The Sevens Report Research analysts said oil’s new trading range spans “between support in the upper $70s and resistance in the low $90s, as traders assess the outlook for demand amid growing recession concerns but still-tight global supply dynamics.” Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower following another disappointing night of earnings.
AMZN became the latest mega-cap tech stock to miss earnings and the stock fell more than 10% after hours. AAPL posted “ok” results and rose 1% overnight.
Economically, the Italian CPI was hotter than expected (11.9% vs. (E) 9.7% yoy) as inflation remains sticky in the EU.
Focus today will be on inflation data, specifically the Core PCE Price Index (0.5% m/m, 5.2% y/y). If this number comes in under expectations, that’ll be a mild positive for markets. Also on the inflation front, the Employment Cost Index (E: 1.2% q/q, 5.0% y/y) will be closely watched by the Fed, while the University of Michigan Five Year Inflation Expectations will be released inside of the Consumer Sentiment report (E: 59.7). If those five-year expectations can drop further below 3%, that will be a positive for markets.
Other notable releases today include Pending Home Sales Index (E: -3.8%) and a few notable earnings results: XOM ($3.88), CVX ($5.02), CL ($0.74).
What’s in Today’s Report:
Futures are modestly lower as the Chinese yuan fell to a 14-year low overnight while traders look ahead to big tech earnings.
Economically, the German Ifo Survey was better than feared with Business Expectations up to 75.6 vs. (E) 74.8.
Looking into today’s session, there are several economic reports due to be released: Case-Shiller Home Price Index (E: -0.8%), FHFA House Price Index (E: -0.7%), and Consumer Confidence (E: 106.0). Since Friday’s renewed hopes for peak-hawkishness, the bad news is good news for markets so further softening in the data could keep downward pressure on yields and support a continued rebound in equities today.
There is also a 2-Yr Treasury Note auction at 1:00 p.m. ET that could shed some light on bond traders’ outlook for the terminal rate as a weak outcome could send yields higher and ultimately see the stock market give back some of the Friday/Monday gains.
Finally, earnings season is becoming the market’s primary focus and there are a lot of big names reporting today including: UPS ($2.84), KO ($0.64), GM ($1.89), MMM ($2.61), JBLU ($0.24), and SYF ($1.42) before the bell, while GOOGL ($1.25), MSFT ($2.30), and V ($1.86) are due to report after the close.
“Oil has given back roughly half of the October gains this week thanks to the negative shift in policy and economic outlooks denting demand expectations,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher after new UK Chancellor of the Exchequer Jeremy Hunt abandoned virtually all of the tax cut proposals in PM Truss’s spending/stimulus plan.
Hunt’s announcement of the abandoning of tax cuts and a review in April of the energy subsidies are easing market concerns and pushing the Pound higher and global yields lower.
Outside of the UK fiscal news it was a mostly quiet weekend.
Today focus will be on the Empire Manufacturing Survey (E: -2.5) which is our first look at October data, and markets will want to see moderation in the headline and a continued drop in the price index, and if that occurs stocks can extend the rebound.
On the earnings front, activity ramps up later in the week but some results we’re watching today include: BAC ($0.79), SCHW ($1.05), BK ($1.10).
What’s in Today’s Report:
Futures are slightly higher as markets digest Thursday’s rebound amidst more positive news from the UK.
Support for the Truss spending/tax cut plan has totally eroded and markets are hopeful the plan will be scrapped entirely, and that’s helping global bond yields fall.
Today there are two notable economic reports, Retail Sales (E: 0.2%) and University of Michigan Consumer Sentiment (E: 58.8), but the key for markets will be the inflation expectations within Consumer Sentiment and if the five-year inflation expectations fall further below 3.0%, that’ll be a positive for markets. We also get two Fed speakers, George (10:00 a.m. ET) and Cook (10:30 a.m. ET) but we don’t expect them to move markets.
Earnings season also unofficially starts today and key reports to watch include: JPM ($2.97), MS ($1.51), C ($1.55), WFC ($1.09), PNC ($3.66), USB ($1.17) and FRC ($2.19). If results are better than expected, that can extend Thursday’s rebound.
What’s in Today’s Report:
Futures are slightly higher ahead of this morning’s CPI as reports suggest UK PM Truss will have to abandon more of her fiscal spending and tax cut plan.
Positively, conservative members of Parliament continued to push back against PM Truss’s fiscal plan and that’s helping the Pound rally and GILT yields to decline.
Negatively, Chinese authorities are reimposing some restrictions in Shanghai as COVID cases rise and as Chinese officials hold on to the “Zero COVID” policy.
Focus today will be on CPI and estimates are as follows: Headline: 0.2% m/m and 8.1% y/y. Core: 0.4% m/m and 6.5% y/y. For CPI to spark a material rally, markets will want to see outright declines in CPI (so less than 8.1% and 6.3% respectively). Conversely, year over year CPI coming in higher than September readings will reinforce the idea that inflation is not declining, and the market is a long, long way from a Fed pivot. The other notable report today is Jobless Claims (E: 225K) but that shouldn’t move markets.
In the past, these “golden crosses” have preceded sharp downturns in stocks. One occurred in September 2008, just before stock-market volatility exploded in response to Lehman Brothers’ bankruptcy, according to Tyler Richey, co-editor of the Sevens Report and a stock-market strategist who closely follows the Vix. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly lower as markets digest the implications of Friday’s strong jobs report following a mostly quiet weekend.
Friday’s jobs report won’t make the Fed any more hawkish, but it’ll keep stocks facing a dual headwind of aggressive Fed and earnings pressure, and that’s weighing on futures.
There were no notable economic reports overnight.
Today is Columbus Day so there are no economic reports while the banks and bond market will be closed, likely leading to slow trading in stocks. There is one Fed speaker, Evans (9:00 a.m. ET), but he shouldn’t move markets (at this point it’s well-known what the Fed plans to do).
“If companies are more positive on the outlook than is currently expected (as happened with the Q2 earnings) then that will offset growing worries that earnings expectations are about to fall sharply,” Sevens Report’s Tom Essaye wrote. Click here to read the full article.
