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The Most Important Central Banker This Week (Not Powell)

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What’s in Today’s Report:

  • The Most Important Central Banker This Week (Not Powell)

Futures are slightly higher on better than feared tech earnings and more global central bank rate cuts.

Palo Alto Networks (PANW) posted solid guidance and that, along with CSCO results last week, is helping to bolster the outlook for tech and that’s supporting futures.

Sweden’s Riksbank (their central bank) cut rates 25 bps, as expected, and that reminded investors we are in the midst of a global rate cutting campaign (which is a positive).

There are no notable economic reports today but there are two Feds speakers, Bostic (1:35 p.m. ET) and Barr (2:45 p.m. ET) and if they join other colleagues in expressing openness to cutting rates in September, it should be a mild tailwind for stocks.

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CPI Preview: Good, Bad, Ugly

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CPI Preview: Good, Bad, Ugly: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, Ugly
  • Chart: 10-Yr Yield Falls to 52-Week Lows

Futures are flat this morning while overseas markets were mixed overnight with Europe underperforming amid soft economic data while Asian shares were mostly higher.

Economically, the August German ZEW Survey saw Current Conditions fall to -77.3 vs. (E) -74.5 and Economic Sentiment drop to 19.2 vs. (E) 34.5 which weighed on stocks and other risk assets.

Domestically, the NFIB Small Business Optimism Index rose to 93.7 vs. (E) 91.7 which eased recession fears and is helping U.S. equity futures relatively outperform ahead of the open.

Looking into today’s session, trader focus will be on the first inflation data of the week with PPI (E: 0.2% m/m, 2.6% y/y) and Core PPI (E: 0.2% m/m, 3.0% y/y) due out ahead of the bell.

There is also one Fed speaker: Bostic (1:15 p.m. ET) and one consumer-focused earnings release: HD (E: $4.55) to watch.

Bottom line, PPI could move markets today if there is a big surprise in the release, but markets are likely to remain in wait-and-see mode as investors await the more important CPI release tomorrow.

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Market Multiple Table: Chart

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Market Multiple Table: Chart: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table Chart (Scenario Targets Compress)
  • The Most Important Financial Asset in the World (Right Now)

Futures are slightly lower following a generally quiet night of news as markets digest Wednesday’s failed rally.

Japan remains at the center of global markets and the “Summary of Opinions” (think of it as the BOJ minutes) showed officials discussed further rate hikes but also that the BOJ is, for now, on hold (and that’s a mild positive).

Geopolitically, tensions between Israel and Iran/Hezbollah remain elevated and a retaliation is expected any day.

Today focus will be on Weekly Jobless Claims (E: 240K) and a better-than-expected number (so under 240k) will help incrementally ease slowdown fears.  Conversely, if claims jump above 250k, expect recession worries to rise further and stocks to react accordingly (lower).

There is also one Fed speaker, Barkin at 3:00 p.m. ET, but he shouldn’t move markets.

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FOMC Preview

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FOMC Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview
  • Chart: Stocks Are Trading With an 85% Correlation to 2007

U.S. equity futures are tracking European stocks higher as traders look ahead to the Fed, big-tech earnings, and more important economic data due in the sessions ahead.

Economically, Japan’s Unemployment Rate fell to 2.5% vs. (E) 2.6% while the EU’s GDP Flash rose to 0.6% vs. (E) 0.5%. The reports are not meaningfully moving markets but seem to be easing recession fears to some degree in pre-market trade.

Looking into today’s session, there are two housing market reports due out early: Case-Shiller Home Price Index (E: 7.2%) and the FHFA House Price Index (E: 6.3%) before Consumer Confidence (E: 99.5) and JOLTS (E: 8.0 million) will be released after the opening bell.

The July FOMC meeting begins today so there are no Fed speakers which will likely bring a sense of “Fed paralysis” before tomorrow’s meeting announcement and Powell’s press conference.

That will leave trader focus on earnings with BP ($0.92), PG ($1.37) and PYPL ($0.97) all due to report before the open while AMD ($0.67), MSFT ($2.90), and SBUX ($0.93) will release results after the close.

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A Potentially Pivotal Week for the 2024 Bull Market

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A Potentially Pivotal Week for the 2024 Bull Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • A Potentially Pivotal Week for the 2024 Bull Market
  • Weekly Market Preview:  Important Updates on Growth, Rate Cuts and AI Enthusiasm
  • Weekly Economic Cheat Sheet:  Jobs Report Friday, Fed Wednesday.

Futures are solidly higher on momentum from Friday’s rally and following a mostly quiet weekend of news, as investors look ahead to an important week for economic growth, rate cut expectations and mega cap tech earnings.

Geopolitically, tensions increased between Israel and Hezbollah following an attack in the Golan Heights and subsequent Israeli retaliation, but for now it’s not moving oil markets.

This week will give us a lot of color on the state of economic growth and a check on market rate cut expectations, but the important events don’t start until tomorrow (MSFT & AMD earnings) as there are no notable economic reports today.

Looking deeper at earnings, about 40% of the S&P 500 reports this week, including several major mega-cap tech stocks, but those important reports don’t start until tomorrow.  Today, we’ll be watching: MCD (E: $3.08), ON (E: $0.92) and SFM (E: $0.77).

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Market Impact of Biden’s Decision

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What’s in Today’s Report:

  • Market Impact of Biden’s Decision to Drop Out
  • Putting Last Week’s Declines in Proper Context (What Tech Giveth, Tech Taketh Away)
  • Weekly Market Preview:  Does the Changing Political Landscape Pressure Markets?
  • Weekly Economic Cheat Sheet:  The First Big National Report for July Comes This Week

Futures are solidly higher on surprise rate cuts from China and as President Biden dropped out of the Presidential election.

President Biden dropped out of the election this weekend and endorsed VP Harris as the new nominee and this should see a mild tightening of the polls.

Economically, China announced a surprise 10 bps interest rate cut and that’s helping to boost the economic outlook.

This week will be a busy one for earnings and economic data, but it starts slowly as there is just one notable economic report today, Chicago Fed National Activity (E: 0.18) and three notable earnings reports:  NXPI ($3.21),VZ ($1.15) and TFC ($0.78). NXPI is the most important earnings report today and if the semiconductor company can post strong guidance, it’ll help ease chip worries (which will help the tech sector and broader market stabilize).

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Olympic Style Ideas (Finding A Common Topic With Clients)

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What’s in Today’s Report:

  • Olympic Style Ideas (Finding A Common Topic With Clients)

Futures are little changed following a night of mixed earnings as NFLX results were in-line while industrial PPG warned of a difficult macro-economic environment.

Economically, the only notable report was UK Retail Sales and they were worse than expected (-1.2% vs. (E) -0.4%) and that will push back slightly against the growing idea that the BOE won’t cut rates in September.

Today there are no notable economic reports, but we do get two Fed speakers, Williams (10:40 a.m. ET) and Bostic (12:45 p.m.).  Of the two, Williams is more important because he’s part of Fed leadership and if he again points towards a September rate cut (by saying the Fed is close to cutting rates) that should help boost stocks.

Earnings, meanwhile, continue to roll on and results so far are mixed.  Important reports today include AXP ($3.22), SLB ($0.83) and TRV ($2.35).

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What Caused This Rotation From Growth to Value (And How Long Can It Last?)

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What’s in Today’s Report:

  • What Caused This Rotation From Growth to Value?
  • How Long Can It Last?

Futures are slightly higher as tech stocks bounce modestly following better than expected earnings overnight.

Taiwan Semiconductor (TSM) posted solid earnings and the stock is modestly higher pre-market and that’s helping the tech sector to bounce and support futures.

Economically there were no important reports overnight.

Today is a busy day of economic data and central bank speak.  First, on the data front, the most important report is the July Philly Fed Survey (E: 3.0) followed closely by Jobless Claims (E: 230k).  Economic data so far this week has been Goldilocks and that’s helped stocks and markets will welcome more Goldilocks reports today, while “Too Cold” data will increase growth worries.

Looking at central banks, there’s an ECB Rate Decision later this morning but they aren’t cutting rates (the only question is how forcefully they telegraph a September cut and the more forcefully, the better for stocks).  Looking at the Fed, we have three speakers today, Logan (1:45 p.m. ET), Daly (6:05 p.m. ET) and Bowman (7:30 p.m. ET) and if they echo recent sentiment that it’s “almost time” to cut rates that should also help support stocks.

Finally, on the earnings front, we get some notable reports today including TSM ($1.37), NFLX ($4.70) and PPG ($2.48).

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The Yield Curve May Un-Invert Soon. Why That’s Not Good (Historically)

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What’s in Today’s Report:

  • The Yield Curve May Un-Invert Soon. Why That’s Not Good (Historically)
  • How the Post CPI “Rest of the Market” Rally Is Accelerating

Futures are moderately lower thanks to significant weakness in tech stocks.

Semi-conductor chip stocks are lower this morning on a trifecta of negative news including soft ASML guidance, reports of tighter chip restrictions with China and bellicose rhetoric from Trump on Taiwan in a recent interview.

Focus will remain on economic data today and the most important report is Industrial Production (E: 0.3%) while we also get Housing Starts (1.305M).  As Tuesday showed, markets still want Goldilocks economic reports, meaning they aren’t too strong but don’t point to economic weakness, either.  We also have two Fed speakers, Barkin (9:00 a.m. ET) and Waller (9:35 a.m. ET), but unless one of them floats the possibility of a third rate cut in 2024, they shouldn’t move markets.

Finally, earnings season continues to roll on and some notable reports today include: ASML ($3.87), JNJ ($2.82), and UAL ($3.97).

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The Important Question in a Noisy Market

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What’s in Today’s Report:

  • The Important Question in a Noisy Market

Futures are slightly higher mostly on momentum as markets again ignore disappointing retailer earnings.

Hugo Boss became the latest retailer to post poor results and cut guidance as anecdotal warnings on consumer spending continue to grow.

The only notable economic number overnight was the German ZEW Sentiment Index and it met expectations.

Today focus will stay on economic data and earnings. The key economic report today (and of the week) is Retail Sales (E: -0.3%) and if that number is weaker than expected, look for concerns about a slowdown to grow (although that likely won’t hit stocks immediately as bad data is still good for stocks).  We also get the Housing Market Index (E: 43) and one Fed speaker, Kugler (2:45 p.m. ET), but they shouldn’t move markets.

On the earnings front the season continues to heat up and reports we’ll be watching today include:  BAC ($0.79), UNH ($6.65) and MS ($1.65).

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