Posts

Time to Buy Puts?

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What’s in Today’s Report:

  • Time to Buy Puts?
  • Weekly Market Preview (All About Earnings)
  • Weekly Market Cheat Sheet (GDP Friday is the Key Report)

Futures are modestly lower thanks to higher oil and new concerns about the longevity of Chinese economic stimulus.

The South China Morning Post released an article saying Chinese officials will again focus on structural economic reforms, which means limited future economic stimulus.

Oil is 2% higher following reports the Trump administration will not renew any Iranian import wavers.

Today there is only one economic report, Existing Home Sales (E: 5.30M), and that won’t move markets.

So, the key to trading today will be earnings, and here are the reports we’re watching:  HAL ($0.23), KMB ($1.54), WHR ($3.04).

Tom Essaye Quoted in MarketWatch on April 17, 2019

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What is the health-care sector doing these days. Tom Essaye quoted in MarketWatch on April 17, 2019. He talks about this topic, earnings season and more. Read the full article here.

Is Healthcare A Buy? (It’s Negative YTD)

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What’s in Today’s Report:

  • Why Stocks Faded At the Open Yesterday (For the Second Straight Day)
  • Is Healthcare a Buy? (XLV is lagging the S&P 500 by 16% YTD)
  • Oil and Energy Update

Futures are slightly lower following a night of mixed economic data.

EU flash composite PMIs missed estimates (51.3 vs. (E) 51.8) and that’s a disappointment given recent stabilization in China.  But, not all the data was bad as UK Retail Sales rose 1.1% vs. (E) 0.2%, likely on Britons stocking up goods ahead of the hard Brexit deadline in late March.

Today is the eve of a three day weekend but it’s going to be busy as we get a lot of economic data and important earnings.

Important data today includes (in order of importance):  PMI Composite Flash (E: 54.3), Retail Sales (E: 0.8%), Philly Fed  (E: 10.2) and Jobless Claims (E: 206K).  As we said in Monday’s report, the stronger the data, the better for stocks as there is no inflation threat right now (so good data won’t make the Fed hawkish).

On the earnings front, some releases we’ll be watching include:  AXP ($2.00), PM ($1.00), SLB ($0.30) and HON ($1.83).

Sevens Report – What’s in the Box?

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What’s in Today’s Report:

  • A Warning Sign from Box Shipments?
  • Gold Breakdown

Futures are climbing higher this morning while international shares were little changed overnight as investors digested upbeat Chinese economic data against mixed earnings.

Chinese Industrial Production (8.5% vs. E: 6.0%), and Retail Sales (8.7% vs. E: 8.3%) both handily beat expectations in March helping Q1 GDP rise 6.4% vs. (E) 6.3%. But, stabilizing Chinese growth is largely priced in to the market at current levels which is why the reaction has been largely muted by international traders.

Looking to today’s calendar, there is one economic report to watch: International Trade (E: -$53.6B) and two Fed officials are scheduled to speak: Bullard (12:30 p.m. ET) and Harker (12:30 p.m. ET).

The main focus however will remain earnings. A few notables to watch include: MS ($1.17), PEP ($0.92) before the open and AA ($0.17) after the close.

Tom Essaye Quoted in The Wall Street Journal on April 16, 2019

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Health care—the best-performing sector last year—is the worst-performing group in the S&P 500 this year. “The jury is still out on health care, earnings season isn’t going to provide enough clarity to…” Click here to read the full article.

Tom Essaye Interviewed with Fox Business on April 15, 2019

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Sevens Report founder Tom Essaye says the market can still rally despite disappointing bank earnings. Watch the full clip here.

Tom Essaye Quoted in CNBC on April 11, 2019

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“This met current market expectations,” said Tom Essaye, founder of The Sevens Report. “But Fed officials also didn’t see any need to cut rates at this point either, and there wasn’t even much of a discussion…” Click here to read the full article.

Tom Essaye Quoted on Market Watch on April 12, 2019

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Tom Essaye quoted in MarketWatch to share his view on earnings season. “Bottom line, this earnings season is make or break for this market, because we need earnings growth to resume if the S&P 500 is going to…” Click here to read the full article.

Tom Essaye Quoted in Barron’s on April 9, 2019

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“It is a very quiet morning with stock futures trading slightly lower while most overseas markets edged higher overnight as investors look ahead to catalysts later in the week,” writes The Sevens Report’s Tom Essaye. Click here to read the full article.

Earnings Preview: Good, Bad, Ugly

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What’s in Today’s Report:

  • Earnings Season Preview: The Good, the Bad, and the Ugly

Futures are drifting higher this morning while overseas markets were mixed during a quiet night of trading as investors look ahead to a busy calendar of events today.

There were a few economic releases o/n but none materially moved markets with international focus on this morning’s ECB Announcement (7:45 a.m. ET) and Draghi’s press conference afterwards where he is expected to shed light on TLTRO plans.

Looking into the U.S. session today, it is shaping up to be a busy one. In chronological order, there is one economic report ahead of the open: CPI (E: 0.3%, 0.2%), weekly EIA data is due out at 10:30 a.m. ET, and the Fed’s Quarles is schedule to speak at 11:50 a.m. ET.

Moving to the afternoon, there is a 10-Year Treasury Note Auction at 1:00 p.m. ET and if the outcome moves yields materially, stocks will likely follow. Then, the FOMC March Meeting Minutes are due out at 2:00 p.m. ET and the Fed’s Kaplan speaks later this evening: 7:00 p.m. ET.

With so many moving parts today, it will be important to keep an eye on yields as the bond market will offer the best read of how investors are digesting all of the day’s events.

Specifically, the 10 year yield has stabilized at 2.50% recently and if it can move higher, stocks could grind higher as well, however, if yields begin to drop like they did two weeks ago, volatility is likely to rise again, potentially significantly.