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Special Technical Report Coming Monday

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What’s in Today’s Report:

  • Special Technical Report Coming Monday
  • Why Did the VIX Just Hit 52 Week Lows?
  • EIA Analysis and Oil Market Update
  • Two Notable Observations from a Quiet Trading Day

Futures are moderately weaker following a disappointing night of earnings.

TSLA, NOK, FFIV and TSMC all missed earnings and provided cautious commentary or guidance, and that’s increasing concerns about an economic slowdown.

Today there are numerous potential catalysts including important economic reports, lots of Fed speak and more earnings reports.

Starting with the data, the key report today is Philly Fed (E: -19.4) and markets will want to see if it confirms the rebound we saw in Empire (if it does, expect some stock weakness as Fed expectations become slightly more hawkish).  We also get Jobless Claims (E: 242K) and any move closer to 300k will be welcomed as it signals a slightly more normal labor market.

Turning to the Fed, there are multiple speakers today including Waller (12:00 p.m. ET), Mester (12:20 p.m. ET), Logan (3:00 p.m. ET) and Bostic (5:00 p.m. ET) and it will be notable to see if they all push back on the rate cut expectations in the markets.

Finally, on earnings, results lately have been underwhelming so these reports are becoming more important.  Earnings we’re watching today include: T ($0.58), TSM ($1.21), AXP ($2.63), UNP ($2.57), PPG ($1.55), CSX ($0.43), STX ($0.18).

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on April 17th, 2023

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Oil futures finish lower as traders eye prospects for energy demand

Oil futures finished with a loss on Monday, with traders weighing the prospects for energy demand. A “shockingly strong” Empire State Manufacturing Index reading Monday helped to live the odds of an interest-rate hike by the Federal Reserve in May, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Why Won’t Stocks Drop?

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What’s in Today’s Report:

  • Why Won’t Stocks Drop? It’s Partially Sentiment
  • Empire State Manufacturing Index Takeaways
  • Chart – How Oil Prices Are Influencing the S&P 500 Right Now

Stock futures are higher this morning as Chinese economic data was mostly better than expected while investors await more big bank earnings today.

Economically, Chinese Retail Sales jumped 10.6% y/y vs. (E) 7.0% in March which helped Q1 GDP to rise 4.5% y/y vs. (E) 3.9%. Other metrics including Fixed Asset Investment and Industrial Production were less encouraging, but the strong consumer data was well received by investors overnight.

Meanwhile U.K. wage growth rose 5.9% vs. (E) 5.1% in March which adds some pressure to the BoE to remain aggressive as there is clearly more work to do to get inflation under control.

Looking into today’s session, focus will be on earnings early with BAC ($0.79), GS ($8.14), JNJ ($2.51), and BK ($1.09) reporting quarterly results before the open while NFLX ($2.81) and UAL (-$0.73) report after the close.

After the open, investors will be watching for the only notable economic release today: Housing Starts and Permits (E: 1.400 million, 1.431 million) before there is a 52-Week Treasury Bill auction at 11:30 a.m. ET which may offer some fresh insight into market expectations for Fed policy over the next year.

Finally, the Fed’s Bowman speaks at 1:00 p.m. ET and investors will be looking any further clues about May rate hike plans and longer term policy outlook.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on April 13th, 2023

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U.S. oil futures finish lower, a day after marking their highest finish year to date

“The expectation that consumer demand will firm markedly in China as the economy continues to recover from the impact of strict economic lockdowns is another supporting factor for oil markets this week,” said Richey. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on April 13th, 2023

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Oil prices settle lower a day after U.S. benchmark breaks out to nearly 5-month high

What was interesting about Wednesday’s rally was that the U.S. petroleum inventory data, which were largely bearish, were “ignored and traders instead bid up the market on the easing headline CPI figure. To me, that suggests the market has largely priced in the OPEC+ production cut planned for next month and is again focused on the demand outlook, as the cooling price pressures bolstered hopes a hard economic landing can be avoided,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Why Stocks Rallied on Thursday

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What’s in Today’s Report:

  • Why Stocks Rallied on Thursday
  • Policy Spread Update (Rate Cuts Imminent?)

Futures are slightly lower on digestion of Thursday’s rally and as markets await bank earnings this morning.

Fed balance sheet news overnight was mixed, as total usage of the Discount Window and BTFP dropped to $139 bln from $149 bln, but that’s still very elevated and it underscores there’s still stress in the regional banks.

Focus today will be on economic data and earnings, and the key here remains stability in both sets of reports (so no major disappointments).  Important economic reports today include, in order of importance, Retail Sales (E: -0.4%), Industrial Production (E: 0.3%) and Consumer Sentiment (E: 62.7).

Earnings season starts today and key reports we’re watching include: JPM ($3.41), C ($1.66), WFC ($1.15), PNC ($3.60), BLK ($7.73), UNH ($6.24).

Finally, there’s one Fed speaker, Waller at 8:45 a.m. ET but he shouldn’t move markets (the Fed message is very consistent right now).

Analysts at Sevens Report Quoted in MarketWatch on April 6th, 2023

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Oil tallies a third straight weekly gain after OPEC+ production cuts

“Bottom line, the fundamental dynamics of the oil market changed this week with OPEC+’s announced production cut, which they said was geared towards regaining control of the markets and spooking speculators out of the market,” said analysts at Sevens Report Research, in a Thursday note. Click here to read the full article.

Tom Essaye Quoted in Forbes on April 3rd, 2023

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Surprise Oil Production Cuts Risk ‘Exacerbating’ Inflation Pressures And Harsher Fed Policy, Experts Warn

The surprise announcement also suggests OPEC+ may be getting more cautious about its outlook for global oil demand given the elevated threat of a potentially deep recession looming, says Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Three Catalysts in Focus

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What’s in Today’s Report:

  • What Can Break the S&P 500 Out of the Current Trading Range? Three Candidates
  • ISM Manufacturing Index Takeaways (Fairly “Goldilocks”)
  • OPEC+, Oil Prices, Inflation, the Economy, and Fed Policy – They’re All Tied Together

U.S. stock futures are tracking European markets higher this morning thanks to a cooler-than-expected inflation print in Europe while news flow was otherwise mostly quiet overnight.

Economically, Eurozone PPI for February came in at -0.5% vs. (E) -0.3% m/m but a still lofty 13.2% vs. (E) 13.5% y/y. Despite the still elevated annual figure, the lower than expected print is bolstering risk assets this morning.

Today, there are three economic reports to watch in the U.S. including: Motor Vehicle Sales (E: 14.9 million), Factory Orders (E: -0.4%), and JOLTS (E: 10.4 million). Investors will want to see more evidence of slowing growth and a weakening labor market to reinforce hopes for both a less-hawkish Fed and soft landing in order for the recent stock market resilience to continue.

Finally, there is one Fed speaker to watch late in the day: Mester (6:45 p.m. ET).

Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch on March 23rd, 2023

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Oil futures settle lower, with U.S. prices back below $70 a barrel

“The banks are the main driver of oil, and really all risk assets today, as fading confidence in the financial system is reigniting fears that another crisis may be looming after we saw some of the biggest bank failures since 2008 in early March,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.