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Is Housing Starting to Roll Over?

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What’s in Today’s Report:

  • Is Housing Starting to Roll Over?
  • Oil Update and EIA Analysis

Futures are moderately higher as earnings continue to come in better than expected.

TSLA and UAL both posted better than expected earnings and UAL was very upbeat on travel spending and investors are viewing that as a positive macro-economic signal.

EU HICP (their CPI) slightly missed expectations (7.4% vs. (E ) 7.5% yoy), again hinting that inflation may be peaking.

Today will be a busy day with important Fed speak, economic data and earnings.  The key event (potentially) is Fed Chair Powell speaking this morning and while he’s not likely to drop any surprises, it’s always possible.  Economically, the key report today is the Philly Fed Manufacturing Index (E: 20.5) and markets will want to see stability in the data.  We also get Jobless Claims (E: 175K) and Fed President Bullard (1:00 p.m) but they shouldn’t move markets.

On the earnings front, notable reports today include:  T ($0.78), AAL (-$2.48), FCX ($0.88), PM ($1.48), UNP ($2.55), SNAP ($0.01), PPG ($1.13).

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on April 18th, 2022

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Natural-gas prices mark another finish at a nearly 14-year high, while oil prices climb

Unseasonably cold temperatures are driving elevated spring heating demand in the U.S. amid an already bullish fundamental backdrop of subdued inventory levels and no real signs of rising production in the near to medium term…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Analysts Quoted in ETF Trends on April 18th, 2022

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Natural Gas ETF Surges as Tight Supplies Push Prices to 14-Year High

Additionally, a geopolitical fear bid remains in the market and demand is expected to remain elevated leaving the path of least resistance decidedly higher with a medium-term upside target of $9.06…analysts at Sevens Report Research said in Monday’s newsletter, MarketWatch reports. Click here to read the full article.

Sevens Report Analysts Quoted in Report Door on April 18th, 2022

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Natural-gas prices continue to trade at a nearly 14-year high, while oil prices climb

U.S. natural-gas supplies are tight, sitting 23.9% below where they were last year and 17.8% below the five-year average…analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.

Tom Essaye Quoted in Market Watch on April 18th, 2022

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10-year yield highest since late 2018 as Treasury selloff continues

Looking at the yield curve, the 10s-2s spread continued to widen out and is now smack in the middle of the 30-40 basis point resistance range, and we think that’s a critical resistance level…said Tom Essaye, founder of Sevens Report Research, in a note. Click here to read the full article.

Why Yields Have Risen So Sharply

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What’s in Today’s Report:

  • Understanding Why Longer-Duration Yields Are Rising So Sharply
  • Chart – Dollar Index Hits New Multiyear Highs

Futures declined overnight as NFLX dropped sharply on disappointing earnings (specifically declining subscribers) but a pullback in yields has helped the market stabilize in early morning trade.

Economically, German PPI was the latest hot inflation print as the headline spiked 4.9% vs. (E) 2.3% M/M.

Looking into today’s session, there is a slew of potential catalysts for the market beginning with another report on the housing market: Existing Home Sales (E: 5.86M) and then a busy Fed speaker circuit with: Daly (10:30 a.m. ET), Evans (11:30 a.m. ET), and Bostic (1:00 p.m. ET) all scheduled to speak.

There is also a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could move yields and impact equity markets.

Finally, earnings season continues today with: PG ($1.29) ahead of the bell and TSLA ($2.27), UAL (-$4.15), AA ($2.99), and CSX ($0.38) due to report after the close.

Tom Essaye Quoted in Barron’s on April 14th, 2022

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Tech Stocks Slide, Banks Report Earnings—and What Else Is Happening in the Stock Market Today

Banks only do that when they think that default rates, which are currently low, will start to rise…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Barron’s on April 15th, 2022

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Commodities Are Hot Right Now. But the Party May Be Over.

We do see them [commodities] as stretched in the short term… said Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

 

Earnings Season Preview

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What’s in Today’s Report:

  • Earnings Season Preview
  • EIA Analysis and Oil Market Update

Futures are little changed following a quiet night of news and ahead of the long weekend.

There were no notable economic reports overnight. Geopolitically, the Russia/Ukraine war raged on as fighting intensifies in eastern Ukraine (as has been expected).

Earnings overnight were net positive as Taiwan Semiconductor (TSM) provided solid guidance and that’s helping to relieve some ongoing semiconductor supply anxiety.

Today will be a busy day, with the first potentially big event being the ECB Decision at 7:45 a.m. ET.  No change is expected to rates or QE, but if Lagarde is hawkish in her commentary it could hit stocks.

Economically, we’ll have multiple reports today including, in order of importance, Retails Sales (E: 0.6%), Consumer Sentiment (E: 58.8), and Jobless Claims (E: 175K).  As has been the case, markets will want to see continued stability in the data.

Finally, we have two Fed speakers, Mester (2:30 p.m. ET) and Harker (6:00 p.m. ET), but they shouldn’t move markets.

Are Stock and Bond Markets Starting to Forecast an Economic Slowdown?

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What’s in Today’s Report:

  • Are the Stock and Bond Markets Starting to Forecast An Economic Slowdown?

Futures are slightly higher mostly on momentum from Thursday’s close, following a quiet night of news.

The global trend in central banks turning more hawkish continued overnight as the Reserve Bank of India left rates unchanged (as expected) but warned that inflation was too high.

Geopolitically, a Kremlin spokesman said that Russia hoped to end its “operation” in Ukraine in the coming days or weeks, although analysts are skeptical of the promise.

Today there are no notable economic reports nor any Fed speakers, so between the sparse calendar and the Masters, I’d expect a relatively slow day.  That said, if we get any geo-political headlines from Russia that imply a sooner than expected cease-fire, then stocks can extend Thursday’s rally.