“The lack of a concrete timeline or any real details about plans to reopen the Chinese economy and move away from the still very strict and economically crippling restrictions weighed on the energy market into the afternoon,” wrote analysts at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are lower on underwhelming earnings and further digestions of Powell’s hawkish press conference.
Earnings results have turned more negative this week and that included last night as ATUS and CF both posted disappointing results (among others).
Today’s focus will be on the Bank of England Rate Decision (E: 75 bps hike) and economic data, as we get Jobless Claims (E: 222K), Unit Labor Costs (E: 4.0%) and the ISM Services Index (E: 55.4). Especially in light of Powell’s comments, markets will want to see data that shows resilient economic activity and falling inflation/deteriorating labor markets.
On the earnings front, the season largely wraps up at the end of the week but there are still some important reports to watch today including: COP ($3.41), RCL ($0.23), MAR ($1.69), PYPL ($0.96) and SBUX ($0.73).
What’s in Today’s Report:
U.S. futures and global stocks are rallying today amid reports that China is forming a “reopening committee” as part of a new push to ease Covid restrictions (however China’s foreign ministry has denied the rumors).
The RBA raised rates by 25 bp overnight, meeting estimates while the U.K.’s Manufacturing PMI was slightly better than feared at 46.2 vs. (E) 45.8.
Today, the focus will be on economic data early with the ISM Manufacturing Index (E: 50.0) and JOLTS (E: 9.875M) both due out shortly after the opening bell. But market reactions to the data are likely to be limited as the November FOMC meeting gets underway.
Earnings will remain in focus today with UBER (-$0.17), PFE ($1.47), BP ($1.94), and SYY ($0.99) reporting ahead of the bell, while AMD ($0.55) and ABNB ($1.46) will release results after the bell.
Bottom line, the combination of mostly favorable market news flow this morning, the calendar, and trader positioning into the Fed are all contributing to this morning’s pre-market gains, however, “Fed paralysis” is likely to set in today and into tomorrow’s morning session as investors await the latest Fed decision.
The Sevens Report Research analysts said oil’s new trading range spans “between support in the upper $70s and resistance in the low $90s, as traders assess the outlook for demand amid growing recession concerns but still-tight global supply dynamics.” Click here to read the full article.
“The Biden administration introduced an ‘SPR put’ to the oil market this week when they announced purchasing crude to replenish reserves when prices dip towards $70 a barrel,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower following a night of mixed earnings results and yet another firm inflation report.
TSLA missed on revenue and production targets and the stock fell –5% after hours, although overall earnings reports were more mixed than negative overnight.
German PPI was the latest global inflation indicator to run hotter than estimates (2.3% vs. (E) 1.5%) reinforcing that global inflation is proving “sticky.”
Today’s focus will be on economic data and the key reports are (in order of importance): Philly Fed (-5.0), Jobless Claims (E: 235K), and Existing Home Sales (E: 4.695M). If we can see a moderation in the data (especially in the price indices in Philly Fed) then stocks can rally. We also get numerous Fed speakers including: Harker (12:00 p.m. ET), Jefferson (1:30 p.m. ET), Cook (1:45 p.m. ET), and Bowman (2:05 p.m. ET) but none of them should move markets.
Finally, earnings season rolls on although the critically important results really increase next week. Some reports we’re watching today include: AAL ($0.54), SNAP ($0.00), and WHR ($5.59).
“The backdrop of sticky high inflation resulting in increasingly more hawkish Fed policy expectations for the foreseeable future and the subsequent rise in recession fears will likely keep a lid on WTI in the low to mid $90s,” analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.
“Oil has given back roughly half of the October gains this week thanks to the negative shift in policy and economic outlooks denting demand expectations,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
“With many analysts and economists now forecasting a recession as their base case outlook for 2023, demand estimates for everything from energy products to industrial metals are taking a hit,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower as markets digest the implications of Friday’s strong jobs report following a mostly quiet weekend.
Friday’s jobs report won’t make the Fed any more hawkish, but it’ll keep stocks facing a dual headwind of aggressive Fed and earnings pressure, and that’s weighing on futures.
There were no notable economic reports overnight.
Today is Columbus Day so there are no economic reports while the banks and bond market will be closed, likely leading to slow trading in stocks. There is one Fed speaker, Evans (9:00 a.m. ET), but he shouldn’t move markets (at this point it’s well-known what the Fed plans to do).