But it was comments from the Fed that unnerved markets late last week, not fears about the…according to Tom Essaye, author of the Sevens Report. Click here to read the full article.
Super-cap tech has been well bid on the expectation of ‘forever’ low rates and support…said Sevens Report founder Tom Essaye. Click here to read the full article.
That’s a set up where stocks can continue to rally, although I think we all need…wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are tracking global equity markets higher amid easing Omicron fears and good economic data.
GlaxoSmithKline reported overnight that their antibody treatment is effective against the heavily mutated Omicron variant which is helping further ease fears about the new strain.
Economically, Chinese Imports rose 31.7% vs. (E) 21.5% y/y and Exports rose 22.0% vs. (E) 20.3% y/y in November pointing to a still-healthy economic recovery and that is supporting risk on money flows this morning.
Today, there are two lesser followed economic reports due out: International Trade in Goods and Services (E: -$66.8B), Productivity and Costs (E: -4.9%, 8.3%) but neither is likely to materially move markets while there are no Fed officials speaking today.
There is a 3-year Treasury Note auction at 1:00 p.m. ET that could impact yields and the broader curve and if we see a sharp enough flattening move (weak demand for shorter maturities amid rate hike fears) stocks could come under pressure, but to be clear, the tone is very risk on this morning as dip-buyers step into the market, chasing this bounce higher.
If tech is facing headwinds, then the S&P 500 itself will have a hard time rallying since…wrote Tom Essaye of Sevens Report in a note last week. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher mostly on momentum from Thursday’s earnings-driven rally.
Alcoa (AA) was the only notable earnings report overnight but like most reports on Thursday, it beat estimates. While it’s very, very early in earnings season, so far the results are better than feared and that’s driving the rally.
Today is another busy day of economic data, Fed speak, and earnings. Economically, the three key reports are Retail Sales (E: -0.1%), Empire State Manufacturing Index (E: 25.0), and Consumer Sentiment (E: 74.0). Markets will want to see stability in the first two, and the focus will be on inflation expectations in the third (they need to stay close to last month’s readings).
On the earnings front, we have three notable reports today: GS ($9.78), PNC ($3.64), JBHT ($1.77), and we also get two Fed speakers, Bullard (11:45 a.m. ET) and Williams (12:20 p.m. ET), with the latter being the more important of the two.
What’s in Today’s Report:
Futures are solidly higher following slightly underwhelming inflation data and better than expected earnings.
Chinese CPI rose 0.7% vs. (E) 0.8%, implying inflation pressures may be peaking.
On earnings, TSM beat estimates and upped guidance and that’s helping to lift stocks.
Today there are two notable economic reports, Jobless Claims (E: 320K) and PPI (0.5%, 8.7%) and markets will want to see claims continue to fall and PPI remain generally stable. We also have multiple Fed speakers today including: Bullard (8:35 a.m. ET), Bostic (9:00 a.m. ET), Barkin & Williams (1:00 p.m. ET) and Harker (6:00 p.m. ET). Their tone will likely be to reinforce that tapering is happening this year (as the market expects) but that shouldn’t move markets.
Finally, on the earnings front, some important results we’ll be watching today include: TSM ($1.03), BAC ($0.71), WFC ($1.03), C ($1.82), UNH ($4.41), MS ($1.70), WBA ($1.03 and AA ($1.85). If inflation is better than expected, that will help stocks rally.
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).
