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Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Oil Market Update and EIA Analysis

Futures are slightly lower following a mostly quiet night of news as the world awaits the results of the latest peace talks today between Russia and Ukraine.

Russia continued its bombardment of Ukraine’s cities while another round of peace talks will occur today.

Economic data was slightly underwhelming as Chinese, UK, and EU February composite PMIs slightly missed estimates.

Today’s focus will be on the Ukraine/Russia peace talks and if a cease-fire is agreed to, that will cause another knee-jerk rally in stocks.

Beyond geopolitics, we also get several important economic reports today.  The key report is the ISM Services PMI (E: 60.9), and markets will want to see stability in those numbers.  We also get Jobless Claims (E: 232K) and Unit Labor Costs (E: 0.3%).  The later is a notable inflation indicator and if it’s “hot” that could weigh slightly on stocks.

Finally, we get the second half of Powell’s testimony (10:00 a.m. ET), although we likely won’t get any surprises.   Barkin (12:00 p.m. ET) and Williams (6:00 p.m. ET) also speak today but shouldn’t move markets.

Why We Could See a Short Term Rally (But We Wouldn’t Chase It)

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What’s in Today’s Report:

  • Why We Could See a Short-Term Rally
  • What the FOMC Minutes Meant for Markets (Not as Hawkish as Feared, But Not Dovish, Either)
  • EIA and Oil Market Update

Futures are modestly weaker as negative headlines on Russia/Ukraine weighed on sentiment.

Russia accused Ukraine of attacking Russian-back separatists in the Dontesk region of Ukraine, and analysts fear this could be the pretext for a larger military conflict if Russia moves to annex Dontesk, (this would be a replay of what happened with Crimea in 2014).

Russia/Ukraine headlines are driving short term trading and that will remain the case today, with any headlines implying diplomacy causing a rally, and any headlines implying conflict causing a sell off.

Beyond geopolitics, however, we get several pieces of economic data, including Jobless Claims (E: 224K), Housing Starts (E: 1.708M) and the Philadelphia Fed Manufacturing Index (E: 19.7) and as has been the case the market will be looking for stability in the data.

Finally, we also get two Fed speakers, Bullard (again) at 11:00 a.m. ET and Mester at 5:00 p.m. ET.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • Why Surging EU HICP Matters to Us
  • EIA Analysis and Oil Market Update

Futures are sharply lower following a big earnings miss by Facebook (FB was down 20% after hours).

FB posted disappointing margins and guidance and the steep decline in the stock is pulling futures lower.

EU and UK Composite PMIs were mixed as the EU reading slightly missed while the UK PMI beat estimates, although neither number is moving markets.

Today will be a busy day.  First, we get two central bank announcements (BOE at 7:00 a.m. and ECB at 7:45 a.m.).  The BOE is expected to hike rates 25 basis points and while there’s no change expected to ECB policy if Lagarde is hawkish at her press conference that will add to the earnings-inspired declines.

We also get some notable economic data, including the ISM Services PMI (E: 59.9), Jobless Claims (E: 250K), and Productivity and Costs (E: 2.4%, 1.7%) and as has been the case, markets will crave stability to ward off stagflation fears.

Finally, on the earnings front, AMZN ($3.88) after the close is the big report today.  Of the super cap tech stocks, we’re had some good reports (AAPL/MSFT/GOOGL) and some bad reports (NFLX/FB), and markets need AMZN to land in the former.  Beyond AMZN, some other reports we’ll be watching include: MRK ($1.52), LLY ($2.51), COP ($2.20), HON ($2.08),  SNAP ($0.10), and F ($0.43).

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

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Natural-gas futures jump by more than 46%; oil settles lower

The 219 billion-cubic-foot weekly fall in U.S. supplies of the fuel reported by the Energy Information Administration Thursday leaves stockpiles more than 10% below last year’s levels…said 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.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on January 10, 2022

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Oil ends lower as traders weigh supply disruptions and omicron’s threat to energy demand

Supply concerns continue to linger after production and pipeline outages overseas buoyed prices last week…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

 

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on January 10, 2022

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Oil prices settle lower as traders weigh risks to supply and demand

The various conflicts and threats across eastern Europe and the Middle East will remain supportive for energy in the near term, but it already appears that some of the supply and production disruptions are being…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

 

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on January 10, 2022

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Oil prices settle lower as traders weigh risks to supply and demand

The various conflicts and threats across eastern Europe and the Middle East will remain supportive for energy in the near term, but it already appears that some of the supply and production…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on January 10, 2022

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Oil ends lower as traders weigh supply disruptions and omicron’s threat to energy demand

supply concerns continue to linger after production and pipeline outages overseas buoyed prices last week…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

 

Why Did Treasury Yields Surge Yesterday?

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What’s in Today’s Report:

  • Why Did Treasury Yields Surge Yesterday?
  • Oil Update – OPEC+ Meeting Preview

Stock futures are trading at record highs as investors shrug off surging COVID cases and digest upbeat economic data.

New COVID cases topped 1 million in the U.S. Monday, nearly doubling the previous record, however, hospitalizations and deaths remain low, keeping economic lockdown odds minimal as the Omicron outbreak is increasingly expected to burn itself out in the coming weeks.

China’s Manufacturing PMI rose to 50.9 vs. (E) 50.0 in December further easing global growth concerns.

Today, there are two economic reports to watch: ISM Manufacturing Index (E: 60.5) and JOLTS (E: 11.060M). Investors will be looking for more good data, but not so good that rate hike expectations are brought forward.

There are no Fed speakers today. The January OPEC+ policy meeting will be underway soon (E: +400K b/d production hike in February) and if the group of oil producers disappoint the market, expect a potential spike in volatility that could spill over into both equity and bond markets.