“The worst of it may be over but, I’d be surprised if the pullback is over. I think we’ll go back and likely take a look at some of this week’s lows simply because the issues that have really been…” said Tom Essaye.
“The worst of it may be over but, I’d be surprised if the pullback is over. I think we’ll go back and likely take a look at some of this week’s lows simply because the issues that have really been the underlying causes…” Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following a quiet weekend as civil unrest in Hong Kong weighed on investor sentiment.
Protests in Hong Kong, which have been ongoing for weeks, intensified over the weekend as all flights out of Hong Kong have been canceled. The turmoil is just adding to general geopolitical concerns and that’s pushing bond yields lower, which is why stock futures are down. The 10 year Treasury yield broke below 1.70% this morning and is trading as of this writing at 1.68%.
Economic data was sparse over the weekend and there was no new news on U.S./China trade. The next event in this drama is whether the September trade talks still occur (for now the answer is “yes” but that could change at any minute and if it does, stocks will drop).
Today the calendar is quiet as there are no economic reports and no Fed speakers, but any China related headlines will move markets.
Copper, a barometer for the global economy, drops to a 2-year low on trade war fears
“The combination of a disappointing Fed and an escalating trade war appears to be too much for this fragile global economy. The summer breakdown in copper…” said the Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures have recovered from overnight losses that were spurred by a weaker than expected yuan fixing by the PBOC and are now higher with EU markets as easier than expected central bank policy overseas is helping offset trade war angst and Forex concerns.
The Reserve Banks of New Zealand and India, and the Bank of Thailand all eased policy more than expected overnight triggering dovish money flows across asset classes underscored by new highs in gold (+1% to over $1500/oz.) and a global bond rally.
Economically, German Industrial Production was -1.5% vs. (E) -0.4% which largely contradicted yesterday’s solid Manufacturers’ Orders print.
There are no economic reports to watch today but there is one Fed official scheduled to speak: Evans (9:30 a.m. ET) and there is a 10 Year Treasury Note auction at 1:00 p.m. ET which could move markets, especially considering the 10s-2s yield spread is testing the lows of the year this morning, below 10 basis points.
Aside from those events, investors will remain focused on any new developments regarding the trade war as the latest tariff announcement (last Thursday) was the main source of the recent spike in volatility.
Wall Street reactions to China trade escalation marked by fear, uncertainty
“It’s not good, obviously. I think that it really surprised a lot of people and I think it underscores that this is not a problem that’s going to be solved in the near-term…” said Tom Essaye, a former trader who founded “The Sevens Report” newsletter. Click here to read the full article.
U.S. markets rebound after China moves to strengthen yuan
“Going forward, stabilization in the U.S.-China trade war is now the most important key to broader market stabilization,” analyst Tom Essaye said in a note to clients. Click here to read the full article.
Dow jumps 300 points as Wall Street rebounds from the worst day of the year
“Going forward, stabilization in the U.S./China trade war is now the most important key to broader market stabilization…” said Tom Essaye, founder of The Sevens Report, in a note. Click here to read the full article.
“Going forward, stabilization in the U.S./China trade war is now the most important key to broader market stabilization…” wrote Tom Essaye, founder of The Sevens Report, in a note. Click here to read the full article.
What’s in Today’s Report:
The trade war continues to dominate the markets as the designation of China as a currency manipulator by the U.S. Treasury caused a sharp selloff in stock futures last night. But the PBOC intervened to “fix” the yuan back below $7/CNY which helped global markets stabilize overnight.
German Manufacturers’ Orders jumped 2.5% vs. (E) 0.6% in June but the details showed a continuation of soft demand in the Eurozone, offsetting the headline strength.
The trade war, and any further developments on the topic, will remain the market’s main focus today however there are a few other potential catalysts to watch.
Economically, the June JOLTS Report (E: 7.293M) will be released mid-morning and then shortly after lunch, there is a 3-Yr Treasury Note Auction (1:00 p.m. ET) which will be important because Treasury auctions have been moving the stock market lately.
Lastly, there is one Fed speaker: Bullard at 1:05 p.m. ET and investors will be listening closely for any clues as to what the Fed’s policy plans are into the end of the year.
