If there’s a reason for the rally, it’s the growing sense that the Fed won’t…market analyst Tom Essaye, author of the Sevens Report, wrote in a Tuesday email. Click here to read the full article.
How the Fed tapers is the next major variable for this market…wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are tracking most global equity markets higher this morning as Chinese tech shares recovered from recent declines and trader focus is shifting ahead to the Fed’s Economic Policy Symposium later in the week.
Economically, German GDP rose 1.6% vs. (E) 1.5% in the second quarter, easing some concerns that the global economic recovery is losing momentum.
Today, there is one economic report due out: New Home Sales (E: 700K) but it shouldn’t materially move markets and no Fed officials are scheduled to speak.
There is a 2-Yr Treasury Note auction at 1:00 p.m. ET, and given the increased sensitivity towards taper plans and interest rates right now, the outcome could move markets in the afternoon.
What’s in Today’s Report:
U.S. futures are lower this morning amid new regulatory threats for Chinese tech companies, while Delta variant concerns linger and traders look ahead to fresh U.S. data.
Chinese regulators proposed a new set of rules for internet and technology companies overnight which once again triggered a wave of selling in Chinese markets, specifically in big cap tech names.
Economically, the Eurozone GDP flash met estimates while U.K. wage growth hit a new record in July the latest evidence that stagflation may be an emerging economic trend (more on that in today’s edition of the Report).
Looking into today’s session, there are two notable economic reports due out in the U.S. this morning: Retail Sales (E: -0.2%), and Industrial Production (E: 0.5%).
As has been the case recently, investors will be looking for data that is good enough to suggest we are not falling deeper towards a stagflationary environment but not so strong that it pulls forward expectations for tapering QE (the key to reading the data will be to monitor the reaction in the yield curve; we want to see steepening).
Finally, Fed Chair Powell will speak as part of a virtual town hall event at 1:30 p.m. ET this afternoon and the markets will be looking for any new clues as to the Committee’s taper plans/views of the economic recovery. For now, a continued, slightly dovish stance remains the best case scenario for stocks as another hawkish “tilt” would likely spark a run higher in yields, potentially weighing on broader equity markets.
The consensus expectations for the Federal Reserve monthly asset purchasing is that the Fed will announce a plan for tapering sometime in…Essaye said. Click here to read the full article.
Well, I think that the 5-year tips over treasuries breakeven is heavily influenced by…Tom Essaye from Sevens Report Research. Click here to see the full interview.
The consensus expectations for the Federal Reserve monthly asset purchasing is that the Fed…Essaye said. Click here to read the full article.
The July jobs report reinforces the fact that the Fed will reduce its quantitative easing over the…Tom Essaye, founder and chairman of Sevens Report Research said. Click here to read the full article.
What’s in Today’s Report:
Stock futures are rebounding following yesterday’s losses as positive earnings help offset renewed volatility in Chinese markets and mixed Fed speak to start the week.
Volatility in Chinese equities spiked again overnight as regulators reportedly took aim at gaming companies, but the state-owned news article that initiated the largely tech-focused selling was removed and Chinese indices ended well off the lows.
Economically, EU PPI was the latest “hot” inflation print as it surprisingly rose 0.1% to 1.4% vs. (E) 0.6% in June, but for now, investors are largely shrugging off the release.
Today, there are two economic reports: Motor Vehicle Sales (E: 15.7) and Factory Orders (E: 0.8%) as well as one Fed official scheduled to speak: Bowman (2:00 p.m. ET), however, they should not materially move markets with the July jobs data looming.
Solid earnings have been a major supporter of equity markets in recent weeks and the Q2 reporting season remains in full swing with BABA ($2.24), LLY ($1.89), CLX ($1.29), BP ($0.61), and COP ($1.15) releasing results before the bell, and notables LYFT (-$0.24) and AMGN ($4.23) reporting after the closing bell.
Bottom line, the sharp drop in bond yields played a big role in yesterday’s stock market pullback, so if Treasuries stabilize today, stocks should be able to regain some ground however there are several risks that could see the major indexes make new lows for the week including hawkish Fed chatter and negative Delta-variant developments.
What’s in Today’s Report:
Futures are marginally lower as increased concerns about regulation in China caused a sharp drop in Chinese shares, and that’s weighing on global equities.
The Hang Seng dropped more than 4% on Monday on fears of increased regulation from the Chinese government, following reports China was going to make the education business sector “not for profit.”
COVID headlines remained generally unchanged over the weekend as cases continued to rise in the U.S, although governments continue to resist restrictions and lockdowns.
Today there’s only one notable economic report, New Home Sales (E: 800k), and that shouldn’t move markets. On the earnings front, the key report today comes after the close (TSLA $0.96), so focus will be on COVID headlines and if there are any reports of increased restrictions or lockdowns here in the U.S., that will hit stocks.