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Market Multiple Table: January Update

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What’s in Today’s Report:

  • Market Multiple Table: January Update
  • OPEC+ Meeting Takeaways (Not So Bullish)

Stock futures are down modestly this morning, but off the overnight lows in sympathy with rising European shares while Asian markets declined on Chinese regulatory concerns and fresh COVID lockdowns in Hong Kong.

Final December Composite PMI’s were slightly disappointing but investors are already looking ahead to 2022.

Today, there are three economic reports to watch: Motor Vehicle Sales (E: 13.2M), ADP Employment Report (E: 414K), PMI Composite Final (E: 56.9). It will be important for the latter two to point to continued growth but not at a pace that would cause an additional hawkish shift by the Fed as that would likely send rates sharply higher and act as a headwind on broader equity markets.

There are no Fed speakers today but the minutes from the December FOMC meeting will be released at 2:00 p.m. ET.

Market Multiple Table Chart

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What’s in Today’s Report:

  • Market Multiple Table Chart
  • EIA Analysis and Oil Update

Futures are modestly lower on a slightly hawkish Reuters article about ECB QE and as markets digest this week’s rally.

According to Reuters, the ECB is considering tapering its QE program in March, which is sooner than markets expected and is another reminder that global central banks will be removing accommodation throughout 2022.

Economic data was sparse overnight as Chinese CPI met expectations rising 0.4%.

Today the only notable economic report is Jobless Claims (E: 223K) and they should show continued improvement in the labor market.  Additionally, markets will remain on the lookout for any official government data or more findings from MRNA/PFE on vaccine effectiveness against Omicron, and anything that implies substantial protection against infection and severe illness will be a tailwind on stocks (although at this point the market doesn’t view Omicron as a material threat so the tailwind won’t be that strong).

 

Annual Discounts on Sevens Report, Alpha and Quarterly Letter

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If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you want to extend current subscriptions or save money by upgrading to an annual subscription (across any Sevens Report product), please email: info@sevensreport.com.

Market Multiple Table: November Update

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What’s in Today’s Report:

  • Market Multiple Table: November Update

Stock futures pulled back overnight following the release of the Fed’s Financial Stability Report, which noted stretched asset prices, but markets have since stabilized as new domestic inflation data comes into focus.

Economically, the German ZEW Survey was mixed (Current Conditions missed, Economic Sentiment beat) while the NFIB report was mildly underwhelming however neither report materially moved markets in pre-market trade.

Looking into today’s session, earnings season continues with a lot of smaller cap companies reporting however focus this morning will be on economic data with the October PPI report due before the bell (E: 0.6% M/M, 8.6% Y/Y).

Then the Fed speaker circuit also remains active today with Bullard (7:50 a.m. ET), Powell (9:00 a.m. ET), Kashkari (1:30 p.m. ET) all speaking over the course of the session and the market will be looking for further confirmation that rate hikes will not commence before late 2022 otherwise we could see a hawkish reaction from markets.

Finally, there is a 10-Yr Treasury Note Auction at 1:00 p.m. ET that could move bonds and subsequently trigger a reaction from stocks.

Market Multiple Table: September Update

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What’s in Today’s Report:

  • Market Multiple Table: September Update
  • Chart: The Yield Curve is Steepening

Stock futures are trading modestly lower while most overseas markets declined overnight amid lingering concerns about the Delta variant’s impact on growth as well as the threat of a hawkish shift in tone from the ECB this week.

Economically, Japanese Q2 GDP was revised up to 1.9% vs. (E) 1.6% y/y which helped the Nikkei buck the trend and rally nearly 1% overnight.

Today, there are a few potential market-moving catalysts beginning with the July JOLTS report (E 10.0M). Then there are two Fed speakers to watch: Williams (1:10 p.m. ET) and Kaplan (6:00 p.m. ET). Finally, there is also a 10-Year Treasury Note Auction at 1:00 p.m. ET.

Bottom line, markets have become more “on edge” this week as the balance between economic growth trends and subsequent Fed policy outlook has become less certain.

So any combination of economic data deteriorating, the outlook for Fed policy getting more hawkish, or interest rates accelerating too quickly will continue to weigh on equities and other risk assets this week.

Market Multiple Update

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What’s in Today’s Report:

  • Market Multiple Table – June Update
  • ISM Manufacturing Index Takeaways

Futures are solidly higher today, rising with international markets thanks to easing geopolitical tensions offsetting COVID-19 worries and historic civil unrest in the U.S.

Chinese firms reportedly purchased multiple shipments of U.S. soybeans on Monday, contradicting earlier headlines that the government had broadly halted ag orders. The positive trade activity is acting as a tentative tailwind this morning.

There were no economic reports overnight but oil prices are up nearly 3% as OPEC+ (including Russia) is expected to extend current policy and output cuts beyond June.

Today, Motor Vehicle Sales (E: 10.0M) is the only economic data due to be released while there are no Fed officials scheduled to speak. That will leave investors largely focused on the simmering trade tensions between the U.S. and China as well as the ongoing, in some cases violent, protests across much of the U.S.

Market Multiple Table Update

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What’s in Today’s Report:

  • Market Multiple Table Update
  • Oil Rig Counts Continue to Plunge

Futures are solidly higher this morning, tracking overnight gains in most international equity markets amid optimism that global efforts to contain COVID-19 are working.

Coronavirus “hot spots” such as Italy and New York City are reporting early statistics that show “lock down” measures are working to contain the outbreak as the number of new cases is slowing while death rates are stabilizing.

German Industrial Production was the only notable economic report overnight and it was better than feared in February (0.3% vs. E: -0.8%), helping support the risk-on money flows today.

Looking into today’s session, there are two economic reports due to be released today: JOLTS (E: 6.638M) in the morning and Consumer Credit (E: $14.2B) in the afternoon, however investor focus will remain almost exclusively on coronavirus headlines as hope that the outbreak is being contained is the primary reason for this week’s stock rally.

Market Multiple Update

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What’s in Today’s Report:

  • Market Multiple Update

Futures are trading higher this morning while international markets were mixed overnight as investors weighed stimulus hopes against the continued spread of the coronavirus.

As cases of COVID-19 topped 90,000, the RBA was the first central bank to cut its official “cash rate” to a record low of 50 basis points overnight largely due to the outbreak.

Economically, the Eurozone HICP Flash for February and Unemployment Rate for January both met expectations overnight at 1.2% and 7.4%, respectively.

Today, there are a few potential catalysts to watch including one economic data point: Motor Vehicle Sales (E: 16.8M) and one Fed speaker after the close: Evans (6:30 p.m. ET), while politically, “Super Tuesday” will be in focus.

The coronavirus outbreak remains the single most important factor for global markets right now, however, and if there is a significant rise in reported cases of deaths related to the virus, this week’s risk-on money flows could begin to fade and potentially give way to more volatility.

Conversely, any news regarding emergency stimulus measures, especially by G7 nations could help this week’s rally extend higher.

Market Multiple Update

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What’s in Today’s Report:

  • Market Multiple Update

U.S. stock futures and global equities are solidly higher this morning thanks to emerging reports of breakthrough treatments for the coronavirus outbreak however details on the potential “cure” are limited at this time.

Economic data was mixed overnight as global Composite PMI data modestly topped expectations but Eurozone Retail Sales disappointed in December (-1.6% vs. E: -0.4%).

Today, there are three economic reports to watch starting with the first release of “jobs week,” the ADP Employment Report (E: 154K) which will be followed by International Trade figures (E: -$48.1B) and the ISM Non-Manufacturing Index (E: 55.2).

There is also one Fed official scheduled to speak after the close: Brainard (4:10 p.m. ET) and a few key earnings releases to watch: MRK ($1.14), GM ($0.01), QCOM ($0.85), and MET ($1.40).

As long as there are no major surprises from those potential catalysts, the market is likely to remain focused on the coronavirus outbreak and any emerging details regarding the potential breakthroughs in treatment that were reported overnight. Given the lack of specifics and the near-term overbought status of stocks here, the risk of a “sell the news” reaction does exist today.

Market Multiple Update

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What’s in Today’s Report:

  • U.S.-Iran Update
  • Market Multiple Update: Initial 2020 Edition

Global stocks plunged overnight on reports of an Iranian missile strike against U.S. military bases in Iraq. Risk assets have since recovered however as there were no U.S. casualties reported and Iran said the attacks “concluded” Tehran’s retaliation for the assassination of General Soleimani.

In Europe, German Manufacturers’ Orders were –1.3% vs. (E) 0.2% but the easing geopolitical tensions between the U.S. and Iran are supporting modest gains in EU markets.

Looking into today’s session, geopolitics will likely dominate trading but as long as tensions continue to ease between the U.S. and Iran, stocks will likely be able to trade with an upside bias.

As far as other catalysts go, there is one economic report to watch: ADP Employment Report (E: 157K), one Fed official scheduled to speak: Brainard (10:00 a.m. ET) and a 10-Yr T-Note Auction at 1:00 p.m. ET.

Updated Market Multiple Table

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What’s in Today’s Report:

  • Updated Market Multiple Table
  • Contrarian Play: Bullish Breakouts in the Energy Patch

U.S. stock futures are suffering mild losses this morning as investors digest yesterday’s more pronounced sector-rotation money flows amid mixed economic data with focus turning to central bank events over the next week.

Chinese CPI and PPI were slightly firmer than expected in August, while French and Italian Industrial Production figures were underwhelming.

In the U.S., the NFIB Small Business Optimism Index was a mild disappointment at 103.1 vs. (E) 103.5 mostly due to declining growth expectations.

The mixed economic data, however, was not enough to materially affect investor sentiment and therefore is only having a modest impact on price action this morning.

Today, there is just one economic report to watch: July JOLTS (E: 7.311M) and there are no Fed officials speaking as they are in their “blackout period” ahead of next week’s FOMC meeting.

That will leave investors focused on the recently emerging “rotation trade,” and due to the heavyweight that tech stocks carry in the major indexes, if big tech names remain under pressure today, that will likely be a drag on the broader market.