Posts

What the Fed Decision Means for Markets

/in , /by

What’s in Today’s Report:

  • What the Fed Decision Means for Markets
  • EIA Analysis and Oil Market Update

Futures are moderately higher mostly on momentum as yesterday’s FOMC decision reinforced market expectations that rate hikes are over, while markets anticipate a dovish hike from the ECB later this morning.

There was no market moving economic data overnight.

Today is a busy day on both the economics and earnings front.  The key event is the ECB Rate Decision (E: 25 bps hike) and markets will want to see if Lagarde implies the next rate hike (likely in September) will be the last one (if so, that’ll be a positive for markets).

Economically, there are several important reports today including, in order of importance: Jobless Claims (E: 235K), Durable Goods (E: 0.5%), Advanced Q2 GDP (E: 1.5% y/y) and Pending Home Sales (E: 0.3%).  As has been the case for much of 2023, the more “Goldilocks” the data, the better for stocks (especially cyclicals).

Finally, on the earnings front, there are numerous notable reports today including: RCL ($1.58), MCD ($2.77), LUV ($1.08), MA ($2.84), HON ($2.20), F ($0.51) and INTC (-$0.04) and investors will remain focused on margins and guidance (they want to see positive commentary on both).

Tom Essaye Quoted in Yahoo Finance on April 19th, 2023

/in , /by

Why a smattering of notable cyclical stocks are hitting 52-week highs

Sevens Report Research Founder Tom Essaye agrees with the Fed pause narrative fueling stocks but thinks there are also other elements in play. “Market pros expect stocks to drop,” Essaye says. “That means the ‘pain trade’ is higher in the short term, as under allocated advisors and investors begrudgingly chase stocks.” Click here to read the full article.

Are Junk Bonds Signaling Recession?

/in , /by

What’s in Today’s Report:

  • Are Junk Bonds Signaling Recession?
  • What Does Terminal Fed Funds Mean in Plain English?

Futures are modestly higher on solid tech earnings and after another global central bank ended rate hikes.

Nvidia (NVDA) earnings beat estimates and the stock us up 8% pre-market, and that’s helping general tech sentiment.

South Korea’s central bank ended its rate hike campaign and while that’s not a major central bank, it’s another reminder the global hiking cycle is ending.

Focus today will remain on economic data and Fed speak and that includes Jobless Claims (E: 200K) and Revised Q4 GDP (E: 2.9%). Fed speakers include Bostic (10:50 a.m. ET) and Daly (2:00 p.m. ET) and as has been the case for two weeks, any data or comments that increase rate hike expectations will pressure stocks (and vice-versa).