Tom Essaye quoted in CNBC on February 4, 2019.
“Part of the reason that the market reacted so positively to the earnings is because expectations had fallen into this earnings season. From a sentiment perspective, it was definitely better than…” Read the full article here.
What’s in Today’s Report:
Futures are flat following a very quiet weekend of no incremental news (the weekend news flow was similar to the scoring in the first half of the super bowl).
The only notable economic report was Chinese Service PMI which met expectations at 53.6 vs. (E) 53.9. But, the composite PMI still dropped to 50.9 vs. the previous 52.2 so there are still legitimate reasons to worry about Chinese, and global, economic growth.
Today there are no notable economic reports and the only notable earnings report comes after the close (GOOGL ($11.08)) so I’d expect a generally quiet trading day as investors digest the recent rally/news.
Tyler Richey, co-editor of the Sevens Report Quoted in MarketWatch on January 25, 2019. His take on this market, natural gas, volatility and more. Read the full article here.
Tom Essaye Quoted in Barrons on January 23, 2019. His take on this unpredictable market. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher thanks to a dovish Fed article in the WSJ and more solid earnings (SBUX).
The WSJ reported that Fed officials are considering ending their balance sheet reduction earlier than expected, and that’s helped lift futures.
Economic data underwhelmed again as the German IFO Business Expectations Survey declined to 94.2 vs. (E) 97.0.
Today there are no economic reports (Durable Goods & New Home Sales won’t be produced because of the shutdown) and the earnings calendar is relatively quiet (ABBV ($1.92) and CL ($0.73) are two names we’re watching), so focus will likely remain on political headlines as there finally appears to be hints of progress at resolving this government shutdown (although the solution may only last three weeks). If we get any positive news on the shutdown, that’ll likely add to the early rally.
What’s in Today’s Report:
Futures are slightly higher as momentum from yesterday’s positive earnings offset more disappointing economic data.
January flash PMIs in Japan and the EU were disappointing. The Japanese manufacturing PMI fell to 50.0 vs. (E) 52.4 while the EU Composite PMI dropped to 50.7 vs. (E) 51.4. But, markets haven’t traded off Japanese data in over a year, and the “Yellow Vest” disruptions are weighing on French PMIs, which dragged the composite EU PMI lower, so these disappointing numbers aren’t weighing on markets as much as they normally would.
Today the big number is the U.S. Flash Composite PMI (E: 54.2), as markets are looking for more signs of economic stabilization following the loss of momentum in December. Anything that implies stabilization will be stock positive.
We also have an ECB Rate Decision (E: No Change to Rates) and the ECB Press Conference (8:30 a.m. ET) and the key will be whether ECB President Draghi is very dovish given more disappointing economic data (he’s not expected to be materially dovish).
Finally, earnings continue and generally the season, so far, has been better than expected. Some results we’re watching today include: INTC ($1.22), NSC ($2.30), SBUX ($0.65), WDC ($1.50).
What’s in Today’s Report:
Futures are moderately higher thanks to rising U.S./China trade optimism.
Yesterday’s WSJ article that stated U.S. officials are considering reducing China tariffs spurred a global rally, despite being disputed by administration officials.
Economic data was mildly disappointing as Japanese CPI (0.7% vs. (E) 0.8%) and UK Retail Sales (-0.9% vs. (E) -0.8%) both slightly missed estimates, although neither report is moving markets.
Today there are several earnings reports but none of the companies reporting should move the market unless the results are truly horrid.
Economically, Industrial Production (E: 0.3%) is the key report as we want to see if “hard” manufacturing activity dropped as much as the manufacturing surveys in December. We also get an update on Consumer Sentiment (E: 97.0) and one Fed speaker, Williams (9:05 a.m. ET), who could help markets rally if he talks more about flexibility on balance sheet reduction.
What’s in Today’s Report:
Futures are sharply lower following more disappointing global economic data.
Chinese exports badly missed expectations falling –4.4% vs. (E) 4.8%, further stoking fears of a Chinese economic slowdown. Data in Europe wasn’t much better, as Euro Zone Industrial Production fell –1.7% vs. (E) 0.5%.
Geopolitically, it was a generally quiet weekend as markets are looking past Trump’s economic threat to Turkey.
There are no notable economic reports today so focus will be on earnings, as the Q4 season officially kicks off with C ($1.55). The key for this report (and all reports this season) will be the guidance and management commentary – and anything that downplays a slowing global economy will be welcomed by markets.
Tom Eassye was quote in MarketWatch on January 10, 2019. Read the full article here.
What’s in Today’s Report:
Futures are slightly lower despite generally good news overnight, as markets continue to digest the recent rally.
The U.S. & China announced the next round of trade talks will occur Jan 30/31 in Washington, which is a mild positive (although it was largely expected and mostly priced in).
Economically, data was mixed Japanese Household Spending rose 1.1% vs. (E) 0.2%, while UK Industrial Production dropped –0.3% vs. (E) 0.4%.
Today is all about the CPI report (E: -0.1% m/m, 1.9% y/y). Both the headline and core need to stay around 2.0% yoy for this “dovish” Fed narrative to continue to grow, as a hot CPI report could undo some of the rally markets have enjoyed since last Friday.
