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Economic Breaker Panel: April Update

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What’s in Today’s Report:

  • Sevens Report Economic Breaker Panel – April Update

Futures are decidedly lower with global markets this morning as optimism for a V-shaped economic recovery fades ahead of key economic data and more important earnings today.

Additionally, Trump cut funding to the WHO, raising tensions with China while WTI crude oil prices fell to fresh 18-year lows, below $20/barrel, overnight as a complete lack of demand continues to weigh on the broader energy markets right now.

Looking into today’s session, it is lining up to be a busy one from a potential catalyst standing.

First, there are several important economic reports due to be released including: Retail Sales (E: -7.0%), Empire State Manufacturing Survey (E: -35.0), Industrial Production (E: -4.2%), and the Housing Market Index (E: 60) while there is one Fed official schedule to speak: Bostic (1:00 p.m. ET).

Earnings will also be a major focus today with Q1 results due out from: BAC ($0.65), C ($1.83), GS ($2.83), PNC ($2.24), USB ($0.87), PGR ($1.44), and BBBY ($0.21).

Stocks have become near-term overbought over the last few weeks so any notably negative news flow regarding economic data, earnings, or the coronavirus pandemic could cause a potentially volatile wave of profit taking.

Earnings Season Preview

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What’s in Today’s Report:

  • Five Keys to the Q1 2020 Earnings Season
  • Oil Futures Point to Mid-Summer Economic Recovery

Futures are higher with most overseas markets today as COVID-19 case growth continues to slow in the U.S., economic data was better than feared overnight and investor focus is shifting ahead to Q1 earnings season.

In March, Chinese exports fell -6.6% vs. (E) -15.0% and imports were down -0.9% vs. (E) -8.0% suggesting the economic fallout from the coronavirus pandemic may be less than initially feared.

Today, there is one lesser followed economic report: Import and Export Prices (E: 3.1%, -2.0%), and two Fed officials are scheduled to speak: Bullard (11:05 a.m. ET) and Evans (12:30 p.m. ET).

But, the market’s main focus will be the start of Q1 earnings season, which is going to be extremely important as the corporate results and forecasts will provide much needed context on the outlook for 2020 EPS expectations in the coming weeks. Today, JPM ($2.49), WFC ($0.61), JNJ ($2.08), and FAST ($0.34) all report before the bell while JBHT ($2.22) will release results after the close.

Can Gold Continue to Rally?

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What’s in Today’s Report:

  • Market Multiple Price Chart: S&P 500
  • A Quick Note on Coronavirus Data
  • Can Gold Continue Higher? Yes, Here’s Why

International markets were mixed o/n and U.S. stock futures are little changed in choppy trade as investors continue to look for clarity on infection and death statistics related to COVID-19 while digesting a volatile start to the week.

Economically, Japanese Machine Orders rose 2.3% in Feb. vs. (E) -2.7, underscoring the resilience of the manufacturing sector as the coronavirus outbreak began to accelerate.

There are no economic reports due to be released today but the Treasury will hold a 30-Yr Bond Auction at 1:00 p.m. ET and then the Minutes of the most recent FOMC Meeting will be released at 2:00 p.m. ET.

With investors still primarily focused on any developments regarding the coronavirus pandemic, it is unlikely that those two catalysts will move markets today however if there are any surprises, we could see a reaction as volatility remains elevated amid an uncertain macro backdrop.

Market Multiple Table Update

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What’s in Today’s Report:

  • Market Multiple Table Update
  • Oil Rig Counts Continue to Plunge

Futures are solidly higher this morning, tracking overnight gains in most international equity markets amid optimism that global efforts to contain COVID-19 are working.

Coronavirus “hot spots” such as Italy and New York City are reporting early statistics that show “lock down” measures are working to contain the outbreak as the number of new cases is slowing while death rates are stabilizing.

German Industrial Production was the only notable economic report overnight and it was better than feared in February (0.3% vs. E: -0.8%), helping support the risk-on money flows today.

Looking into today’s session, there are two economic reports due to be released today: JOLTS (E: 6.638M) in the morning and Consumer Credit (E: $14.2B) in the afternoon, however investor focus will remain almost exclusively on coronavirus headlines as hope that the outbreak is being contained is the primary reason for this week’s stock rally.

The Most Important Two Weeks Since ’08

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What’s in Today’s Report:

  • Why the Next Two Weeks Are the Most Important Since 2008
  • Weekly Market Preview:  Can the Coronavirus Peak?
  • Weekly Economic Cheat Sheet:  Jobless Claims and Consumer Sentiment Key This Week

Futures are sharply higher on new hopes the coronavirus growth rate may be peaking in some of the world’s hardest hit countries.

New York, and the U.S. more broadly, saw signs of progress  as coronavirus deaths in NY were down for the first time, as was total new coronavirus cases in the U.S.

Globally there was also progress, as Italy, Spain and Germany potentially have also seen their peak in the virus growth rate.

Today there are no economic reports so focus will remain on coronavirus headlines, and if we get another day of fewer deaths and fewer new cases, confidence will start to build that the worst is behind us.  Fingers crossed.

Q2 Sector Trading Outlook

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What’s in Today’s Report:

  • Growth and Defensives vs. Value and Cyclicals (Q1 Review, Q2 Outlook)
  • Volatility in Perspective (Chart)
  • Chinese Manufacturing PMI Takeaways

Stock futures are sharply lower with most global equities this morning after President Trump warned of “painful” weeks ahead in the fight against the coronavirus outbreak, stating that deaths could approach 250K in the U.S. alone.

Economically, manufacturing PMI data was mixed o/n with the Chinese numbers surprising to the upside while the EU data largely missed estimates which is contributing to the risk-off money flows this morning.

Today, the ADP Employment Report (E: -180K) kicks off jobs week before we will get two more economic releases after the open: ISM Manufacturing Index (E: 44.5) and Construction Spending (E: 0.6%). Additionally, Boston Fed President, Eric Rosengren, is scheduled to speak at 2:00 p.m. ET.

All of those catalysts have the potential to move markets as we begin a new quarter today however the coronavirus outbreak remains, by far, the single most important influence on stocks right now and investors will be watching any press briefings from the White House or developments regarding treatments or data on the growth rate of new cases themselves which, according to our Sevens Report U.S. Coronavirus Daily Growth Rate Tracker, is favorably continuing to slow towards a one-month low this week.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on

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“With the global economy slowing to a standstill and consumer demand for refined products…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Oil Rig

Tom Essaye Interviewed with TD Ameritrade

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Tom Essaye interviewed with Ben Lichtenstein from TD Ameritrade. Click here to read the full article.

Oil Rig Counts and the Energy Market Crash

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What’s in Today’s Report:

  • Why Did Stocks Rally 3% Yesterday?
  • U.S. Oil Rig Counts Plunged Last Week – Here’s Why that Won’t Stop the Oil Crash… Yet

U.S. stock futures are hanging on to modest gains while international markets were mixed overnight as global equities are poised to close out their worst quarter since 2008.

The growth rate of new COVID-19 cases in the U.S. encouragingly slowed to a one month low of just 13% yesterday.

Economically, data out of China, Japan, and the EU was all better-than-feared, helping drive the tentative risk on money flows this morning.

Today, there are two economic reports to watch: S&P CoreLogic Case-Shiller HPI (E: 0.4%) and Consumer Confidence (E: 111.0) while no Fed officials are scheduled to speak.

The Consumer Confidence report could move markets in early trade however investor focus will largely remain on the coronavirus outbreak statistics and ongoing government response to the pandemic while end of quarter book squaring could lead to an uptick in volatility over the course of the day. Near term momentum continues to favor the bulls though and the path of least resistance remains higher right now as the relief rally continues.

How Bad Is the Damage?

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What’s in Today’s Report:

  • How Bad Is the Damage?
  • Weekly Market Preview (Coronavirus Growth Rate Remains Key)
  • Weekly Economic Cheat Sheet (Jobs Report/Global PMIs)

Futures are slightly higher (and well off overnight lows) as markets continue to digest last week’s rally and evaluate the latest coronavirus infection data.

President Trump extended social distancing guidelines until April 30th, which was generally in-line with expectations.

Coronavirus infection numbers were mixed over the weekend, as evidence builds that the growth rate in Italy has peaked, while NY/NJ/CT (and possibly New Orleans/California) remain hot spots here in the U.S.

There is one notable economic report today, Pending Home Sales (E: -1.6%), but focus will shift towards corporate commentary as markets try and assess the level of earnings and economic damage that’s occurred over the past six weeks.