“All the data is horrific. But it’s getting less bad than it was say a couple weeks ago and that’s especially true with…” said Sevens Report Research founder Tom Essaye on Yahoo Finance’s The First Trade. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher following a quiet night of news.
Economic data was disappointing, again, as British Retail Sales dropped –5.1% vs. (E) -3.5%, while German Ifo Business Expectations declined to 69.4 vs. (E) 75.0. But, once again markets are looking past current data and instead focusing on hope that the worst is behind us.
There was no notable coronavirus news overnight.
Today focus will be on economic data, specifically Consumer Sentiment (E: 68.1) as it offers us a more “real-time” gauge of economic activity. Durable Goods (E: -11.4%) will also be closely watched, although it’s a March report so it won’t reflect the depths of the slowdown in business spending.
Good Morning,
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are slightly lower as markets digest yesterday’s rally following a mostly quiet night of news.
News on COVID-19 was mixed as China did another “diagnostic change” and the number of COVID 19 cases fell, while in South Korea the number of infections rose. But, markets still view the transmission rate of the disease as peaking (and this assumption is what’s driving markets higher – and it’s also the greatest source of near term risk for stocks if the situation changes).
Economic data was sparse but German GfK Consumer Climate and British Retail Sales both beat estimates, although neither is moving markets.
Today there are two notable economic reports, Jobless Claims (E: 211K) and Philly Fed (E: 12.0), and as remains the case, the stronger the data, the better (markets will especially be looking for confirmation of the strong Empire report from Philly Fed). There is also one Fed speaker, Barkin at 1:20 p.m. ET, but he shouldn’t move markets.
Please email info@sevensreport.com if you have any trouble downloading today’s Report.
What’s in Today’s Report:
It is another slow morning in the markets as stock futures are tracking the modest gains of overseas equities amid good economic data but underwhelming earnings news.
FDX shares are down 7% in pre-market trading after the company missed on earnings and lowered 2020 guidance.
The German Ifo Survey showed improving economic sentiment in Europe’s largest economy with both Current Conditions and Business Expectations figures topping estimates which is helping EU stocks edge higher this morning.
Looking into today’s session, it is lining up to be another quiet day as there are no economic reports and only one Fed official is scheduled to speak: Evans (12:40 p.m. ET).
What’s in Today’s Report:
S&P futures are down roughly 10 points as the recent melt-up rally continues to be digested ahead of key inflation data in the U.S. while trade headlines were negative overnight.
Trade sentiment deteriorated over the last 12 hours as expectations of a G20 deal are fading while protests in Hong Kong over an extradition bill pressured the Hang Seng to fall nearly 2%.
Economically, Chinese CPI and PPI met estimates overnight while Japanese Machine Orders rose 5.2% vs. (E) 0.5% helping the Nikkei outperform with a loss of just 0.35%.
Today’s focus will be on inflation data due out ahead of the bell: CPI (E: 0.1%). There are no other notable reports due to be released and no Fed officials are scheduled to speak today.
The digestive tone will likely continue as the blistering rally of the last week was overdone however the “pain trade” remains higher and if the CPI print is soft, we could see another run back to and potentially through 2900 in the S&P today.
What’s in Today’s Report:
Futures are marginally weaker as the U.S. increased tariffs on Chinese imports, as expected.
Positively, the trade talks will continue today, and the consensus market outlook remains that a deal does get done, likely in the next few weeks.
Away from trade, economic data was solid. Japanese Household Spending, British GDP and UK Industrial Production all beat estimates.
Today most of us will spend the day watching for any trade related headlines, and there are likely to be plenty. But, barring a total breakdown in negotiations, trade shouldn’t be too big of a negative on markets today.
Away from trade, we also get the most important economic data point of the week: CPI (E: 0.4%). PPI was more firm than it seemed, and if CPI is also firm then that will reduce the possibility of a preventative Fed rate cut, which will be another headwind on stocks. Finally, there are multiple Fed speakers today: Brainard (8:30 a.m. ET), Bostic (9:05 a.m. ET), Williams (10:00 a.m. ET) but none should move markets.
The Dow Rose 39 Points After a Late Comeback
Economic data clearly remain soft on an absolute level, wrote Tom Essaye of Sevens Report on Wednesday. “There is now a laundry list of economic indicators that are flashing their worst readings since 2016…” Click here to read the full article.
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night as markets wait for this morning’s jobs report.
President Trump said he hoped the U.S./China trade deal would be done in the next four weeks, which again generally meets markets expectations.
Economic data was sparse but German Industrial Production rose 0.7% vs. (E) 0.5%, somewhat offsetting Thursday’s disappointing German Manufacturers’ Orders report.
Today the focus will be on the jobs report and the expectations are as follows: Jobs Adds 170K, UE Rate 3.8%, Wages 3.4% yoy.
The best outcome for stocks today would be a jobs number in the mid 100k range (not too strong, but not too weak), positive revisions to the February data and a wage number below 3.5% yoy. That outcome likely can spark a further rally. Conversely, any extremes on the job adds (very good or very bad) along with another hot wage number may lead to profit taking in stocks on fears of slowing growth or a more hawkish Fed.
What’s in Today’s Report:
Futures are solidly higher this morning, tracking gains in international markets led by Chinese shares thanks to strong economic data and more progress on trade.
Several news outlets reported overnight that up to 90% of a trade deal is done as China’s vice premier Liu He travels to D.C. to continue mid-high level trade talks today.
Economically, the Caixin Chinese Service PMI beat expectations jumping to 54.4 in March, a 14 month high, while the EU Service PMI rose to 53.3 vs. (E) 52.7. Both releases helped ease concerns about recently underwhelming economic data.
Looking into today’s session, there are a few catalysts to watch for. First, the ADP Employment Report (E: 165K) will be releases ahead of the open, kicking off “jobs week” in the U.S. and then the ISM Non-Manufacturing Index (E: 58.0) will hit shortly after the bell. Investors will look for both of these numbers to track the encouraging releases overseas last night.
Additionally, there is one Fed speaker before the open: Bostic (8:30 a.m. ET) and Kashkari will speak after the close (5:00 p.m. ET). Lastly, with U.S.-China trade optimism driving a good portion of the pre-market gains, any news out of Washington will have the potential to materially move markets today.
What’s in Today’s Report:
Futures are flat and international shares were mildly higher overnight as yesterday’s sizeable rally in the U.S. was digested amid a slight pullback in bond yields.
The Reserve Bank of Australia was the latest central bank to note downside risks in the global economy overnight.
Economically, Eurozone PPI was a mild miss: 0.1% vs. (E) 0.2% in February but inflation has been subdued and the report does not change the outlook for ECB policy.
Today, Motor Vehicle Sales (E: 16.8M) will begin to come in over the course of the morning while there is one notable economic report ahead of the open: Durable Goods Orders (E: -1.8%). There are no Fed speakers today.
With a lack of material catalysts between now and Friday’s jobs report, macro focus will be on U.S. – China trade negotiations and the bond market. If Treasury yields revisit last week’s lows, stocks will have a hard time holding the strong gains of the last few sessions, so watch bonds closely.
