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Will the Fed Cut Rates?

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What’s in Today’s Report:

  • FOMC Preview

U.S. futures and most international equity markets were mildly lower overnight after corporate results from GOOGL missed estimates while economic data was mixed.

China’s PMI Manufacturing Index fell to 50.2 from 50.8 in April (but importantly remained above 50, in expansion territory) while the Eurozone Q1 GDP Flash was 1.2% vs. (E) 1.1% year-over-year which helped ease recently rising concerns about weakness in EU growth metrics.

Looking into today’s session, the calendar remains busy however with the FOMC Meeting getting underway, it would take a material surprise in economic data or multiple earnings shocks to really move the market ahead of tomorrow’s Announcement and Powell’s press conference.

Economically, there are four releases to watch this morning: Employment Cost Index (E: 0.7%), S&P Case-Shiller HPI (E: 0.3%), Consumer Confidence (E: 127.0) and Pending Home Sales (E: 0.7%).

On the earnings front, there are several notable companies releasing reports today including: GE ($0.09), MA ($1.67), BP ($0.68%), GM ($1.09), PFE ($0.76), and STX ($0.72) before the open and AAPL ($2.37) and AMD ($0.05) after the market close.

An Update from Dr. Copper

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What’s in Today’s Report:

  • An Update from Dr. Copper

Futures are little changed following more U.S./China trade optimism and mixed earnings.

President Trump said he expects to host Chinese Premier Xi at the White House “soon” and a trade deal could be signed in June.

Earnings after the bell were mixed at INTC badly missed, while F and AMZN both posted solid numbers.

There was no material economic data overnight.

Today should be a generally quiet day as the volume of earnings reports subsides (reports we’re watching include XOM ($0.75), AAL ($0.50) and CVX ($1.26)) and are just two economic reports: Preliminary Q1 ‘19 GDP (E: 2.2%) and Consumer Sentiment (E: 97.1).  If GDP is a bad miss (which is unlikely) that might temporarily pressure stocks, but really markets are already looking ahead to next week, which is absolutely full of important macro events and continued earnings.

Why Average Inflation Matters

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What’s in Today’s Report:

  • Why Average Inflation Matters to You

Stock futures are slightly lower this morning after a quiet night of news. There were no economic releases overnight leaving investor focus primarily on earnings.

Oil is notably hitting fresh 2019 highs this morning which should continue to drive outperformance in the energy sector today.

Looking to the calendar for today, there is one economic report due out of Europe: Eurozone Consumer Confidence Flash (E: -6.9) and two reports on the U.S. housing market: FHFA House Price Index (E: 0.4%) and New Home Sales (E: 645K). There are no Fed speakers today.

Additionally, price action in stocks has been especially sensitive to the bond market since the March Fed meeting and while volatility has eased in both markets, there is a 2 Year Treasury Note Auction at 1:00 p.m. ET that could move markets.

Investors’ primary focus however will remain on earnings. Some notable releases today include: TWTR ($0.15), KO ($0.46), PG ($1.04), SNAP ($0.12), and EBAY ($0.63).

Time to Buy Puts?

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What’s in Today’s Report:

  • Time to Buy Puts?
  • Weekly Market Preview (All About Earnings)
  • Weekly Market Cheat Sheet (GDP Friday is the Key Report)

Futures are modestly lower thanks to higher oil and new concerns about the longevity of Chinese economic stimulus.

The South China Morning Post released an article saying Chinese officials will again focus on structural economic reforms, which means limited future economic stimulus.

Oil is 2% higher following reports the Trump administration will not renew any Iranian import wavers.

Today there is only one economic report, Existing Home Sales (E: 5.30M), and that won’t move markets.

So, the key to trading today will be earnings, and here are the reports we’re watching:  HAL ($0.23), KMB ($1.54), WHR ($3.04).

Is Healthcare A Buy? (It’s Negative YTD)

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What’s in Today’s Report:

  • Why Stocks Faded At the Open Yesterday (For the Second Straight Day)
  • Is Healthcare a Buy? (XLV is lagging the S&P 500 by 16% YTD)
  • Oil and Energy Update

Futures are slightly lower following a night of mixed economic data.

EU flash composite PMIs missed estimates (51.3 vs. (E) 51.8) and that’s a disappointment given recent stabilization in China.  But, not all the data was bad as UK Retail Sales rose 1.1% vs. (E) 0.2%, likely on Britons stocking up goods ahead of the hard Brexit deadline in late March.

Today is the eve of a three day weekend but it’s going to be busy as we get a lot of economic data and important earnings.

Important data today includes (in order of importance):  PMI Composite Flash (E: 54.3), Retail Sales (E: 0.8%), Philly Fed  (E: 10.2) and Jobless Claims (E: 206K).  As we said in Monday’s report, the stronger the data, the better for stocks as there is no inflation threat right now (so good data won’t make the Fed hawkish).

On the earnings front, some releases we’ll be watching include:  AXP ($2.00), PM ($1.00), SLB ($0.30) and HON ($1.83).

Sevens Report – What’s in the Box?

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What’s in Today’s Report:

  • A Warning Sign from Box Shipments?
  • Gold Breakdown

Futures are climbing higher this morning while international shares were little changed overnight as investors digested upbeat Chinese economic data against mixed earnings.

Chinese Industrial Production (8.5% vs. E: 6.0%), and Retail Sales (8.7% vs. E: 8.3%) both handily beat expectations in March helping Q1 GDP rise 6.4% vs. (E) 6.3%. But, stabilizing Chinese growth is largely priced in to the market at current levels which is why the reaction has been largely muted by international traders.

Looking to today’s calendar, there is one economic report to watch: International Trade (E: -$53.6B) and two Fed officials are scheduled to speak: Bullard (12:30 p.m. ET) and Harker (12:30 p.m. ET).

The main focus however will remain earnings. A few notables to watch include: MS ($1.17), PEP ($0.92) before the open and AA ($0.17) after the close.

Economic Breaker Panel: April Update

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What’s in Today’s Report:

  • Economic Breaker Panel Update – More Improvement
  • Earnings Review – Not the Greatest Start

Futures are tracking international shares higher this morning amid dovish central bank speak and earnings optimism.

Both Evans and Rosengren made dovish comments regarding inflation which is helping influence mild risk-on money flows this morning.

Economically, the German ZEW Survey was mixed as the headline weakened for a seventh straight month while the forward looking business expectations rose for the sixth time in a row.

Today, there are two economic reports to watch: Industrial Production (E: 0.3%) and the Housing Market Index (E: 63), and Kaplan speaks at 2:00 p.m. ET.

Earnings however will remain the primary market focus with notable reports being released from BAC ($0.65) ahead of the bell and NFLX ($0.57) and IBM ($2.21) after the close. With a mixed start to the season, if we do not see corporate results begin to improve, underwhelming earnings will become a growing headwind on equities this week.

The Easiest Way to Explain This Market To Clients

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What’s in Today’s Report:

  • The Easiest Way To Explain This Market To Clients
  • Technical Market Update (Volume Not Confirming The Rally)
  • A More “Hawkish” Fed than we think?

Futures and global markets are moderately higher as global economic data beat expectations, furthering hopes of a global growth rebound.

March Chinese exports handily beat estimates, rising 14.2% vs. (E) 8.4% while EU Industrial Production wasn’t as bad as feared (-0.2% vs. (E ) -0.6%).

Focus turns to earnings this morning as all eyes will be on three big banks:  JPM ($2.32), WFC ($1.08), PNC ($2.59).  If they post solid numbers, then combined with the good Chinese economic data, we could see an extension of this rally.

Outside of earnings, we do get Import/Export Prices (E: 0.4%/0.3%) and Consumer Sentiment (E: 98.0).  Plus, Powell speaks to House Democrats but no comments on policy are expected and none of those events should move markets.

Tom Essaye Quoted in Barron’s on April 9, 2019

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“It is a very quiet morning with stock futures trading slightly lower while most overseas markets edged higher overnight as investors look ahead to catalysts later in the week,” writes The Sevens Report’s Tom Essaye. Click here to read the full article.

Earnings Preview: Good, Bad, Ugly

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What’s in Today’s Report:

  • Earnings Season Preview: The Good, the Bad, and the Ugly

Futures are drifting higher this morning while overseas markets were mixed during a quiet night of trading as investors look ahead to a busy calendar of events today.

There were a few economic releases o/n but none materially moved markets with international focus on this morning’s ECB Announcement (7:45 a.m. ET) and Draghi’s press conference afterwards where he is expected to shed light on TLTRO plans.

Looking into the U.S. session today, it is shaping up to be a busy one. In chronological order, there is one economic report ahead of the open: CPI (E: 0.3%, 0.2%), weekly EIA data is due out at 10:30 a.m. ET, and the Fed’s Quarles is schedule to speak at 11:50 a.m. ET.

Moving to the afternoon, there is a 10-Year Treasury Note Auction at 1:00 p.m. ET and if the outcome moves yields materially, stocks will likely follow. Then, the FOMC March Meeting Minutes are due out at 2:00 p.m. ET and the Fed’s Kaplan speaks later this evening: 7:00 p.m. ET.

With so many moving parts today, it will be important to keep an eye on yields as the bond market will offer the best read of how investors are digesting all of the day’s events.

Specifically, the 10 year yield has stabilized at 2.50% recently and if it can move higher, stocks could grind higher as well, however, if yields begin to drop like they did two weeks ago, volatility is likely to rise again, potentially significantly.