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Owning Gold for the Right Reasons

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What’s in Today’s Report:

  • Owning Gold for the Right Reasons
  • What About Silver?
  • Fed Day

Futures are marginally higher ahead of the Fed as markets bounce from Tuesday’s declines thanks to decent earnings.

Earnings after the bell were decent as AMD and SBUX both rallied, although Visa (V) made cautious comments on consumer spending late in Q2, which again implies we’re seeing a potential stall in the economic recovery.

Economically there were no notable reports overnight.

Today the key event is the FOMC Decision (E:  No Change to Rates or QE) and Fed Chair Press Conference at 2:30 p.m. ET.  Again, if there’s going to be a surprise from the Fed today (which is unlikely) it’s going to come from the press conference – so we’ll be watching.

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview (What’s Expected/Dovish If/Hawkish If)

Futures are modestly lower following a quiet night of news as markets digest yesterday’s rally ahead of several days of critical earnings and tomorrow’s FOMC decision.

Economic data was sparse.  UK CBI Distributive Trades (it’s like retail sales) beat estimates rising to 4 vs. (E) -25 but the number isn’t moving markets.

Today there are only two notable economic reports,  Case-Shiller HPI (E: 4.2% yoy) and Consumer Confidence (E: 95.7) and neither should move markets.

Instead, focus will be on stimulus (negotiations will accelerate and the market expects a done deal in two weeks) and earnings.  Specifically, the volume of important earnings reports spikes between now and Friday, so we’ll be watching these results closely (especially the reports on Thursday).  Today, some notable earnings include:  MMM ($1.77), MCD ($0.76), PFE ($0.64), AMD ($0.16), SBUX ($-0.61), V ($1.02).

Is Super Cap Tech Momentum Fading?

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What’s in Today’s Report:

  • Is Super Cap Tech Momentum Fading?

Futures are modestly lower on momentum from yesterday’s declines combined with a further uptick in U.S./China geo-political tension.

Secretary of State Pompeo gave a  harsh speech on China Thursday, while China closed the U.S. consulate in  Chengdu, in a further escalation of tensions.

Positively, July EU flash composite PMIs handily beat expectations, surging to 54.8 vs. (E) 51.1, implying that a global economic recovery is ongoing.

Today the focus will be on the July Flash PMI (E: 50.3), and if we get a disappointing number (showing a lack of improvement from June) then we’ll see concerns grow that the U.S. recovery is “pausing” and that could weigh on stocks further.

Another Tailwind for European Stocks

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What’s in Today’s Report:

  • Another Positive for Europe (and European Stocks)
  • The Key Driver of the Precious Metals Rally

Stock futures are trading modestly lower this morning as rising U.S.-China tensions offset good economic data.

The U.S. directed China to close its consulate in Houston citing IP security risks, a move which China condemned as “an unprecedented escalation” of tensions.

Today, there are two economic reports to watch: FHFA House Price Index (E: 0.4%) and Existing Home Sales (E: 4.795M) while no Fed officials are scheduled to speak.

The Treasury will hold a 20-Yr Bond Auction at 1:00 p.m. ET and with yields near their lows for the year, a strong auction could act as a headwind for risk assets this afternoon.

Aside from those potential catalysts, investors will be watching the fluid situation between the U.S. and China for any signs of further deterioration in relations while earnings season remains in full swing with: BIIB ($7.99), and CP ($2.71) reporting before the open and TSLA (-$0.71), MSFT ($1.38), LVS (-$0.64), and CSX ($0.67) all due to release Q2 results after the close.

The New Stimulus Bill (Good, Bad, Ugly)

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What’s in Today’s Report:

  • Technical Take: Finally a Breakout
  • The New Stimulus Bill: Good/Bad/Ugly

Markets are risk-on this morning with U.S. stock futures tracking European shares higher after EU leaders finalized a $2T stimulus package overnight while Q2 earnings from IBM topped expectations after the close yesterday.

The EU spending package, which importantly incorporates EU bonds, still needs to be passed by the EU Parliament and may not begin to take effect until mid-2021.

Looking into today’s session, there are no economic reports to watch and no Fed officials are scheduled to speak however the earnings calendar picks up considerably.

Companies reporting Q2 results today include: KO ($0.40), LMT ($5.71), PM ($1.09), and SYF ($0.04) before the open and SNAP (-$0.09), UAL (-$9.13), TXN ($0.87), and COF (-$1.25) after the close.

Can Stocks Go Down Anymore?

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What’s in Today’s Report:

  • “Can Stocks Go Down Anymore?”
  • Weekly Economic Preview

Futures are higher this morning suggesting that U.S. equities will extend last week’s rally and rise in sympathy with global shares today as investors look ahead to earnings season while coronavirus cases continue to surge globally.

New COVID-19 cases continued to rise sharply over the weekend (Florida set a record with more than 15,000 new cases in a single day Saturday) but the death rate importantly remains low which is allowing the market to largely shrug off the spike.

PEP ($1.25) unofficially kicks off earnings season today while major banks including JPM, C, and WFC are due to report their earnings tomorrow which will be one of the more important market catalysts of the week ahead.

Looking into today’s session, things are lining up to be relatively quiet as there are no economic reports and investors will hear from just two Fed officials: Williams (11:30 a.m. ET) and Kaplan (1:00 p.m. ET).

Why Are Bond Yields At Multi-Month Lows?

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What’s in Today’s Report:

  • Is the Market Already Warning Us On Growth?
  • Why Are Bond Yields Threatening to Breakdown?
  • When the Coronavirus will matter more to stocks

Futures are moderately lower following a generally quiet night of news.

There was no notable economic or geo-political news overnight, and the reason stocks are lower this morning is digestion of this week’s news combined with still worsening coronavirus statistics.

Coronavirus trends remained concerning as the U.S. posted a second straight day of 60k plus new cases, while coronavirus related deaths remain near six week highs, increasing the chances that we see a further pause in the economic reopening, or even the re-imposition of widespread lockdowns.

Today there’s not much scheduled news, as PPI (E: 0.4%) is the only economic report and that won’t move markets.  So, focus will remain on whether we see more economic re-openings pause given the surge in coronavirus cases.  The low on Thursday in the S&P 500 was 3,115, and that’s a level to watch today.  If that’s broken, then we could see selling pressure increase in the near term.

A New Real Time Economic Indicator

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What’s in Today’s Report:

  • A New, Real Time Economic Indicator
  • EIA and Oil Market Update
  • Why The U.S. Dollar Is Near Multi-Month Lows Again

Futures are slightly lower following a generally quiet night of news as markets digest Wednesday’s afternoon rally.

Economic data was mixed as Japanese Machine Orders beat estimates (1.7% vs. (E) -9.0%), but German Exports missed expectations (rising just 9.0% vs. (E) 14%).

The U.S. set another record for new coronavirus cases (61k) although markets continue to take the surge in stride, for now (more on that in tomorrow’s Report)

Today focus will be on weekly Jobless Claims (E: 1.375M) and if they bounce back towards 2 million, that will be a headwind on stocks as it will imply the economic recovery is stalling.

We also have one Fed speaker, Bostic (12:00 p.m. ET), and presumptive Democratic nominee Biden will give his first major economic policy speech, but neither event should move markets.

Market Multiple Table July Update

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What’s in Today’s Report:

  • Market Multiple Table July Update

Stock futures are little changed today as investors digest the choppy trade from the front half of the week amid negative coronavirus headlines, ongoing tensions between the U.S. and China, but still mostly upbeat economic data.

Johns Hopkins University reported a new single day record increase of +60K new coronavirus cases in the U.S. yesterday which is weighing on sentiment this morning.

There were no market moving economic reports overnight and no new data is scheduled to be released in the U.S. today.

One Fed official will speak this afternoon: Bostic (12:15 p.m. ET) however investor focus will largely remain on the trends of the coronavirus outbreak and any new indication as to whether or not there will be another round of economic shutdowns which would be a clear negative for risk assets at current levels.

Technical Take: S&P 500 Partial Breakout

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What’s in Today’s Report:

  • Technical Take: S&P 500 Partial Breakout
  • ISM Non-Manufacturing Index Takeaways

Futures are down nearly 1% this morning, tracking losses in international shares as the recent rally had become near-term overextended and economic data disappointed overnight.

German Industrial Profits rose 7.8% in May but the headline missed estimates calling for a rebound of 10.5% which is weighing on general investor sentiment this morning.

Looking into today’s session, the economic calendar is fairly quiet with just one data point due to be released: May JOLTS (E: 4.900M), however there are four Fed officials speaking today which will warrant some attention: Bostic (9:00 a.m. ET), Quarles (1:00 p.m. ET), Barkin (2:00 p.m. ET) and Daly (2:00 p.m. ET).

Additionally, the Treasury will hold a 3-Yr Note Auction at 1:00 p.m. ET which could influence some movement in rates and the yield curve more broadly and, in turn, has the potential to affect the equity market.

Bottom line, the general theme in markets is profit-taking this morning which will leave very near term technical levels in focus. For the S&P 500 that means the support band between 3,135 and 3,150 will be a key zone to watch today, and if the index breaks below that price area the selling could accelerate as stop-orders are triggered on the way down.