Sevens Report Research said gasoline supplied, a measure of implied demand, only bounced by 459K bbl/day to 8.52M bbl/day last week after plunging 1.35M bbl/day in the previous week, which was the largest drop since the initial COVID lockdowns. Click here to read the full article.
Additionally, gasoline supplied, a measure of implied demand, only bounced by 459,000 b/d (barrels a day) to 8.52 million b/d last week after the measure plunged 1.35 million b/d the prior week, which was the largest since the initial COVID lockdowns…wrote analysts at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stocks are resilient this morning as futures are only slightly lower despite disappointing overnight earnings and ugly economic reports from Europe.
Earnings overnight were bad with several ugly reports including SNAP (-30%), COF (-3.5%), and STX (-13%).
Economically, July flash PMIs from the EU were also ugly as the composite PMI fell into contraction territory at 49.6 vs. (E) 51.0.
Hope that inflation has peaked is the reason stocks are resilient lately, so today’s focus will be on the July Flash Manufacturing PMI (E: 51.8) and the July Flash Services PMI (E: 52.3). If these reports show meaningful drops in the price indices (like we’ve seen in the Empire and Philly Fed surveys) then that will further the idea that inflation is peaking and support stocks (as long as the headline readings aren’t huge misses).
On the earnings front, results to watch today include TWTR (-$0.06), VZ $1.34), and AXP ($2.37).
Biden’s visit to Saudi Arabia last week has “already become old news as traders refocus on the major influences on the oil market right now: the Russia-Ukraine war, OPEC+ policy outlook, and recession concerns linked to high inflation, COVID lockdowns in China, and aggressive central bank policy around the globe…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Stock futures are higher this morning despite soft earnings from IBM after the close yesterday as European inflation data was not as bad as feared in June.
Eurozone HICP (their CPI equivalent) met estimates with a rise of 8.6% Y/Y in June up from 8.1% in May, however, the core figure slipped to 3.7% Y/Y from 3.8% in May. The release has prompted new bets for a 50 bp hike from the ECB this week, but that is bolstering hopes that peak inflation will come sooner than later.
Looking into today’s session, there is one economic report to watch: Housing Starts (E: 1.588) and after yesterday’s terrible Housing Market Index print, investors will want to see a number more in line with expectations that does not point to such a rapid deterioration in the real estate market.
There are no Fed speakers or Treasury auctions today which will leave traders largely focused on earnings with: JNJ ($2.57), HAL ($0.45), LMT ($6.29), ALLY ($1.90), and TFC ($1.17) reporting before the bell, and NFLX ($2.90) and JBHT ($2.31) releasing results after the close.
Bottom line, the broader equity market remains at a key tipping point right now as recession fears continue to simmer, but earnings have so far been mostly upbeat suggesting there is still a path to a soft landing. And if earnings news is upbeat today, we could see the S&P 500 breakout through key downtrend resistance near 3,890 and make a run at new multi-week highs.
The nation’s refineries simply don’t have the ability to absorb those new barrels of oil suddenly hitting the market and therefore, physical refined product markets remain tight and prices are still elevated…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
This would likely spark a move higher in stocks, allowing the relief rally to continue, since waning inflation pressures might allow the Federal Reserve to potentially pause its interest rate hikes later this year…Tom Essaye said. Click here to read the full article.
The widening spread between the 2-year and the 10-year is signaling a very clear recession warning, especially if it reaches 15 basis points…wrote Tom Essaye of The Sevens Report. Click here to read the full article.
Rising recession concerns in the EU…continue to drive the dollar relentlessly higher vs. the euro, pound, and yen…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following more disappointing economic data from Europe and as the dollar again surged to fresh multi-decade highs.
The German ZEW Economic Sentiment Index collapsed, falling to –53.8 vs. (E) -38.0, adding to quickly rising recession worries in the EU.
The bad ZEW reading further weighed on the euro and boosted the dollar, which rose to another 20+ year high.
Today there are no notable economic reports and just one Fed speaker, Barkin at 12:30 p.m. ET. So, like Monday, we’d expect positioning ahead of tomorrow’s CPI report and any potential COVID headlines from China to move markets (and if there’s a path of least resistance today, it’s lower into the CPI print).