“People had aggressively pushed cyclicals higher over the past two weeks. But in order for that to work out beyond the short term, we need to see…” said Tom Essaye, founder of the Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are flat ahead of the Fed decision and multiple key economic releases today while int’l shares declined overnight on soft data.
The Eurozone EC Economic Sentiment Index dropped to 100.8 vs. (E) 101.4 in October, a fresh 3+ year low as recession concerns continue to weigh on growth expectations.
The FOMC Meeting Announcement at 2:00 p.m. ET and Fed Chair Powell’s Press Conference at 2:30 p.m. ET will clearly be the main events for the markets today however there are two key economic reports that warrant attention before the bell this morning: Econ Today: ADP Employment Report (E: 139K) and Q3 GDP (E: 1.7%).
Meanwhile, earnings season remains in full swing with multiple important reports due out today: GE ($0.12), SNE ($1.08), YUM ($0.94), AAPL ($2.84), FB ($1.91), SBUX ($0.70), WDC ($0.28), SU ($0.54).
Bottom line, economic data and earnings will be able to influence early price action across asset classes today but where equity and bond markets close will almost exclusively rely on whether the Fed meets expectations, comes across as dovish, or offers another hawkish (and bearish stocks) surprise like we saw back in late July.
What’s in Today’s Report:
Stock futures are slightly lower and bonds are rising modestly as investors digest yesterday’s new all-time highs in the S&P, eye Brexit developments, and position ahead of the week’s long list of catalysts.
British PM Boris Johnson is making a new push for a general election in early December, increasing the odds of a no-deal Brexit which is weighing on stocks this morning.
There are a few economic reports to watch this morning including S&P Case-Shiller HPI (-0.1%), Consumer Confidence (E: 128.6), and Pending Home Sales (E: -0.2%) but the market’s reaction is expected to be limited as the FOMC meeting begins which will likely lead to a degree of “trader paralysis” today.
Meanwhile, earnings season remains in full swing and there are several notable reports due today which could influence sector trading: MA ($2.01), MRK ($1.25), PFE ($0.63), GM ($1.31), AMD ($0.18), and AMGN ($3.51).
What’s in Today’s Report:
Futures are slightly higher following a generally quiet night of mixed earnings.
On the earnings front, AMZN missed earnings badly but INTC posted strong numbers and the two are largely offsetting one another.
Regarding U.S./China trade, there is a phone call between the two countries today where China will ask for the December tariff increases to be formally scrapped and the 9/1 tariff increases to be rescinded. If this happens, it’s a positive surprise.
Today the calendar is quiet as we have just one economic report, Consumer Sentiment (E: 96.0) and only a few notable earnings reports, VZ ($1.24) and BUD ($1.36).
So, focus will be on that U.S./China trade call, and if we see the September tariff increases rolled back, that will likely send the S&P 500 to new all-time highs.
What’s in Today’s Report:
Futures are slightly higher as better than feared earnings offset more disappointing economic data.
Global flash PMIs universally disappointed this morning as the Japanese (49.8 vs. (E) 51.5), German (48.6 vs. (E) 48.7) and EU ( 50.2 vs. (E) 50.4) numbers missed estimates, reminding us again that we still don’t have stabilization in the global economy.
Today there is a lot of economic data and numerous notable earnings reports, but the most important event of the day is the Pence speech on China (11:00) a.m. Pence is expected to be tough on China, but nothing so drastic that it imperils Phase One. However, last year’s speech sparked volatility, so this remains something to watch.
Economically there are several notable reports including, in order of importance: Flash Composite PMI (E: 50.9), Durable Goods (E: -0.7%), Jobless Claims (E: 214K), and New Home Sales (E: 698K). Additionally, there is one Fed speaker today, Williams (7:00 p.m. ET).
On the earnings front, the reports will continue to roll in, and here are the report we’re watching today: MMM ($2.47), NOC ($4.74), AMZN ($4.46), V ($1.43), INTC ($1.24), COF ($2.87).
Finally, today is the final ECB press conference for ECB President Mario Draghi. There shouldn’t be any surprises and it won’t move markets. But, I did want to note it for history’s sake, as this man literally saved the euro currency and the EU more broadly with these speeches and actions back in 2012 and 2013, although I’m skeptical he will ever get that credit.
What’s in Today’s Report:
Stock futures are flat amid continued Brexit uncertainty ahead of a very busy day of earnings in the U.S.
Economically, the French Business Climate Indicator fell to a more than 4 year low of 99 vs. (E) 102, underscoring the recent trend of weakness in the EU manufacturing sector.
Looking into today’s session there we will get one more data point on the housing market: FHFA House Price Index (E: 0.4%) while no Fed officials are scheduled to speak.
On the earnings front, the Q3 reporting season is nearing its peak with notable reports from: BA ($2.04), CAT ($2.83), FCX (-$0.01), GD ($3.06), WGO ($0.98), and NSC ($2.57) due out before the bell while TSLA (-$0.41), MSFT ($1.25), PYPL ($0.66), F ($0.26), and EBAY ($0.64) will release after the close.
Bottom line, markets will remain sensitive to any material developments regarding Brexit or the Trade War but investor focus is increasingly shifting to earnings, and if reports remain healthy, the S&P could reclaim 3,000 and potentially drift towards the all-time highs.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question” – Tom Essaye, The Sevens Report. Click here to read the full article.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question,” said Tom Essaye, founder of stock market analysis firm, Sevens Report Research, in a note to clients. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed while most international markets rallied overnight as investors remain optimistic about the “phase one” trade deal, continue to eye the fluid Brexit situation, and look ahead to the peak of earnings season.
There were no market-moving headlines overnight.
There are a lot of moving pieces in the market today between economic data and earnings.
On the data front, Existing Home Sales (E: 5.445M) is due out shortly after the open and then things will quiet down until the early afternoon when the Dallas Fed’s Kaplan speaks at 1:00 p.m. ET.
There is also a 10-Yr Treasury Note Auction at 1:00 p.m. ET. Yields have been steadily grinding higher in recent sessions, so strong demand (low yields) could weigh on stocks in the afternoon.
Switching to earnings, there are multiple consumer, defense, and transport companies reporting today including: LMT ($5.03), MCD ($2.20), PG ($1.24), UPS ($2.05), UTX ($2.03), JBLU ($0.53), TRV ($2.39).
For now, the trend in stocks is cautiously positive, but any of the catalysts above could potentially trigger a pullback given the tentative nature of the latest rally.
“If corporate earnings show signs of resilience, especially by the U.S. consumer, then a run to new highs is by no means out of the question,” Tom Essaye, founder of The Sevens Report, said in a note…Click here to read the full article.
