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A U.S.-China Tech War Too?

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What’s in Today’s Report:

  • Why the Trade War is Becoming a Tech War (And That’s Bad)
  • Brexit Update – Is a “No Deal” Brexit A Possibility (Yes)
  • EIA and Oil Update – Bearish Supply News

It’s an ugly morning as futures are down about one percent as markets digest disappointment from the week’s two big events, the FOMC Minutes and the global flash PMIs.

EU flash PMIs missed estimates at 51.6 vs. (E) 51.7 but EU and German manufacturing PMIs were especially weak (47.7 & 44.3) and that’s negative for global growth.

Yesterday’s FOMC Minutes were slightly hawkish and confirmed the Fed isn’t close to a rate cut right now.

Given the soft foreign data, the key report today is the flash Composite PMI (E: 52.4).  If that number is soft, it’ll further stoke worries about global growth and will be a negative for stocks.  Other reports today include Jobless Claims (E: 215K) and New Home Sales (E: 680K).

Bottom line, this market is facing several headwinds and support at 2800 is now important, but should likely hold unless hopes for a Trump/Xi meeting at the G-20 meeting are dashed, or U.S. growth begins to roll over.

Tyler Richey Quoted in Bloomberg on May 20, 2019

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Tyler Richey was quoted in Bloomberg on May 20, 2019. “You’ve got some conflicting influences on the market and the price action today is pretty indicative of that…” Click here to read the full article.

Tyler Richey

Tyler Richey, co-editor of the Sevens Report Quoted in MarketWatch on May 6, 2019

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Tyler Richey, co-editor of the Sevens Report said “As the developments have been digested today, the flurry of Trump tweets are being seen more as a negotiating tactic that has the potential to…” Click here to read the full MarketWatch article.

the base for Saudi Aramco's Natural Gas Liquids plant and oil production

Tom Essaye Quoted in Financial Times on May 1, 2019

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Tom Essaye, founder of The Sevens Report, said a modest but noticeable 539,000-barrel draw from the Strategic Petroleum Reserve — just the second time the US has tapped its SPR this year…Click here to read the full article.

Tyler Richey Quoted in Bloomberg on April 22, 2019

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“It’s been made clear that Trump is very serious about enforcement of the sanctions,” said said Tyler Richey, co-editor at Sevens Report Research in Palm Beach Gardens, Florida. “The question is how much will their exports fall versus how much and how quickly can Saudi Arabia and other…Click here to read the full article.

Tyler Richey Quoted in Bloomberg on on April 12, 2019

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“There’s not many people who are willing to short this market. We could be near a market top…” Tyler Richey quoted in Bloomberg. Click here to read the full article.

Tyler Richey

Time to Buy Puts?

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What’s in Today’s Report:

  • Time to Buy Puts?
  • Weekly Market Preview (All About Earnings)
  • Weekly Market Cheat Sheet (GDP Friday is the Key Report)

Futures are modestly lower thanks to higher oil and new concerns about the longevity of Chinese economic stimulus.

The South China Morning Post released an article saying Chinese officials will again focus on structural economic reforms, which means limited future economic stimulus.

Oil is 2% higher following reports the Trump administration will not renew any Iranian import wavers.

Today there is only one economic report, Existing Home Sales (E: 5.30M), and that won’t move markets.

So, the key to trading today will be earnings, and here are the reports we’re watching:  HAL ($0.23), KMB ($1.54), WHR ($3.04).

Is Healthcare A Buy? (It’s Negative YTD)

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What’s in Today’s Report:

  • Why Stocks Faded At the Open Yesterday (For the Second Straight Day)
  • Is Healthcare a Buy? (XLV is lagging the S&P 500 by 16% YTD)
  • Oil and Energy Update

Futures are slightly lower following a night of mixed economic data.

EU flash composite PMIs missed estimates (51.3 vs. (E) 51.8) and that’s a disappointment given recent stabilization in China.  But, not all the data was bad as UK Retail Sales rose 1.1% vs. (E) 0.2%, likely on Britons stocking up goods ahead of the hard Brexit deadline in late March.

Today is the eve of a three day weekend but it’s going to be busy as we get a lot of economic data and important earnings.

Important data today includes (in order of importance):  PMI Composite Flash (E: 54.3), Retail Sales (E: 0.8%), Philly Fed  (E: 10.2) and Jobless Claims (E: 206K).  As we said in Monday’s report, the stronger the data, the better for stocks as there is no inflation threat right now (so good data won’t make the Fed hawkish).

On the earnings front, some releases we’ll be watching include:  AXP ($2.00), PM ($1.00), SLB ($0.30) and HON ($1.83).

Tyler Richey of Sevens Report was Quoted in The Wall Street Journal on March 3, 2019

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Tyler Richey, co-editor at Sevens Report in Palm Beach Gardens, Fla., said President Trump’s Twitter post last week saying oil prices were “getting too high,” and telling OPEC not to reduce production too much, will continue to work as a bearish counterweight to OPEC. “Trump’s tweet targeting OPEC+ policies from last week is still simmering…” Click here to read the full article.

 

 

 

Tyler Richey, co-editor of Sevens Report Quoted in MarketWatch

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Tyler Richey, co-editor of Sevens Report Quoted in MarketWatch on February 4, 2019.

“There have been a lot of shifting pieces in the oil market to start 2019 as a dovish [Federal Reserve], and subsequently weaker dollar, sanctions on Venezuela, and…” Read the full article here.