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Valuation Update (Better, But Not Good)

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What’s in Today’s Report:

  • Equity Risk Premium Update – Better, But Not Good
  • Updated Oil Outlook

Futures are marginally weaker following a quiet night as markets as markets further digest the 2019 rally.

Economic data was sparse although Euro Zone Core HICP (their CPI) met expectations at 1.0%, which remains near multi-month lows.

Today focus will remain on earning and we get some notable consumer companies reporting (in addition to more banks).  Some reports we’ll be watching include:  MS ($0.90), PPG ($1.10), NFLX ($0.25),and AXP ($1.79).  As has been the case so far in earnings season, the commentary on the economy will be just as important as the actual results.

We also get two notable economic reports, including Jobless Claims (E: 216K) and the Philadelphia Fed Business Outlook Survey (E: 10.0) plus one Fed speaker: Quarles (10:45 p.m. ET). Bottom line, if earnings continue to beat low expectations, stocks can grind higher for now.

Tyler Richey appeared on TD Ameritrade Network on January 15, 2019.

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Tyler Richey appeared on TD Ameritrade Network on January 15, 2019. Watch the entire clip here

Sevens Report’s Tyler Richey quoted in MarketWatch on January 3, 2019

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Sevens Report’s Tyler Richey quoted in MarketWatch on January 3, 2019. Read the full article here.

Sevens Report’s Co-Editor Tyler Richey appeared on TD Ameritrade on December 4, 2018.

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Sevens Report’s Co-Editor & Commodities Analyst Tyler Richey appeared on TD Ameritrade on December 4, 2018. Watch the entire clip here.

Sevens Report’s Tom Essaye appeared in Yahoo Finance on November 23, 2018

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Sevens Report’s Tom Essaye appeared in Yahoo Finance on November 23, 2018. His take on oil, market volatility, stocks and more. Watch the entire clip here.

Technical Update

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What’s in Today’s Report:

  • Technical Update
  • Economic Data Recap
  • EIA Analysis and Oil Update

US futures are down roughly 0.5% this morning thanks to soft earnings after the close yesterday, most notably by NVDA (the company’s shares fell nearly 20% overnight). Otherwise it was a relatively quiet night of news.

Oil is up over 1% this morning on optimism surrounding a potential OPEC-cut, but serious technical damage has been done on the charts this week, and right now, the medium term outlook is neutral at best for energy.

Economically, the only data point released overnight was Eurozone HICP which matched estimates at 2.2% y/y and is not materially affecting the euro or longer term outlook for the ECB.

Today, there is one important economic report to watch: Industrial Production (E: 0.2%) and two Fed speakers: Clarida before the open (8:30 a.m. ET) and Evans just before lunch (11:30 a.m. ET).

Otherwise, focus will be on tech shares today as if the bad earnings from NVDA weigh on the sector more broadly, then stocks will have a hard time extending yesterday’s bounce.

On the charts, yesterday’s close of 2730 in the S&P is an important level to watch as a close above would be a positive development for the near term technical outlook.

Inflation Peaking?

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What’s in Today’s Report:

  • Is Inflation Peaking Already?

Futures are flat while overseas markets were mostly lower o/n after yesterday’s huge drop in oil weighed on risk sentiment, global data was mixed, and EU political tensions continued.

Chinese FAI and Industrial Production figures for October were slightly ahead of expectations but Retail Sales notably missed which pressured Asian shares overnight.

In Europe, the German GDP flash missed which only added to ongoing angst over Brexit and the Italian budget drama in broader European markets.

Today is the busiest day of the week as far as catalysts go. First we will get the latest inflation release in the U.S. ahead of the open: CPI (E: 0.3%), then Quarles speaks shortly thereafter (9:00 a.m. ET).

There is nothing major scheduled during market hours today but focus this evening will be on CSCO earnings ($0.72) after the close and then Powell and Kaplan are speaking in Texas at 5:00 p.m. ET (with Q&A) where Powell is expected to take a more dovish tone.

Sevens Report’s Tyler Richey quoted in Wall Street Journal on November 13, 2018

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Sevens Report’s Tyler Richey quoted in Wall Street Journal on November 13, 2018. Read the full article here.

Sevens Report’s Tyler Richey quoted in Wall Street Journal on November 1, 2018

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Sevens Report’s Tyler Richey quoted in Wall Street Journal on November 1, 2018. Read the full article here.

U.S. oil drops nearly 3% – Tyler Richey’s Take on Market Watch, October 4, 2018

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U.S. oil drops nearly 3% on domestic stockpile surge, talk of efforts to raise output

“Fundamental dynamics have shifted in favor of the bears this week with a huge build in commercial crude oil stocks and news that Saudi Arabia and Russia made a private agreement weeks ago to increase output to help offset the declining exports from Iran,” said Tyler Richey, co-editor of the Sevens Report.

To read the entire Market Watch article Go here