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Did Situational Awareness and Earnings Eliminate Tech Concerns?

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What’s in Today’s Report:

  • Did Situational Awareness and Earnings Eliminate Tech Concerns?
  • JOLTS Data Takeaways – Another Goldilocks Labor Report

Futures are mostly higher as markets absorb disappointing guidance from AMD and SPCX amid mixed global economic data overnight with persistent optimism for a U.S.-Iran ceasefire deal capping oil prices and supporting bonds.

Economic data was mixed overnight as China’s Services PMI plunged from 54.1 to 50.4 vs. (E) 53.9 in July, however the EU Composite PMI firmed a full 2 points to 52.0 vs. (E) 51.9 last month, helping tamp down growth worries in the Eurozone.

Today, trader focus will be on economic data early with the July ADP Employment Report (E: 75K) and ISM Services Index (E: 54.5) both due to be released by mid-morning.

There is a 4-Month Treasury Bill auction at 11:30 a.m. ET, and the results of the auction have the potential to shed light on the bond market’s outlook for Fed policy, which could ultimately impact the broader equity market leading into the afternoon.

Additionally, there are two Fed officials speaking today: Cook (4:05 p.m. ET) and Daly (8:35 p.m. ET), but both are not until well after the closing bell.

Finally, earnings continues with notable companies reporting today including LLY ($6.71), SHOP ($0.28), UBER ($0.83), DIS ($1.88), SNDK ($33.28), WDC ($3.24), and MELI ($8.69). As has been the case, investors are demanding to see very robust results in order to reward companies given the current high multiple market environment.

 

More Important for Markets: Situational Awareness or the 10 Year Treasury Yield?

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What’s in Today’s Report:

  • What’s More Important for Markets: Situational Awareness or the 10 Year Treasury Yield?
  • Weekly Market Preview: Can Economic Data and Falling Geopolitical Tensions Push Yields Lower?
  • Weekly Economic Cheat Sheet: The “Big Three” Monthly Reports this Week.

Futures are modestly higher on a drop in oil prices as President Trump announced over the weekend that the U.S. and Iran were again close to a ceasefire agreement.

On Saturday President Trump called off the threatened strikes on Iran, citing progress towards a ceasefire and oil is down 5% on the news.

Economically, EU and UK manufacturing PMIs generally met expectations and were both above 50 (51.9).

Today focus will be on the ISM Manufacturing PMI (E: 54.0) and, like all reports this week, investors will want to see a Goldilocks reading of 1) Solid headline growth (so comfortably above 50) and 2) Stability in the price index (so no big jump).

On earnings, the peak of the Q2 season has passed but there are still important reports to watch.  Notable earnings today include: MAR ($3.06), PLTR ($0.28) and ON ($0.72).

 

Why Situational Awareness News Could Be Positive for Tech/the Market

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What’s in Today’s Report:

  • Why Situational Awareness News Could Be Positive for Tech/the Market

Futures are solidly higher, led by tech, as strong Amazon earnings help extend yesterday’s sharp rebound in technology stocks.

Geopolitically, Iran launched new attacks on U.S. assets in Kuwait and Bahrain, pushing oil prices slightly higher as tensions remain elevated.

Economically, Eurozone HICP (CPI equivalent) met expectations at 2.9% y/y while South Korea’s KOSPI surged 17.9%, its best day on record.

Today, there are two notable economic reports to watch including Chicago PMI (E: 55.0) and Consumer Sentiment (E: 54.2). There are no Fed officials scheduled to speak today.

Finally, several notable earnings reports include XOM ($3.80), ABBV ($3.64), CVX ($5.80), AN ($5.43), ETN ($3.08), and D ($0.73).

Markets will be looking for stable economic data and another round of solid earnings to help extend the rebound in stocks.