The Country Garden news reinforced the notion that “recession risks in China are real,” explained Sevens Reports’ Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly higher as markets bounce back ahead of this morning’s CPI report and following some positive U.S./China geopolitical headlines.
The U.S. unveiled Chinese investment restriction rules that were less intense than feared, while China removed restrictions on group travel to the U.S. (providing small steps towards a more normal U.S./China relationship).
Today focus will be on CPI and estimates are as follows: E: 0.2% m/m, 3.3% y/y, Core CPI E: 0.2% m/m, 4.8% y/y. As we state in the CPI Preview, the risk for markets is that CPI is more resilient than expected, because at these levels investors are already assuming continued disinflation.
The other notable economic report is Jobless Claims (E: 230K) and markets will want to see that number gradually move higher to reduce the likelihood of one more rate hike. Finally, there’s one Fed speaker today, Harker (4:15 p.m. ET), but he shouldn’t move markets.
What’s in Today’s Report:
Futures are slightly higher thanks to good AMZN earnings and solid EU economic data.
AMZN and AAPL, the last two big earnings reports for Q2, were mixed but generally fine. AMZN posted strong results (stock up 8%) while AAPL’s numbers were slightly underwhelming, but nothing terrible (stock down 1%).
Economically, EU data was solid as German Manufacturers’ Orders and EU Retail Sales beat estimates.
Today focus will be on the jobs report and estimates are as follows: Job Adds, 200k. Unemployment Rate, 3.6%. Wages, 0.3% m/m, 4.2% y/y. The key for markets today is the reaction of the 10-year yield to the jobs report. If the jobs report is “Too Hot” then 10-year Treasury yield will rise and it’ll likely pressure stocks. Conversely, if we get a Goldilocks number, then the 10-year yield should fall modestly and stocks can extend this early rally.
What’s in Today’s Report:
Futures are modestly lower following Wednesday’s selloff on more disappointing earnings and mixed economic data.
Economically, the EU Composite PMI slightly missed estimates (48.6 vs. (E) 48.9) as recession worries creep higher.
Tech earnings underwhelmed again, with disappointing results from QCOM and PYPL (both stocks down 7%-ish).
Today will be a busy day of data and earnings. First, the BOE is set to hike rates 50 bps, but markets will want to see if they signal this is the last hike of the cycle.
Turning to the U.S., there are several important economic reports today including: Jobless Claims (E: 225K), ISM Services PMI (E: 53.0) and Unit Labor Costs (E: 2.6%). Investors need Goldilocks economic data to help stabilize stocks, and if these reports are stronger than expected, look for Treasury yields to rise and for stocks to fall (like what happened yesterday).
Finally, on earnings, we get results from two of the biggest stocks in the market after the close: AAPL ($1.19) and AMZN ($0.34).
“We continue to respect the rally and acknowledge the trend in equities is still higher, but we remain ‘patient bears’ with regard to stocks given the deeply inverted yield curve,” Tyler Richey, co-editor at Sevens Report Research wrote in a Monday report.
“We view the fact that most Treasury spreads have inverted to levels not seen since the early 1980s as a clear warning sign that the more than 500 basis points of Fed rate hikes in less than 18 months was way too much for the economy to weather,” noted Richey.
Click here to read the full article.
What’s in Today’s Report:
Futures are lower this morning as economic data confirmed weakness in the global manufacturing sector while the RBA unexpectedly paused their rate hiking cycle at the conclusion of their latest meeting overnight.
Economically, China’s Manufacturing PMI fell to a contractionary reading of 49.2 vs. (E) 50.1 while the Eurozone PMI met estimates at a very weak reading of 42.7, underscoring the challenges facing the global manufacturing sector.
Looking into today’s session, there are several economic reports to watch: ISM Manufacturing Index (E: 46.5), Construction Spending (E: 0.6%), and JOLTS (E: 9.650 million). Investors will be looking for better than feared manufacturing data in the U.S. and signs that the domestic labor market is softening but not collapsing.
Earnings season also continues with multiple notable companies reporting quarterly results today including: UBER ($0.00), PFE ($0.57), CAT ($4.51), and JBLU ($0.40) before the open and AMD ($0.57), SBUX ($0.95), and AIG ($1.54) after the close.
What’s in Today’s Report:
Futures are modestly higher despite a slightly hawkish surprise from the Bank of Japan.
In a move that was telegraphed in trading on Thursday, the BOJ made a slightly hawkish shift and allowed the yield on 10-year Japanese bonds to move above the previous cap of 0.50%. Technically, this is a hawkish move, although it’s a very small one.
Today focus will be on inflation, as we get two of the bigger inflation reports in the Core PCE Price index (E: 0.2% m/m, 4.2% y/y) and Employment Cost Index (E: 1.1%). Markets will want to see continued signs of disinflation (so numbers at or below estimates) while readings that are higher then expected will push Treasury yields higher, and that will be a headwind on stocks (as we saw yesterday).
Earnings also continue and some notable reports we’re watching include: XOM ($2.00), PG ($1.32), CVX ($2.95), CL ($0.75).
What’s in Today’s Report:
Futures are slightly lower following a night of disappointing tech earnings.
NFLX, TSLA and TSM all posted disappointing earnings results (stocks down 3% – 6% pre-market) and that’s weighing on Nasdaq and S&P 500 futures.
There was no notable economic data overnight.
Today will be another busy day of data and earnings results. On the economic front, the two key reports are Weekly Jobless Claims (E: 250k) and Philly Fed (E: -10.0), and as you can guess (and especially at these stretched valuations) markets will want to see more Goldilocks data (so stable claims and Philly and falling prices). We also get Existing Home Sales (E: 4.23M) but, barring a big miss, that shouldn’t move markets.
Turning to earnings, focus today is on industrials and consumer/healthcare names, and some important results to watch include: AAL ($1.58), TSM ($1.07), JNJ ($2.61), PM ($1.48), COF ($3.31), CSX ($0.49), and PPG ($2.14).
What’s in Today’s Report:
Futures are little changed ahead of a busy day of earnings and despite more encouraging news on global disinflation.
UK CPI rose less than expected, gaining 0.1% vs. (E) 0.4% m/m and 7.9% vs. (E) 8.2% y/y, providing bullish investors more evidence that inflation is declining globally, although that good news was partially offset by a very slightly higher final look at EU HICP (up 5.5% y/y vs. 5.4%).
Today focus will turn to earnings and the key reports to watch are: TSLA ($ 0.82), NFLX ($2.83) and GS ($3.25), as those results will help set the tone for the start of earnings season (results from companies up to today have been fine, although it’s very, very early). Other notable earnings include: ASML ($4.97), USB ($1.13), UAL ($3.99), and IBM ($2.00).
Economically, the only notable number today is Housing Starts (E: 1.48M) but barring a shocking miss, that shouldn’t move the broader markets.
What’s in Today’s Report:
Futures are slightly lower following mixed Chinese economic data and a potential further escalation of the Russia/Ukraine war.
Chinese economic data was mixed as GDP and Retail Sales both missed estimates, while Industrial Production beat, and the data will keep markets wanting more stimulus.
Possibility of further escalation of the Russia/Ukraine war increased after Ukraine claimed responsibility for the destruction of a bridge linking Crimea and Russia.
Today focus will be on the first data point for July, the Empire Manufacturing Index (E: -4.3). Markets will want to see this number be stronger than expectations and ideally turn positive, furthering the “Golidlocks” market narrative of falling inflation but stable growth.
