Posts

Current Market Glossary (For Clients & Prospects)

/in , /by

What’s in Today’s Report:

  • Current Market Glossary (For Clients & Prospects)

Futures are slightly lower following a night of disappointing tech earnings.

NFLX, TSLA and TSM all posted disappointing earnings results (stocks down 3% – 6% pre-market) and that’s weighing on Nasdaq and S&P 500 futures.

There was no notable economic data overnight.

Today will be another busy day of data and earnings results.  On the economic front, the two key reports are Weekly Jobless Claims (E: 250k) and Philly Fed (E: -10.0), and as you can guess (and especially at these stretched valuations) markets will want to see more Goldilocks data (so stable claims and Philly and falling prices).  We also get Existing Home Sales (E: 4.23M) but, barring a big miss, that shouldn’t move markets.

Turning to earnings, focus today is on industrials and consumer/healthcare names, and some important results to watch include:  AAL ($1.58), TSM ($1.07), JNJ ($2.61), PM ($1.48), COF ($3.31), CSX ($0.49), and PPG ($2.14).

Market Multiple Table Chart (July Update)

/in , /by

What’s in Today’s Report:

  • Market Multiple Table Chart (July Update)
  • Why More Goldilocks Data Sent Stocks Higher Again Tuesday

Futures are little changed ahead of a busy day of earnings and despite more encouraging news on global disinflation.

UK CPI rose less than expected, gaining 0.1% vs. (E) 0.4% m/m and 7.9% vs. (E) 8.2% y/y, providing bullish investors more evidence that inflation is declining globally, although that good news was partially offset by a very slightly higher final look at EU HICP (up 5.5% y/y vs. 5.4%).

Today focus will turn to earnings and the key reports to watch are: TSLA ($ 0.82), NFLX ($2.83) and GS ($3.25), as those results will help set the tone for the start of earnings season (results from companies up to today have been fine, although it’s very, very early).    Other notable earnings include:  ASML ($4.97), USB ($1.13), UAL ($3.99), and IBM ($2.00).

Economically, the only notable number today is Housing Starts (E: 1.48M) but barring a shocking miss, that shouldn’t move the broader markets.

What Pushes Stocks Higher from Here?

/in , /by

What’s in Today’s Report:

  • What Pushes Stocks Higher from Here?
  • Weekly Market Preview:  Earnings Take Center Stage
  • Weekly Economic Cheat Sheet:  Growth Data in Focus this Week

Futures are slightly lower following mixed Chinese economic data and a potential further escalation of the Russia/Ukraine war.

Chinese economic data was mixed as GDP and Retail Sales both missed estimates, while Industrial Production beat, and the data will keep markets  wanting more stimulus.

Possibility of further escalation of the Russia/Ukraine war increased after Ukraine claimed responsibility for the destruction of a bridge linking Crimea and Russia.

Today focus will be on the first data point for July, the Empire Manufacturing Index (E: -4.3).  Markets will want to see this number be stronger than expectations and ideally turn positive, furthering the “Golidlocks” market narrative of falling inflation but stable growth.

What the CPI Report Means for Markets

/in , /by

What’s in Today’s Report:

  • What the CPI Report Means for Markets
  • EIA and Oil Market Analysis

It’s “green on the screen” as global indices and U.S. futures extend yesterday’s CPI driven rally.

Economically, UK Industrial Production (IP) was better than feared (down –1.2% vs. (E) -1.5%) while EU IP slightly missed estimates (0.2% vs. (E) 0.5%).

Earnings season officially begins today and the first reports are solid, as PEP and DAL both beat earnings estimates.

Today focus will be on economic data, specifically Jobless Claims (E: 245K) and PPI (E: 0.2% m/m, 0.4% y/y, Core PPI E: 0.2% m/m, 2.8% y/y).  If jobless claims are mostly stable and PPI falls more than expected, markets should extend yesterday’s “Immaculate Disinflation” driven rally. Finally, there is one Fed speaker today, Waller (6:45 p.m. ET), but markets are ignoring hawkish rhetoric right now so he shouldn’t move markets.

Explaining Current Market Risks to Clients (And Prospects)

/in , /by

What’s in Today’s Report:

  • How to Explain Risks in This Market to Clients/Prospects
  • Mannheim Used Vehicle Value Index Takeaways (Chart)

Futures are slightly higher while most international markets rallied overnight thanks to news of more Chinese government support for the property sector and steady EU inflation data.

German CPI met estimates of 0.3% m/m and 6.4% y/y in June, both unchanged from May, while the ZEW Survey was inline with expectations on the headline but Economic Sentiment deteriorated to -14.7 vs. (E) -10.2.

Domestically, the NFIB Small Business Optimism Index came in at 91.0 vs. (E) 89.8 in June which is helping bolster investor sentiment in the premarket.

There are no additional economic reports today and just one Fed speaker on the calendar: Bullard (9:00 a.m. ET) which will leave investors looking ahead to tomorrow’s critical CPI report.

Jobs Day

/in , /by

What’s in Today’s Report:

  • How the Two-Year Yield Caused Yesterday’s Drop in Stocks
  • EIA Analysis and Oil Market Update

Futures are slightly lower following a mostly quiet night of news as investors wait for this morning’s jobs report.

Economic data underwhelmed as Japanese Household Spending (-1.1% vs. (E) 0.5%) and German Industrial Production (-0.2% vs. (E) -0.1%) both missed expectations.

Taiwan exports also fell more than expected, down 23.4%, and that’s adding to general anxiety about future global growth.

Today the only major event is the June jobs report and expectations are as follows:  213K job adds, 3.7% UE Rate, 0.3% wage increase m/m and 4.2% y/y.  As we saw from yesterday’s ADP report, a “Too Hot” number will spike yields and further pressure stocks, as the rise in yields is now getting high enough to be a headwind on the market.  Conversely, a “Too Cold” number will increase stagflation worries.

A job adds number in the 100k range coupled with an increase in the unemployment rate and a drop in wages remains the best outcome for stocks, and if we get that number don’t be surprised if the S&P 500 recoups all of yesterday’s losses.

ISM Data Points To Rising Odds of a Hard Landing

/in , /by

What’s in Today’s Report:

  • Trading Color – Quarterly Rebalancing Helps Improve Breadth
  • ISM Manufacturing Index Takeaways – Not a Good Report
  • If the Yield Curve Is Right, The U.S. Economy Will Roll Over Hard

U.S. equity futures are tracking global markets lower this morning after more disappointing PMI data overnight.

Economically, China’s June Composite PMI dropped to 52.5 from 55.6 in May with the Services Index notably missing estimates at 53.9 vs. (E) 55.9. Meanwhile, the Eurozone Composite PMI fell into contraction at 49.9 vs. (E) 50.3.

Looking into today’s session, there are two economic reports to watch: Motor Vehicle Sales (E: 15.3 million) and Factory Orders (E: 0.9%), although barring any huge surprises, neither should materially move markets ahead of the Service PMI data and June jobs report due later in the week.

From there, focus will turn to the release of the June FOMC Meeting Minutes at 2:00 p.m. ET as markets look for further clarity on the Fed’s commitment to raising rates further in H2’23 (a hawkish interpretation would weight on risk assets).

Finally, there is one Fed speaker: Williams but not until the closing bell at 4:00 p.m. ET so any impact by his comments will likely not be realized until tomorrow.

Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar on June 29th, 2023

/in , /by

Oil futures finish higher, contributing to the month’s gain

Oil stabilized at support near the 2023 lows following Wednesday’s weekly Energy Information Administration report, which showed a “massive draw” in commercial crude-oil stockpiles, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Tom Essaye Quote in Barron’s on June 30th, 2023

/in , /by

U.S. Stock Futures Rise Ahead of Key PCE Inflation Data

Futures are moderately higher mostly on momentum and end of quarter/half positioning, as economic data overnight was mixed but not bad enough to interrupt the rally, said Tom Essaye, founder at Sevens Report Research. Click here to read the full article.

Why Economic Data Will Decide if the Rally Continues in 2H ’23

/in , /by

What’s in Today’s Report:

  • Why Economic Data Will Decide if the Rally Continues in 2H ‘23
  • Weekly Market Preview:  Does Economic Data This Week Reinforce “No Landing” Expectations?
  • Weekly Economic Cheat Sheet:  Jobs Report Friday, ISM PMIs Monday and Thursday.

Futures are flat to start the second half of 2023 following a quiet weekend of news.

Economic data was mixed overnight as the EU Manufacturing PMI slightly missed estimates (43.4 vs. (E) 43.6) while the UK reading slightly beat expectations (46.5 vs. (E) 46.2), but neither number is moving markets.

Saudi Arabia and Russia made separate announcements about further reducing oil supply in the coming months, although they aren’t causing a material rally.

Today focus will be on the ISM Manufacturing PMI (E: 47.2) and at this point, and with yields this high, markets need to see solid data and that means the ISM Manufacturing PMI moving closer towards 50 and beating expectations.

As a reminder, the stock market will close at 1:00 p.m. today ahead of the July 4th holiday.

 

Sevens Report Quarterly Letter Delivered Today

Our Q2 ’23 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

  • Save time (an average of 4-6 hours per quarterly letter)
  • Enjoy the holiday shortened week and know your client quarterly letter is already done, or mostly done!

You can view our Q1 ’23 Quarterly Letter here

To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.