“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.
What’s in Today’s Report:
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today where China will ask for the December tariff increases to be formally scrapped and the 9/1 tariff increases to be rescinded.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.
Major indexes are mixed today after major companies like Microsoft, Twitter, and Tesla reported earnings. Founder of The Sevens Report Tom Essaye joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss. Click here to watch the full video.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question” – Tom Essaye, The Sevens Report. Click here to read the full article.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question,” said Tom Essaye, founder of stock market analysis firm, Sevens Report Research, in a note to clients. Click here to read the full article.
What’s in Today’s Report:
Stock futures declined overnight after China said it would take countermeasures to the passage of a pro-Hong Kong bill by the U.S. House, further complicating the U.S.-China trade relationship while hopes for a Brexit deal faded.
There were no market-moving economic reports overnight.
Today, there is one key economic report to watch: Retail Sales (E: 0.3%) and two second tiered reports due to be released: Business Inventories (0.3%) and the Housing Market Index (E: 68). There are also two Fed officials scheduled to speak: Evans (9:00 a.m. ET) and Brainard (3:00 p.m. ET) that could potentially move markets.
Investors will also be looking for any further developments on the latest escalation in tensions between the U.S. and China as the trade war remains a major influence on stocks and broader risk assets.
Shifting from macro to micro, the start of earnings season will continue today with BAC ($0.68), PNC ($2.80), ALLY ($0.98), USB ($1.11), and BK ($0.99) all reporting ahead of the bell while NFLX ($1.05), IBM ($2.64) and CSX ($1.01) will release results after the close.
What’s in Today’s Report:
Futures are marginally higher after China cut interest rates, although the cut was less than expected.
China cut its Loan Prime Rate (LPR) by five basis points. The rate cut was expected but it was supposed to be a 10-15 basis point cut, so the action isn’t as strong as hoped for and Chinese economic growth will remain a concern.
Economic data was sparse overnight as Japanese CPI met expectations at 0.5% yoy.
Today there aren’t any economic reports but there are several Fed speakers, including Bullard who already spoke and was dovish (which isn’t a surprise, he wanted a 50 bps cut this week). The most important speaker today is Williams (8:15 a.m. ET) as he’s considered part of Fed leadership, and if he advocates for more cuts that’ll be a dovish tailwind on stocks. Other speakers today include Rosengren (11:20 a.m. ET) and Kaplan (1:00 p.m. ET).
On U.S./China trade, the staffer meeting in preparation for the October meeting will continue, and absent any “real” news today any chatter that’s positive on U.S./China trade and/or dovish will help stocks rally.
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.
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 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..
