“The bottom line is that if we do see real disappointment in stimulus or the vaccine, then a 10% correction is the likely best-case scenario…” said Tom Essaye of The Sevens Report, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower following lack of progress on the stimulus bill, combined with further escalation of U.S./China tech tensions.
Markets were hoping for a stimulus deal by today, but there’s been no progress on negotiations for two days. So while the market still fully expects a deal by next week, there is disappointment that it likely won’t get done by the end of this week.
U.S./China geo-political tensions continue to rise as President Trump issued an executive order banning U.S. transactions with the parent companies of TikTok and WeChat.
Focus today will be on the Employment Situation report and expectations are as follows: Job Adds: (E) 2.0M, Unemployment Rate: (E) 10.5%.
Bottom line, the strong economic data from earlier this week has made this jobs report more important than it was going to be, as this morning’s number now has the chance to signal the economic recovery is still on (a positive for stocks) or increase concern it’s stalling (which will be a headwind on equities, especially at these levels).
“The bottom line is that if we do see the real disappointment in the stimulus or the vaccine, then a 10% correction is the likely…” said Tom Essaye of The Sevens Report, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed as solid economic data is offsetting mildly negative stimulus headlines.
Regarding stimulus, the headlines over the last 12 hours were slightly negative (more sticking points are emerging) but the market still expects a deal within the next few days and for that deal to be at the upper end of expectations (the weekly unemployment payments are looking to be $400/week into year-end, which is higher than market expectations).
Economic data was solid as German Manufacturers’ Orders (27.9% vs. (E) 9.6%) and the British Construction PMI (58.1 vs. (E) 57.0) both beat estimates.
Today the focus will be on the weekly Jobless Claims (E: 1.442M), and simply put the market does not want to see any further increases in weekly claims as that implies the recovery is pausing. A number above 1.5MM will likely put a headwind on stocks today (unless there’s positive stimulus headlines). There’s also one Fed speaker, Kaplan (E: 10:00 a.m. ET), but he shouldn’t move markets.
“The bottom line is that if we do see real disappointment in stimulus or the vaccine, then a 10% correction is the likely best-case scenario, and it’ll come…” said Tom Essaye of The Sevens Report, in a note. Click here to read the full article.
What’s in Today’s Report:
Futures are rallying on optimistic comments from Secretary Mnuchin about a new stimulus deal being reached by the end of the week as well as upbeat economic data.
Composite PMIs were mostly in line with expectations overnight but EU Retail Sales notably rose 1.3% vs. (E) 0.2% Y/Y in June, a recovery to pre-pandemic levels that is rekindling hopes for a V-shaped economic recovery.
This morning, investor focus will be on economic data early as we get the first look at July jobs data via the ADP Employment Report (E: 1.888M) ahead of the bell while International Trade (E: -$50.3B) and the ISM Non-Manufacturing Index (E: 55.0) will both be released after the open.
Earnings season is still in full swing as well with several companies due to report Q2 results today including: CVS ($1.93), MRNA (-$0.36), HUM ($10.34), ROKU (-$0.55), MET ($0.96), ADT ($0.27).
Beyond economic data and earnings, the market’s main focus is clearly the stimulus bill and any news of further progress will be a tailwind for stocks while any new “roadblocks” will likely trigger some risk-off money flows across asset classes.
What’s in Today’s Report:
Futures are marginally higher following decent economic data combined with some mild progress on stimulus hopes.
Global manufacturing PMIs were generally better than expected as the Chinese PMI rose to 52.8 vs. (E) 51.1 while the EU number also beat expectations (51.8 vs. (E) 51.1).
On the stimulus front, both parties acknowledged some progress on negotiations, but they remained far apart.
Today focus will be on the ISM Manufacturing PMI (E: 53.5) and the market needs/wants a strong number here to help refute the growing list of indicators that imply the economic recovery is pausing/stalling.
Regarding stimulus, headlines will move the market this week but more broadly, investors are expecting some significant progress by the end of the week. If that progress doesn’t occur, that will become a headwind on stocks.
Finally, there are also two Fed speakers today, Bullard (12:30 p.m.ET) and Evans (2:00 p.m. ET), but neither should move markets.
What’s in Today’s Report:
Futures are modestly lower following a quiet night of news as markets digest yesterday’s rally ahead of several days of critical earnings and tomorrow’s FOMC decision.
Economic data was sparse. UK CBI Distributive Trades (it’s like retail sales) beat estimates rising to 4 vs. (E) -25 but the number isn’t moving markets.
Today there are only two notable economic reports, Case-Shiller HPI (E: 4.2% yoy) and Consumer Confidence (E: 95.7) and neither should move markets.
Instead, focus will be on stimulus (negotiations will accelerate and the market expects a done deal in two weeks) and earnings. Specifically, the volume of important earnings reports spikes between now and Friday, so we’ll be watching these results closely (especially the reports on Thursday). Today, some notable earnings include: MMM ($1.77), MCD ($0.76), PFE ($0.64), AMD ($0.16), SBUX ($-0.61), V ($1.02).
According to Tom Essaye, founder of The Sevens Report, stocks could be missing a few “key ingredients” necessary for an even more extended rally. “A combination of 1) Stimulus, 2) Positive trends in the virus, 3) Economic reopenings and 4) Hopes for a vaccine drove stocks higher in Q2…” Essaye wrote. Click here to read the full article.
“A combination of 1) Stimulus, 2) Positive trends in the virus, 3) Economic reopenings and 4) Hopes for a vaccine drove stocks higher in Q2…” wrote Tom Essaye, the founder of The Sevens Report. Click here to read the full article.
