Tom Essaye quoted in Barron’s on May 21, 2019. “Today’s news was a positive development, but by no means a game-changer for the broader Huawei situation…” Click here to read the full article.
Tom Essaye quoted in CNBC on May 17, 2019. “Through any lens, this is a broadside against the Chinese government, which is generally considered to be the beneficial…” Click here to read the full article.
What’s in Today’s Report:
- Updated Market Outlook (Post U.S./China Trade Breakdown)
- Weekly Market Preview
- Weekly Economic Cheat Sheet
Futures are modestly lower following an uneventful weekend as investors digest Friday’s negative trade headline (that U.S./China trade discussions have been suspended).
On trade, there was no new news over the weekend, but several U.S. tech firms have stopped conducting business with Huawei, per the Commerce Department decision, and that’s just further escalating the U.S./China trade conflict.
Economically, there were no market moving reports (Japanese GDP was stronger than estimates but the details weren’t great).
There are no economic reports today but there are multiple Fed speakers, most important of which is Powell (7:00 p.m. ET), although he’s not expected to make extensive comments on policy. Other Fed speakers today include: Bostic (8:50 a.m. ET), Harker (9:30 a.m. ET), Williams & Clarida (1:00 p.m. ET).
Given the lack of data and important Fed speak, trade headlines should drive markets today and any formal retaliation by China for the Huawei decision will make the trade situation worse, and likely pressure stocks.
What’s in Today’s Report:
- FOMC Preview
U.S. equity futures are little changed this morning after a generally quiet night as investors focus turns to the Fed.
Late yesterday, the DOJ officially accused Huawei with financial fraud, stealing trade secrets, and sanctions violations and formally requested the extradition of the CFO from Canada which mildly pressured stock futures o/n.
Today, there are two, second tiered economic reports due to be released: S&P Case-Shiller HPI (E: 0.4%) and Consumer Confidence (E: 124.6), and the FOMC meeting begins which will likely bring a sense of “Fed paralysis” over the markets.
Earnings season remains in full swing and there are a few notable corporate releases on the calendar today: VZ ($1.09), MMM ($2.27), PFE ($0.63), AAPL ($4.17), AMD ($0.09), EBAY ($0.68).
If earnings are generally in-line (especially AAPL after the close) then the market will likely remain fairly choppy into tomorrow’s Fed Announcement and Powell’s press conference.
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