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Was the Fed Decision Positive? (No, Not Really)

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What’s in Today’s Report:

  • Was the Fed Decision Positive? (No, Not Really)
  • EIA Analysis and Oil Market Update

Futures are solidly higher following a mostly quiet night of news as markets further digested Fed Chair Powell pushing back on the idea of future rate hikes.

Economic data showed more buoyant inflation globally as Swiss CPI rose 1.4% vs. (E) 1.2% while the Euro Zone Manufacturing PMI met estimates.

Today the focus will remain on economic data as we get two notable economic reports, Jobless Claims (E: 211K) and Unit Labor Costs (E: 3.3%). If both are “hot” (and especially if Unit Labor Costs are high) then expect higher yields and more pressure on stocks ahead of tomorrow’s Jobs Report.

Earnings season is winding down but there’s an important report via AAPL (E: $1.51) after the close, while I’ll also be watching SQ ($0.72), COIN (E: $1.20) and BKNG ($14.03) for any insight into the state of the U.S. consumer.

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Threat of More Rate Hikes? (FOMC Preview)

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Threat of More Rate Hikes? (FOMC Preview): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview – The Fed Could Threaten Rate Hikes
  • Chart – S&P 500: Support, Resistance, and a Downside Target of 4,785
  • BOJ Yen Intervention Update: Not a Market Negative Yet

Futures are lower following mixed international economic data overnight while solid earnings by Samsung Electronics is helping offset negative earnings from European car makers.

In Asia, Chinese PMI data and Australian Retail Sales were net negative, but Eurozone core inflation favorably cooled and GDP firmed easing stagflation worries in Europe.

Today, the busy week of economic data begins with the Employment Cost Index (E: 0.9% q/q), Case-Shiller Home Price Index (E: 0.1%), and Consumer Confidence (E: 104.0) as the Fed meeting gets underway.

Earnings season also remains in full swing with PYPL ($1.24), MCD ($2.70), MMM ($2.08), and KO ($0.69) reporting before the bell and AMZN ($0.81), AMD ($0.61), and SMCI ($5.79) releasing results after the bell.

Bottom line, being the end of the month and the start of the Fed meeting, trader positioning should keep markets relatively quiet today as tomorrow’s FOMC decision looms, but if any of the data comes in “too hot” or “too cold,” expect an uptick in volatility.

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Why Stocks Have Really Pulled Back

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Why Stocks Have Really Pulled Back: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Stocks Have Really Pulled Back
  • Weekly Market Preview:  Will the Fed and Growth Data Make the Pullback Worse This Week?
  • Weekly Economic Cheat Sheet:  A Very Busy Week (Fed Wednesday, Jobs Report Friday)

Futures are slightly higher following a mostly quiet weekend of news as markets digest last week’s gains ahead of a busy and important week of catalysts.

Economically, Spanish Core HICP (their CPI) rose 2.9% vs. (E) 3.3% y/y, offering a positive note on inflation.

Geo-politically, Secretary of State Blinken is in the Mid-East to push for another Gaza ceasefire and oil is down slightly in response.

Looking forward, this is a very busy and important week filled with numerous potential catalysts including Wednesday’s Fed decision and Friday’s jobs report, but the week starts slowly from a data standpoint as there are no notable reports today.

On earnings, we get some important updates from semiconductor companies today and reports we’re watching include: ON ($1.04), NXPI ($3.16), SOFI ($0.01).

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Core PCE Price Index Preview (Next Potential Catalyst)

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Core PCE Price Index Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Core PCE Price Index Preview (Next Potential Catalyst)

Futures are solidly higher following better than expected tech earnings overnight.

GOOGL (up 12% pre-open) and MSFT (up 4% pre-open) posted strong earnings results and that’s leading a rebound in tech stocks and pushing futures higher.

Economically, the Bank of Japan rate decision was slightly dovish as it kept rate unchanged and didn’t reduce QE.

Today focus will be on the Core PCE Price Index (E: 0.3% m/m, 2.6% y/y) and the bottom line is this number needs to be at, or ideally under, expectations to help further fuel the earnings driven bounce in futures.  The other economic report today is the University of Michigan Consumer Sentiment Index (E: 77.9, 1-Yr Inflation Expectations: 3.1%) but barring a jump in inflation expectations, it shouldn’t move markets.

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Here We Go Again: Why Bad Data Isn’t Good for Stocks

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Here We Go Again: Why Bad Data Isn’t Good for Stocks: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Here We Go Again: Why Bad Data Isn’t Good for Stocks
  • EIA Analysis and Oil Market Update

Futures are moderately lower following disappointing tech earnings overnight.

META (down 13% pre-open), IBM (down 10% pre-open) and NOW (down 5% pre-open) all posted disappointing results and tech stock weakness is weighing on futures.

Economically there was no notable data overnight.

Today focus will be on economic data and earnings.  From a data standpoint, Advanced Q1 GDP (E: 2.3%) is the key report and markets will want to see a headline that meets (or slightly misses) expectations and price data that’s in-line or lower than estimates (if that occurs, July rate cuts hopes will rise).  Other data today includes Jobless Claims (E: 215K) and Pending Home Sales (E: 1.0%).

On earnings, there is a deluge of reports today, but the key potential market movers include:  MSFT ($2.81), GOOGL ($1.49), INTC ($0.11), AAL (-$0.28), RCL ($1.30), CAT ($5.12), TMUS ($1.89).

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How Nervous Are Investors Right Now?

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What’s in Today’s Report:

  • Sentiment Update – How Nervous Are Investors Right Now?
  • A Timely Chart: NVDA Falls to Target From Last Thursday’s Report

U.S. equity futures are tracking global markets higher after European economic data came in better than expected and traders optimistically look ahead to big-tech earnings.

The EU’s April PMI Composite Flash rose 1.1 points to 51.4 vs. (E) 50.8 thanks to a solid 52.9 Services sub-index print. The strong data is helping ease worries of stagflation and a weakening consumer which have been simmering so far in 2024.

Today, focus will be on economic data early with the PMI Composite Flash (E:51.9) release and New Home Sales (E: 670K) report due out this morning.

There are no Fed speakers today but the Treasury will hold a 2-Yr Note auction at 1:00 p.m. ET which could offer insight into any changes in Fed policy expectations (the risk to stocks is an auction with weak demand that sends the 2-Yr yield to-or-through 5%).

Earnings season also continues to pick up today with UPS ($1.33), GM ($2.06), LMT ($5.80), GE ($0.67), PEP ($1.52), and SHW ($2.25) reporting before the bell while TSLA ($0.49) and V ($2.43) will release results after the close.

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Did Powell Really Get More Hawkish on Tuesday?

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Did Powell Really Get More Hawkish on Tuesday? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Did Powell Really Get More Hawkish on Tuesday?
  • EIA Update and Oil Market Analysis

Futures are slightly higher on better-than-expected earnings and following a generally quiet night of news.

Taiwan Semi-Conductor (TSMC) posted solid earnings and that’s helping to offset yesterday’s disappointing ASML report and giving tech stocks (and global stocks) a mild boost.

Looking forward, today is a busy day of data, Fed speak and earnings.

Starting with the economic data, the market needs Goldilocks reports to help stocks and bonds stabilize, which means readings at or below expectations, especially on the price indices in the Philly Fed survey.  Key reports today include:  Jobless Claims (E: 215K), Philly Fed (E: 0.0) and Existing Home Sales (E: 4.18 M).

Turning to the Fed, there are three speakers today:  Bowman (9:05 a.m. ET), Williams (9:15 a.m. ET) and Bostic (11:00 a.m. ET).  Williams is the most important of the three, but if the commentary reinforces there are no near-term rate cuts coming, that will be an incremental headwind on stocks and bonds.

Finally, on the earnings front, the calendar continues to heat up and key reports today include:  TSMC ($1.29), NFLX ($4.51), PPG ($1.86), WAL ($1.70).

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A Return to Reasonable Valuations? April MMT Chart

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A Return to Reasonable Valuations? April MMT Chart: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • A Return to Reasonable Valuations? April MMT Chart
  • Dip-Buying Becomes Riskier in Late-Cycle Environments
  • Housings Starts Plunge in March – Chart

Futures are higher this morning as the geopolitical situation in the Middle East is tense but stable, inflation data was largely as-expected, and good consumer-focused earnings are helping offset soft sales from chip-maker ASML.

Economically, EU Core CPI met estimates at 2.9% while the U.K.’s Core CPI figure was “warm” at 4.2% vs. (E) 4.1% but neither report is materially impacting the general “higher for longer” central bank policy stance in place right now.

There are no notable economic reports today and just two late-day Fed speakers: Mester (5:30 p.m. ET), Bowman (7:15 p.m. ET).

That will leave trader focus on the Treasury’s 20-Yr Bond auction at 1:00 p.m. ET as weak demand would add upward pressure on yields and pressure stocks.

Additionally, earnings season continues with TRV ($4.75), CFG ($0.75), CSX ($0.45), and DFS ($2.98) reporting today, however, none of those names should have a significant impact on the broader market unless there is a glaring disappointment or upside surprise.

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Market Multiple Table: April Update

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What’s in Today’s Report:

  • Market Multiple Table – April Update
  • Retail Sales Takeaways
  • Empire State Manufacturing Index Disappoints

Futures are slightly lower amid Chinese growth worries, hawkish Fed expectations and simmering geopolitical risks.

Economically, Chinese GDP was solid (5.3% vs. E: 4.9%) but Retail Sales were soft at 3.1% vs. (E) 5.0% and Home Prices dropped 2.2% y/y which weighed on Asian markets overnight.

Looking into today’s session, there are two economic reports to watch: Housing Starts (E: 1.48 million) and Industrial Production (E: 0.4%). Markets are looking for slowing growth in the economic data so anything “too hot” or “too cold” in today’s releases will further weigh on stocks.

There are also several Fed speakers today. In chronological order they are: Jefferson (9:00 a.m. ET), Williams (12:30 p.m. ET), Barkin (1:00 p.m. ET), and most importantly, Powell (1:15 p.m. ET). Any commentary supporting “higher for longer” Fed policy rates will be negative while a dovish surprise could spark a sharp short-covering rally given near-term oversold conditions in equity markets.

Earnings season also continues today with BAC ($0.77), MS ($1.69), UNH ($6.65), and JNJ ($2.64) reporting ahead of the bell while UAL (-$0.53) and JBHT ($1.53) will release results after the close.

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Understanding Why the Decline in Inflation Has Stalled

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Understanding Why the Decline in Inflation Has Stalled: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Understanding Why the Decline in Inflation Has Stalled

Futures are slightly lower following more disappointing Chinese economic data and as geo-political concerns rise.

Chinese exports fell –7.5% vs. (E) -1.9% underscoring that growth remains a major concern in the Chinese economy.

Oil and gold are sharply higher on a WSJ article stating Iran could directly retaliate against Israel this weekend (a direct attack on Israel by Iran would be a substantial escalation).

Today there is one notable economic report, Consumer Sentiment (E: 79.0), but barring major surprise that shouldn’t move markets.    Instead, focus will be on Fed Speak and earnings.

Starting with the Fed, we have several speakers today including Schmid (1:00 p.m.), Bostic (2:30 p.m.) and Daly (3:30 p.m.) and if they echo Thursday’s commentary that rate cuts aren’t coming soon, expect mild pressure on stocks.

On earnings, today is the start of the Q1 earnings season and several big banks report including: JPM ($4.18), BLK ($4.92), WFC ($1.09) and C ($1.29).  Focus will be on the results and on consumer commentary and the stronger the commentary, the more of a tailwind earnings will provide to stocks.

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