today.
First, the most important economic report of the day is Jobless Claims (E: 1.38M). We address this more in the Report, but there are growing signs the U.S. economic recovery is pausing or stalling, and that’s not priced into stocks above 3200 in the S&P 500. If we see another notable increase in weekly claims (say through 1.5M) that will amplify fears the recovery is stalling and likely weigh on stocks.
Then, on the earnings front, we get four of the most important stocks in the market announcing results after the close: AMZN (E: $1.75), AAPL (E: $1.99), FB (E: $1.44), GOOGL (E: $8.43). The earnings results will be “fine” but these stocks have had huge runs, and if they disappoint vs. elevated expectations, just due to these stocks weights in the S&P 500, it could pressure markets after hours.
Finally, today we will get the initial look at Q2 GDP, and it will be historic as it’s estimated to be -35% seasonally adjusted annual rate (remember GDP is usually around 2% saar). I never in my life thought we’d see such a number, and I hope we don’t ever see it again. But, today history will be made as the worst GDP print ever.
What’s in Today’s Report:
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.
What’s in Today’s Report:
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).
What’s in Today’s Report:
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.
“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.
What’s in Today’s Report:
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).
