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FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Gold Update: Technical Weakness Ahead of the Fed

Futures are little changed this morning as investors weigh dovish central bank developments against in-line inflation data in Europe as focus turns to U.S. data and the Fed.

The RBA minutes revealed policy makers are open to extending QE beyond the current September deadline while CPI reports in Europe all met estimates.

This morning is lining up to be a busy one from a potential catalyst standpoint with a slew of economic data due to be released including: PPI (E: 0.6%), Retail Sales (E: -0.4%), Empire State Manufacturing Index (E: 22.0), Industrial Production (E: 0.6%), and Housing Market Index (E: 83).

The June FOMC Meeting also begins today which will likely initiate a sense of market paralysis ahead of tomorrow’s announcement and Powell’s press conference however a 20-Year Treasury Bond auction at 1:00 p.m. ET could move Treasuries and ultimately impact stocks in the early afternoon.

Four Assumptions for the Next Leg of the Rally

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What’s in Today’s Report:

  • Four Assumptions for the Next Leg of the Rally
  • Weekly Market Preview:  Will the Fed Acknowledge Tapering is Being Discussed?
  • Weekly Economic Cheat Sheet:  All About the Fed (But Notable Growth Data this Week Too)

Futures are slightly higher following a quiet weekend as markets look ahead to Wednesday’s FOMC decision.

The G-7 meeting in England produced a lot of headlines including broad agreement on a minimum corporate tax.  But there were little specifics of any new policies released and the meeting won’t impact markets.

Economic data was sparse as the only notable number was Eurozone Industrial Production which rose 0.8% vs. (E) 0.4%.

Today there are no economic reports and no Fed speak (the Fed meeting starts tomorrow so officials are in their “quiet period” ahead of the meeting) so for markets to extend last week’s rally we’ll need to get corporate commentary that confirms inflation pressures are “peaking.”  Absent that, I’d expect stocks to largely tread water ahead of Wednesday’s FOMC decision.

Tom Essaye Quoted in Barron’s on May 20, 2021

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Virgin Galactic Soars, Merck Falls, and Stocks Are Down Again

“Futures are marginally lower as markets digested the slightly hawkish FOMC minutes,” writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Unseen Opportunity on March 17, 2021

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The Whole Market Is Watching The “Median 2023 Dot”

“It is no exaggeration to say that this FOMC meeting has the potential to be the most important one in years as the market is effectively…” said Tom Essaye, founder of the Sevens Report, in a note. Click here to read the full article.

What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • What the FOMC Decision Means for Markets
  • FOMC Takeaways
  • EIA Data Analysis and Oil Update

Stock futures are under pressure this morning (Nasdaq futures down over 1%) as the 10 year Treasury yield approached a new 52-week high of 1.75% overnight amid further digestion of yesterday’s Fed decision and lingering inflation concerns.

There were no notable economic reports or market moving headlines overnight.

Today, there are two important economic releases to watch ahead of the bell: Jobless Claims (E: 700K) and the Philadelphia Fed Manufacturing Index (E: 24.0) as investors will be looking for continued improvement in these two current month data points.

There are no Fed officials speaking today however the Treasury will hold a 10-Yr TIPS auction at 1:00 p.m. ET and if the outcome triggers a further spike in the 10 year yield, expect selling pressure on tech shares to weigh on the broader equity markets as the Fed decision continues to be digested.

Tom Essaye Quoted in CNBC on July 28, 2020

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“To be clear, from an actual policy standpoint, it’s universally expected that the Fed won’t make any changes to 1) Rates…” wrote Tom Essaye, editor of the Sevens Report. Click here to read the full article.

Market Multiple Support Levels

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What’s in Today’s Report:

  • Bottom Line: Market Multiple Support Levels to Watch
  • Durable Goods and Consumer Confidence Takeaways

Futures are trading higher this morning thanks to strong earnings from AAPL and positioning into today’s Fed Announcement while coronavirus fears continue to ease as the mortality rate is importantly holding steady near 2%.

Today is lining up to be a busy day as there are a slew of potential market catalysts on the calendar.

First, there are two economic releases to watch: International Trade in Goods (E: -$66.9B) and Pending Home Sales (E: 0.4%) before the Fed events kick off with the FOMC Meeting Announcement at 2:00 p.m. ET, followed by the Fed Chair Press Conference at 2:30 p.m. ET.

Meanwhile, we are in the peak of Q4’19 earnings season and there are a number of major U.S. corporations reporting results today including: BA ($1.73), T ($0.87), MCD ($1.96), MA ($1.87), GE ($0.18), GD ($3.46), DOW ($0.74), MSFT ($1.32), FB ($2.51), TSLA ($2.03), and PYPL ($0.84).

Bottom line, the Wuhan coronavirus outbreak, disappointing economic data, a hawkish Fed, and negative earnings surprises are all risks that could cause volatility in stocks into the end of the week, however, the market is currently showing resilience in the face of these potentially negative catalysts which leaves the pain trade higher for now.

Why The Fed Was More Bullish Than It Seems

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What’s in Today’s Report:

  • Why The Fed Meeting Was More Bullish Than It Seems
  • Why the UK Election Matters to You (Good/Bad/Ugly Preview)
  • EIA Update – Where Will Oil Go?

Futures are slightly higher following a generally quiet night as markets digest yesterday’s Fed meeting and wait on important trade news and the results of the UK election.

Today is a big day in the U.S./China trade as Trump is meeting with senior advisors to decide the fate of the 12/15 tariff increases.  It’s widely expected they will be delayed and if they are not, that will be a negative shock for markets.

Economic data was again mixed as Euro Zone IP missed (-0.5% vs. (E) -0.3%) while German CPI met expectations.

Today will be a busy day.  First, regarding the trade meeting, it’s unclear if a formal announcement will be made on the decision, but it could come at any time so markets will be watching the tape closely.  Additionally, there is also an ECB Meeting this morning and it’s new ECB President Lagarde’s first press conference.  Finally, we should know the results of the UK election by this evening, and the key number for the Torys is 335 seats.  Stocks will like any result above that number.

On the economic front, the only notable report is Jobless Claims (E: 213K).

Economic Breaker Panel: December Update

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What’s in Today’s Report:

  • Economic Breaker Panel: December Update

Stock futures are flat and international markets were little changed overnight amid very quiet newswires while investors look ahead to today’s Fed decision.

Economically, the Japanese PPI release was the only report out overnight and the headline met expectations at 0.2% which did not move markets.

In the energy market, oil futures are down nearly 1% after the API reported an inventory build of +1.4MM bbls vs. (E) -2.8MM ahead of today’s EIA report.

Today, the focus will be on the Fed decision with the Meeting Announcement at 2:00 p.m. ET and the Fed Chair Press Conference following shortly after at 2:30 p.m. ET.

Any significant market moves before the Fed are unlikely but there is one economic report to watch: CPI (E: 0.2%), and the EIA report at 10:30 a.m. ET could trigger a reaction in the energy market which could affect sector trading.

Beyond those catalysts, the trade war remains the single biggest influence on this market right now so investors will be looking for any incremental developments regarding the Dec. 15 tariff plans or news on a phase one trade deal.

Tom Essaye Quoted in MarketWatch on October 30, 2019

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“If the Fed clearly signals that this cut is the last cut for sometime, then I’d expect it a pretty nasty reaction from stocks as markets want more rate cuts…” wrote Tom Essaye, president of the Sevens Report, in a Tuesday note to clients. Click here to read the full article.

Jerome Powell_MarketWatch