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Why Does It Matter When the Fed Tapers QE?

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What’s in Today’s Report:

  • Why Does It Matter When the Fed Tapers QE?
  • A Strong Rebound in Consumer Confidence
  • Chart: Copper Hits Near-Decade Highs

U.S. stock futures are little changed this morning as a sense of “Fed paralysis” continues to grip the markets ahead of today’s FOMC announcement.

Investors are also awaiting details of Biden’s “American Families” plan and earnings from several big tech companies.

This morning, investors will be watching one economic release: International Trade in Goods (E: -$87.5B) but the report should not materially move markets given focus will largely be on the afternoon Fed events: FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET).

Although the Fed will be the main driver of markets today, there are several notable companies reporting earnings that could impact individual stock and sector trade including BA (-$1.17), GD ($2.31), and YUM ($0.85) before the open and heavyweights AAPL ($0.99), FB ($2.36), QCOM ($1.67), and F ($0.16) after the closing bell.

Tom Essaye Quoted in Forbes on June 11, 2020

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“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality,” Tom Essaye, founder of the Sevens Report, told CNBC. Click here to read the full article.

Tom Essaye Quoted in CNBC on June 11, 2020

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Tom Essaye, founder of the Sevens Report, on what triggered the sell-off

“Fed chair Powell yesterday really reminded investors that there’s a huge, huge gap between the economic reality and the market reality. Just that reminder combined with a lot of the second wave…” Essaye told CNBC. —Li 

Click here to read the full article.

Seven Ifs Updated

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What’s in Today’s Report:

  • Seven “Ifs” That Will Move This Market Updated (Not Much Progress)
  • Weekly Market Preview (All About China)
  • Weekly Economic Cheat Sheet (Important Numbers This Week, Starting Today)

Futures are slightly higher following a generally busy weekend of economic, geo-political and Fed related news.

Economic data was mixed as CN New Yuan Loans slightly missed estimates (885 bln vs. (E) 950bln), as did German IP (-0.8% vs. (E) 0.5%) while German exports beat estimates.

On trade, the Trump/Xi summit appears to have been delayed till April, although a trade deal is still expected so this delay isn’t a negative for markets, yet.

Fed Chair Powell was on 60 Minutes Sunday night but didn’t say anything new so it’s having no impact on markets.

Today markets will be focused on the Retail Sales (E: 0.0%) report, in part because Powell specifically cited it as something he’d be watching in the 60 Minutes interview.  The key to this number, as always, is the “Control” group which is retail sales less gas, autos and building materials, and the market estimate is 0.7%.  A beat of that estimate will provide a boost of confidence for the economy, while a miss will exacerbate fears of a potential slowdown.

Sevens Report’s Tom Essaye quoted in Axios on January 30, 2019

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Sevens Report’s Tom Essaye quoted in Axios on January 30, 2019. Read the full article here.