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FOMC Preview: Wildcard to Watch

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What’s in Today’s Report:

  • FOMC Preview: What’s Expected, Hawkish Scenario, Dovish Scenario
  • Fed Meeting Wildcard to Watch: Dovish Dissents

U.S. equity futures are tracking European shares higher this morning amid continued optimism surrounding the U.S.-EU trade deal and resilient earnings ahead of the Fed decision.

There were no noteworthy economic reports overnight which will leave focus on earnings and U.S. economic data today as the July Fed meeting gets underway in Washington.

Today’s economic calendar is a fairly busy one with several potential market-moving reports due to be released including: Consumer Confidence (E: 95.8), JOLTS (E: 7.4 million), Case-Shiller Home Price Index (E: 2.9%), and International Trade in Goods (E: $-99.0B).

Looking at earnings, the Q2 reporting season continues with notable companies releasing results today including: UNH ($4.84), SOFI ($0.06), BA ($-1.54), PG ($1.43), V ($2.86), MRK ($2.01), SBUX ($0.64).

Bottom line, investors will continue to look for resilient, yet not “too hot” economic data trends and upbeat earnings and guidance in order for stocks to hold yesterday’s record highs, however a familiar sense of “Fed Paralysis” is likely to grip markets ahead of tomorrow’s critical Fed decision.

 

Jobs Report Preview (Will It Reinforce the No Landing Expectation?)

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What’s in Today’s Report:

  • Jobs Report Preview (Will It Reinforce the No Landing Expectation?)
  • FOMC Minutes:  Why They Reinforced the Fed’s Hawkish Tone

Futures are moderately lower on falling expectations for Chinese economic stimulus.

A Nikkei article stated Chinese economic stimulus could be much smaller than expected, and that hit the Hang Seng hard (down 3%) and is weighing on global indices.

Economically, German Manufacturers’ Orders were much stronger than expected, rising 6.4% vs. (E) 2.0%.

Today focus will be on economic data and the key reports, in order of importance, are:  JOLTS (E: 9.9M), Jobless Claims (E: 245K), ISM Services Index (E: 50.8) and ADP Employment Report (E: 235K).  Hopes for a “No Landing” are the reason stocks rallied in late June, so markets will want to see better than expected data across these reports to help support those recent gains.  Also, there is one Fed speaker today, Logan (8:45 a.m. ET), but she shouldn’t move markets.

Tom Essaye Joins Yahoo Finance To Discuss The Economy on February 21st, 2023

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‘The economy is stronger than everybody thought,’ Sevens Report Research Founder says

Sevens Report Research Founder and President Tom Essaye to discuss the expectations for the Fed’s upcoming FOMC minutes meeting, the future of Fed policy pathway, why investors should remain on recession watch in 2023, and the outlook for markets. Click here to watch the full discussion.

Tom Essaye Interviewed on TD Ameritrade Network The Watch List on January 5, 2022

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Breaking Down The FOMC December Minutes

The Fed is already actively discussing shrinking the balance sheet showing they are serious about being hawkish, and stocks dropped…says Tom Essaye of The Sevens Report. Click here to watch the full interview.

 

Why Did Stocks Drop?

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What’s in Today’s Report:

  • Why Did Stocks Drop?
  • Fed Minutes Takeaways
  • EIA Data Takeaways and Oil Update

There are risk-off money flows across asset classes this morning as investors fear that central banks are poised to tighten policy into a global economic slowdown this fall.

This week’s options expiration is likely amplifying the volatility this morning.

There were no market-moving economic reports or material news developments overnight.

Today, there are two economic reports to watch: Jobless Claims (E: 360K) and the Philadelphia Fed Manufacturing Index (E: 25.0).

No Fed officials are scheduled to speak today but there is a 30-Year TIPS auction at 1:00 p.m. ET that could move bond yields.

Volatility is likely to remain elevated today as we get closer to tomorrow’s options expiration while trader conviction is low given Jackson Hole looming next week as well as the fact that investor sentiment has deteriorated this week.

Editor’s Note:  No Report Tomorrow

There will be no Report tomorrow, as I will be attending a funeral.  Last week, my father, Tim Essaye, Sr., unexpectedly passed away. His funeral and memorial will be held today. 

My dad helped get me on Wall Street when I got out of college and without his support and encouragement, I wouldn’t have had the courage, with my wife Alison pregnant with our first child, to leave a good job and start a new, daily market report.

He was the first subscriber to the Sevens Report.

So, for the first time in the nearly 10 years since I started the Sevens Report, there will be no issue on a trading day, as I will be focused today on celebrating his life with our family and friends.

I apologize for this inconvenience and thank you for your understanding.