This [supply constraints] will be a more substantial risk to the rally we’ll need to watch for…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher as global markets bounced from Friday’s declines, following a quiet weekend of news.
Tax hike chatter continued to rise over the weekend as Democrats proposed a 26.5% corporate tax (up from the current 21%) and a “top-tier” capital gains tax rate of 28.8% (up from the current 23.8%).
These changes aren’t likely or imminent, but it underscores the market will face tax hike headlines over the coming weeks and months.
There was no notable global economic data overnight.
Today there are no economic reports and no notable Fed speakers, so the focus will be on any more tax hike headlines and on short-term technicals. Last week stocks were able to rally early in the day and faded in the afternoon. If that happens again this morning look for downside momentum to pick up a bit and for more moderate declines.
What’s in Today’s Report:
Futures are moderately lower thanks to more regulatory fears in China and earnings guidance cuts from U.S. companies.
China has warned tech companies about online gaming activities in the latest volley of potential regulations.
United Airlines (UAL) cut guidance as demand for air travel has softened recently due to rising COVID cases, adding to a surprisingly high number of guidance cuts this week.
Today the key event is the ECB Rate Decision (Press Release 7:45 a.m., Press Conference 8:30 a.m.) and markets will be looking to see if the ECB formally announces tapering is coming (it’s possible but not the consensus expectation). Away from the ECB, we also get Jobless Claims (E: 344K) and numerous Fed speakers today (nine speeches in total) but only Williams (2:00 p.m.) is leadership and we already know what he thinks from his comments yesterday (tapering will start in late 2020 but be gradual).
What’s in Today’s Report:
U.S. equity futures are little changed this morning while overseas markets were mixed overnight with Asian stocks outperforming on upbeat Chinese economic data but EU shares drifted lower with focus turning to this week’s ECB meeting.
Economically, Chinese Exports were encouragingly up 25.6% vs. (E) 19.5% y/y in August which supported risk-on money flows in Asian markets however a soft German ZEW Survey is weighing on EU stocks this morning.
Today’s U.S. trading session is lining up to be fairly quiet as there are no economic reports and no Fed officials are scheduled to speak.
There is a 3-Year Treasury Note Auction at 1:00 p.m. ET, however, and weak demand would likely lead to a hawkish reaction across markets with yields moving higher and stocks potentially trading with a defensive tone.
What’s in Today’s Report:
Futures are slightly higher mostly on momentum from Friday’s “dovish Powell” rally, following a quiet weekend.
Fed Chair Powell’s speech on Friday was taken as slightly dovish and that drove the rally in U.S. stocks and it’s carried over globally as we start a new week (all the major foreign markets we monitor are modestly positive).
Economic data was sparse as Euro Zone Economic Sentiment slightly missed expectations (117.5 vs. (E) 118) although that’s not moving markets.
Today there is one economic report, Pending Home Sales (E: 0.3%), but that shouldn’t’ move markets. Instead, as long as the dual tailwinds of 1) Receding COVID cases in the U.S. and 2) A dovish Fed remain, stocks should be buoyant (although if either idea is contradicted expect some give back of last week’s rally). Finally, keep in mind this is one of the most popular vacation weeks of the year due to the looming Labor Day weekend, so don’t be surprised by low volumes and some added volatility.
If there’s a reason for the rally, it’s the growing sense that the Fed won’t…market analyst Tom Essaye, author of the Sevens Report, wrote in a Tuesday email. Click here to read the full article.
Futures are modestly higher on momentum from Friday’s rally and following mixed…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher thanks to continued momentum from Tuesday’s rebound combined with solid earnings reports.
Earnings overnight were good and importantly companies like CMG and UAL said the increase in COVID cases was not hurting business, which helped reassure markets that the Delta variant isn’t changing consumer’s behavior.
There were no economic reports overnight and there are no economic reports later today, so focus will remain on earnings and COVID trends. If earnings are solid and commentary remains upbeat, and we don’t get any negative COVID headlines, then the rebound can continue today.
Some earnings we’ll be watching today include (in order of importance): TXN ($1.82), JNJ ($2.28), KO ($0.57), VZ ($1.29), STX ($2.87), LVS (-$0.19), CSX ($0.37), DFS ($3.58).
What’s in Today’s Report:
Futures have exploded to new all-time highs on positive vaccine results from Pfizer, combined with election uncertainty.
Pfizer just released results stating its COVID-19 vaccine is more than 90% effective in preventing COVID-19 infection among people who had not been previously infected. That 90% is much higher than was expected.
Election clarity had stocks higher pre-vaccine news as Biden was projected to win the Presidency.
Today it’s all about momentum and as stocks should surge led by value, cyclicals and the “Get out and spend” sectors.
What’s in Today’s Report:
International markets were mixed o/n and U.S. stock futures are little changed in choppy trade as investors continue to look for clarity on infection and death statistics related to COVID-19 while digesting a volatile start to the week.
Economically, Japanese Machine Orders rose 2.3% in Feb. vs. (E) -2.7, underscoring the resilience of the manufacturing sector as the coronavirus outbreak began to accelerate.
There are no economic reports due to be released today but the Treasury will hold a 30-Yr Bond Auction at 1:00 p.m. ET and then the Minutes of the most recent FOMC Meeting will be released at 2:00 p.m. ET.
With investors still primarily focused on any developments regarding the coronavirus pandemic, it is unlikely that those two catalysts will move markets today however if there are any surprises, we could see a reaction as volatility remains elevated amid an uncertain macro backdrop.