Posts

The State of Inflation (CPI Preview and Inflation Expectations Update)

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What’s in Today’s Report:

  • The State of Inflation:  CPI Preview and Inflation Expectations Update
  • EIA Data and Oil Market Analysis (How High Can The Rally Go?)

Futures are modestly higher as markets bounce back from Wednesday’s declines following mixed news from China.

Positively, Chinese authorities may allow ANT Group to IPO, which is another sign China is easing pressure on tech companies. Additionally, Chinese exports handily beat estimates (16.9% vs. (E) 8.0%).

Negatively, Shanghai and Beijing reimposed some COVID restrictions, showing “Zero COVID” remains in effect.

Today focus will be on the ECB Rate Decision, and while no rate hike is expected, President Lagarde is expected to hint that a rate hike is coming in July and another rate hike is coming later this year (if it’s more hawkish than that, that will be a headwind on global stocks).  We also get Jobless Claims (E: 210K) but that shouldn’t move markets.

What to Make of Yesterday’s Drop & Jobs Report Preview

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What’s in Today’s Report:

  • What to Make of Yesterday’s Drop
  • Jobs Report Preview
  • Natural Gas Update

Futures are slightly lower as markets digest the whiplash of the past two trading days following a mostly quiet night.

German economic data again badly missed estimates as German Industrial Production fell –3.9% vs. (E) -1.0% and fears of outright stagflation in the EU are rising quickly.

Today focus will be on the Jobs Report and estimates are as follows:  Job Adds: 400K, UE Rate: 3.6%, Wages: 0.4% m/m, 5.5% y/y.  This market needs a “Goldilocks” report that’s subdued on wages and with job adds modestly below the estimate of 400k.  If markets get that Goldilocks jobs report it should help stocks stabilize.  If the report ends up “Too Hot” though, especially on wages, brace for more selling.

There are also numerous Fed speakers today including: Williams (9:15 a.m. ET), Kashkari (11:00 a.m. ET), Bostic (3:20 p.m. ET), Waller and Bullard (7:15 p.m. ET) and Daly (8:00 p.m. ET).  Don’t be surprised if they all sound more hawkish than Powell did on Wednesday.  Remember, it appears the Fed’s tactic is to “Talk Tough” on looming rate hikes and inflation, yet be more measured on actual rate hikes than rhetoric would suggest.  Regardless, if there’s a consistent chorus of hawkish commentary, that will likely weigh on stocks, at least partially.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on April 18th, 2022

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Natural-gas prices mark another finish at a nearly 14-year high, while oil prices climb

Unseasonably cold temperatures are driving elevated spring heating demand in the U.S. amid an already bullish fundamental backdrop of subdued inventory levels and no real signs of rising production in the near to medium term…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Analysts Quoted in ETF Trends on April 18th, 2022

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Natural Gas ETF Surges as Tight Supplies Push Prices to 14-Year High

Additionally, a geopolitical fear bid remains in the market and demand is expected to remain elevated leaving the path of least resistance decidedly higher with a medium-term upside target of $9.06…analysts at Sevens Report Research said in Monday’s newsletter, MarketWatch reports. Click here to read the full article.

Sevens Report Analysts Quoted in Report Door on April 18th, 2022

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Natural-gas prices continue to trade at a nearly 14-year high, while oil prices climb

U.S. natural-gas supplies are tight, sitting 23.9% below where they were last year and 17.8% below the five-year average…analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.

Earnings In Focus

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What’s in Today’s Report:

  • Bottom Line – Earnings In Focus
  • Natural Gas Update

Stock futures are trading lower after another quiet night of news as bond yields hit new multi-year highs overnight while investors look ahead to a fresh set of earnings reports today.

The 10-year Treasury Note yield notably tested 2.90% overnight following hawkish commentary from the Fed’s Bullard, who mentioned the possibility of a 75 basis point hike late yesterday.

Looking into today’s session, there is just one economic report to watch: Housing Starts and Permits (E: 1.75M, 1.83M) but it is not likely to move markets. Then there is one Fed speaker mid-day: Evans (12:05 p.m. ET).

Finally, earnings season continues to pick up today with JNJ ($0.34), LMT ($6.22), TRV ($3.70), and CFG ($0.96) reporting before the open and NFLX ($2.92) and IBM ($1.34) due to report after the closing bell.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on April 15th, 2022

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U.S. natural gas is trading at an ‘insane’ price — Here’s why it just hit a nearly 14-year high

The catalyst behind this week’s rally in natural gas has been a “late season blast of cold weather making its way across the country,” boosting demand for heating in many parts of the nation… said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

What’s Driving Stocks

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What’s in Today’s Report:

  • What’s Driving Stocks
  • Natural Gas Update (New Highs Ahead?)

Futures are slightly higher following a generally quiet night of news as oil declined modestly and there was no further escalation in the Russia/Ukraine war.

Economic data disappointed overnight as UK Retail Sales missed estimates (-.3% vs. (E) 0.7%), while German IFO Business Expectations plunged to 85.1 vs. (E) 92.4, reflecting uncertainty related to the Russia/Ukraine war.

Today’s focus will be on the Consumer Sentiment Report (E: 59.7) and specifically the Inflation Expectations index, and if five-year inflation expectations move meaningfully above 3%, that will put a headwind on stocks.   Pending Home Sales (E: 0.9%) is the other notable report today, but it shouldn’t move markets.

From the Fed we have multiple speakers, including Williams (10:00 a.m. ET), Daly (11:00 a.m. ET), Barkin (11:30 a.m. ET) and Waller (12:00 p.m. ET) but as long as they stick to the current “script” of being open to a 50 bps hike at the May meeting (but not calling for even more) then they shouldn’t move markets.

Sevens Report Co-Editor Tyler Richey Quoted by MarketWatch on January 27, 2022

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Why natural-gas futures logged their biggest one-day percent gain on record

Physical demand is so high with this looming storm in the Northeast that the February futures contract got piled into for those looking to reload stockpiles they expect to offload…explained Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

 

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on January 21, 2022

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Oil prices finish lower, but tally a 5th straight weekly gain

A surge in risk-off money flows in the back half of the week have caused oil futures to give back the bulk of this week’s gains…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.