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Are Corporate Earnings Rolling Over?

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What’s in Today’s Report:

  • Are Corporate Earnings Rolling Over?
  • Another (Small) Sign of Dis-Inflation
  • EIA Update and Oil Market Analysis

Futures are modestly lower as investors digest Wednesday’s earnings disappointments.

CSCO and NVDA reported after the close and both results were better than feared, but that’s not enough to offset growing concerns about future corporate earnings.

On inflation, October EU HICP slightly missed estimates  (10.6% vs. (E) 10.7%) although the monthly reading was in-line at 1.5%, signaling that inflation pressures in the EU aren’t declining.

Today’s focus will again be on inflation so the price indices in the Philly Fed Manufacturing Index (E: -7.0) will be the key reports and any declines in those price indices should prompt at least a small rally.  Outside of Philly Fed, we also get Housing Starts (E: 1.41M) and Jobless Claims (E: 222k), but neither should move markets.

There are also multiple Fed speakers today including Bostic (7:30 a.m. ET), Bowman (9:15 a.m. ET), Mester (9:40 a.m. ET), and Kashkari (10:40 a.m. ET & 1:45 p.m. ET), and we should expect their message to be consistent with recent Fed speak:  The size of rate hikes will shrink, but the Fed still has a long way to go to reach the “Terminal Rate.”

Sevens Report Analysts Quoted in ZeroHedge on November 8th, 2022

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WTI Extends Losses After API Reports Large Unexpected Crude Build

“The lack of a concrete timeline or any real details about plans to reopen the Chinese economy and move away from the still very strict and economically crippling restrictions weighed on the energy market into the afternoon,” wrote analysts at Sevens Report Research. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on November 8th, 2022

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Oil prices log back-to-back losses as investors assess China demand outlook

“The lack of a concrete timeline or any real details about plans to reopen the Chinese economy and move away from the still very strict and economically crippling restrictions weighed on the energy market into the afternoon,” wrote analysts at Sevens Report Research. Click here to read the full article.

What the Fed Decision Means for Markets (Not a Bearish Gamechanger)

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What’s in Today’s Report:

  • What the Fed Decision Means for Markets (Not a Bearish Gamechanger)
  • EIA Analysis and Oil Update

Futures are lower on underwhelming earnings and further digestions of Powell’s hawkish press conference.

Earnings results have turned more negative this week and that included last night as ATUS and CF both posted disappointing results (among others).

Today’s focus will be on the Bank of England Rate Decision (E: 75 bps hike) and economic data, as we get Jobless Claims (E: 222K), Unit Labor Costs (E: 4.0%) and the ISM Services Index (E: 55.4).  Especially in light of Powell’s comments, markets will want to see data that shows resilient economic activity and falling inflation/deteriorating labor markets.

On the earnings front, the season largely wraps up at the end of the week but there are still some important reports to watch today including:  COP ($3.41), RCL ($0.23), MAR ($1.69), PYPL ($0.96) and SBUX ($0.73).

FOMC Meeting Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Chart: 3,900 Is a Key Level For the S&P 500

U.S. futures and global stocks are rallying today amid reports that China is forming a “reopening committee” as part of a new push to ease Covid restrictions (however China’s foreign ministry has denied the rumors).

The RBA raised rates by 25 bp overnight, meeting estimates while the U.K.’s Manufacturing PMI was slightly better than feared at 46.2 vs. (E) 45.8.

Today, the focus will be on economic data early with the ISM Manufacturing Index (E: 50.0) and JOLTS (E: 9.875M) both due out shortly after the opening bell. But market reactions to the data are likely to be limited as the November FOMC meeting gets underway.

Earnings will remain in focus today with UBER (-$0.17), PFE ($1.47), BP ($1.94), and SYY ($0.99) reporting ahead of the bell, while AMD ($0.55) and ABNB ($1.46) will release results after the bell.

Bottom line, the combination of mostly favorable market news flow this morning, the calendar, and trader positioning into the Fed are all contributing to this morning’s pre-market gains, however, “Fed paralysis” is likely to set in today and into tomorrow’s morning session as investors await the latest Fed decision.

Sevens Report Analysts Quoted in Zero Hedge on October 25th, 2022

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WTI Holds Gains Despite API Reporting Unexpectedly Large Crude Build

The Sevens Report Research analysts said oil’s new trading range spans “between support in the upper $70s and resistance in the low $90s, as traders assess the outlook for demand amid growing recession concerns but still-tight global supply dynamics.” Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on October 25th, 2022

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Oil prices finish higher with supply concerns back in focus

“The negative China headlines and soft U.S. economic data were demand-side negatives for oil. However, hopes for peak-hawkishness bolstered risk assets” analysts at Sevens Report Research wrote in a Tuesday newsletter. Click here to read the full article.

Is a Dovish Hike the Same as a Fed Pivot? No.

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What’s in Today’s Report:

  • Is a Dovish Hike the same as a Fed Pivot?  No.  Here’s Why.
  • EIA Update and Oil Analysis

Futures are little changed as rising hope of smaller than expected future rate hikes is being offset by ugly tech earnings.

Meta (FB) missed earnings and posted underwhelming guidance and the stock fell nearly 20% after hours, continuing this week’s trend of disappointing tech earnings.

Today will be a busy day of earnings and economic data.  The most important events of the day will come after the close via the AAPL ($1.26), AMZN ($0.22), INTC ($0.34) earnings, and given the disappointing tech earnings so far this week, the market will need solid numbers today.

Outside of those earnings, other key events today include the ECB Rate Decision (E: 75 bps hike), Durable Goods Orders (E: 0.6%), Jobless Claims (E: 223K) and Preliminary Q3 GDP (E: 2.3%) and the market will be looking for “just right” outcomes from each (an ECB that’s not too hawkish, and U.S. economic data that’s not too good or not too bad).

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on October 21st, 2022

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Oil ends higher; natural gas prices post a weekly loss of more than 20%

“The Biden administration introduced an ‘SPR put’ to the oil market this week when they announced purchasing crude to replenish reserves when prices dip towards $70 a barrel,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Economic Breaker Panel

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What’s in Today’s Report:

  • Economic Breaker Panel (October Edition)
  • Oil Update and EIA Analysis

Futures are slightly lower following a night of mixed earnings results and yet another firm inflation report.

TSLA missed on revenue and production targets and the stock fell –5% after hours, although overall earnings reports were more mixed than negative overnight.

German PPI was the latest global inflation indicator to run hotter than estimates (2.3% vs. (E) 1.5%) reinforcing that global inflation is proving “sticky.”

Today’s focus will be on economic data and the key reports are (in order of importance): Philly Fed (-5.0), Jobless Claims (E: 235K), and Existing Home Sales (E: 4.695M).  If we can see a moderation in the data (especially in the price indices in Philly Fed) then stocks can rally.  We also get numerous Fed speakers including: Harker (12:00 p.m. ET), Jefferson (1:30 p.m. ET), Cook (1:45 p.m. ET), and Bowman (2:05 p.m. ET) but none of them should move markets.

Finally, earnings season rolls on although the critically important results really increase next week.  Some reports we’re watching today include:  AAL ($0.54), SNAP ($0.00), and WHR ($5.59).