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Have Things Improved This Much?

What’s in Today’s Report:

  • Have Things Improved This Much?
  • Weekly Market Preview:  Focus Shifts to Earnings
  • Weekly Economic Cheat Sheet:  How Bad Is The Economy? (We Get Important Updates This Week)

Futures are modestly lower following a generally quiet weekend as markets digest last week’s big rally.

OPEC+ agreed to cut global oil output by 9.7 mln barrels/day, slightly below to 10 mln barrel/day estimate.  That will improve the supply/demand imbalance, but it won’t spark a big rally in oil (it’ll take a sooner than expected reopening of the global economy to do that).  For stocks, this is a mild positive as oil probably won’t make new lows going forward.

Coronavirus trends continued to improve over the weekend as it becomes more clear virus growth has peaked, although that’s already priced into stocks at these levels.

Today there are no economic reports or Fed speak, and most of Europe is closed, so any coronavirus updates will likely drive trading.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on March 5, 2020

OPEC’s recommendation for the 1.5 million barrel per day cut was “a bullish surprise versus expectations on the surface, however, Russia was not willing to participate in the…” which total 500,000 barrel per day, said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on March 4, 2020

The EIA, however, also reported that domestic production edged up to a fresh all-time high of 13.1 million barrels a day and “exports from the U.S. climbed to their second highest level on record, suggesting that the U.S…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Oil Rig

Tyler Richey, co-editor at Sevens Report Research Quoted in MarketWatch on February 10, 2020

“Energy traders are focused on the coronavirus right now, trying to gauge how it has, and will, affect demand in China, supply internationally, and ultimately how OPEC+ will adjust…” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

China flag

Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • Why Have Stocks Rallied?

Global equities rallied overnight and stock futures are trading higher today after China reduced tariffs on $75B worth of U.S. goods, spurring optimism for a “phase two” trade deal and further easing concerns about the coronavirus outbreak’s impact on the global economy.

Outside of trade news, OPEC+ has agreed to cut their collective oil output target by 600K b/d to help support oil prices which crashed into a bear market this week on Wuhan coronavirus fears.

Today, there are two economic reports to watch: Jobless Claims (E: 215K) and Productivity and Costs (E: 1.5%, 1.2%) while two Fed officials will speak: Kaplan (9:15 a.m. ET) and Quarles (7:15 p.m. ET).

Additionally, there are a few earnings releases due out including: TWTR ($0.28), BMY ($0.88) and UBER (-$0.68), however given the latest trade-war news, the markets will remain largely focused on China’s decision to cut tariffs and any new developments regarding the coronavirus outbreak.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on December 5, 2019

Even so, “deeper production cuts were not the consensus expectation coming into this week’s OPEC+ meeting (only an extension of current policy) and if they are formally agreed upon tomorrow, that will be an incremental positive for the market in the near to medium term,” said Tyler Richey, co-editor at Sevens Report Research. Then “we could see WTI futures breakout…” Click here to read the full article.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on December 2, 2019

“Trade war headlines have been the main driver of the energy markets, but since late last week, OPEC+ policy expectations, economic data, and inventory/production releases have…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Oil Rig

Jobs Day

What’s in Today’s Report:

  • Trade Update – What’s the Latest?
  • Key Levels to Watch in the Dollar and 10 Year Yield
  • OPEC Update – Positive or Negative for Oil?

Futures are modestly higher again as markets ignore more soft economic data and instead focus on incrementally positive U.S./China trade headlines.

China reduced import tariffs on U.S. soybeans and pork and that’s being interpreted as a mild positive in the negotiations, and that’s the reason futures are higher.

Economic data again disappointed as Japanese Household Spending and German IP (-1.7% vs. (E) 0.2%) both missed.

Today the key event on the calendar is the jobs report, (E: Jobs: 180K, UE Rate: 3.6%, Wages: 0.3%) and again the stronger the number, the better.  We also get Consumer Sentiment (E: 96.8) this morning, and given the focus on consumer spending, that number is more important than usual.  Like the jobs report, the stronger the number, the better for stocks.

Finally, regarding trade, Larry Kudlow will speak on CNBC at 9:30 so we’ll likely get another non-specific, yet positive, update on the U.S./China trade “mood music,” so don’t be surprised if you see a temporary pop in stocks right at the open.

Why Have Stocks Dipped?

What’s in Today’s Report:

  • Bottom Line: Why Have Stocks Dipped?
  • OPEC Meeting Preview

S&P futures were tentatively higher overnight amid mostly quiet news flows until another trade war “tape bomb” triggered rapid risk-off money flows over the last hour.

Speaking in London before this week’s NATO meeting, President Trump said that he “had no deadline” for a trade deal with China and he thought it might be “better to wait until after the election” to make a deal.

The comments lower the odds that a “phase one” deal is agreed upon before the Dec. 15 tariffs are due to go into effect.

In the wake of Trump’s comments this morning, focus will remain almost exclusively on the trade war and any further comments by the U.S. or reaction by China will move markets.

As far as the calendar goes, there is one economic report to watch: Motor Vehicle Sales (E: 17.0M) and there are no Fed officials scheduled to speak today.

Tyler Richey Quoted in MarketWatch on June 9, 2019

“Geopolitics, and more specifically the threat of more military activity between the U.S. and Iran, is one of the only remaining bullish factors supporting the…” said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.

Oil Rig