Tom Essaye Quoted in Barron’s on May 20, 2019
Tom Essaye quoted in Barron’s on May 20, 2019. “Several U.S. tech firms have stopped conducting business with Huawei, per the…” Click here to read the full article.
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Trade Update: Good/Bad/Ugly
What’s in Today’s Report:
- Trade Update: Good/Bad/Ugly
Futures are rebounding with EU markets from yesterday’s sharp, tech-led losses thanks to some encouraging Huawei news o/n and a benign speech by Powell late Monday.
The U.S. announced some temporary exemptions will be issued for companies exporting to Huawei (mainly for existing products) which is helping ease some of yesterday’s elevated trade angst.
Overseas, there were no notable economic reports but the RBA cited risks to global growth in their most recent meeting minutes release, which pressured the aussie.
Looking into today’s U.S. session, focus will largely remain on the trade war and specifically any further information on the Huawei exemptions for U.S. exporters.
There are a few other potential catalysts however, including one economic report: Existing Home Sales (E: 5.37M) and a few Fed speakers: Bostic (7:50 a.m. ET), Evans (10:45 a.m. ET), and Rosengren (12:00 p.m. ET) but none of these are expected to materially move markets amid the most recent trade war developments.
Updated Market Outlook
What’s in Today’s Report:
- Updated Market Outlook (Post U.S./China Trade Breakdown)
- Weekly Market Preview
- Weekly Economic Cheat Sheet
Futures are modestly lower following an uneventful weekend as investors digest Friday’s negative trade headline (that U.S./China trade discussions have been suspended).
On trade, there was no new news over the weekend, but several U.S. tech firms have stopped conducting business with Huawei, per the Commerce Department decision, and that’s just further escalating the U.S./China trade conflict.
Economically, there were no market moving reports (Japanese GDP was stronger than estimates but the details weren’t great).
There are no economic reports today but there are multiple Fed speakers, most important of which is Powell (7:00 p.m. ET), although he’s not expected to make extensive comments on policy. Other Fed speakers today include: Bostic (8:50 a.m. ET), Harker (9:30 a.m. ET), Williams & Clarida (1:00 p.m. ET).
Given the lack of data and important Fed speak, trade headlines should drive markets today and any formal retaliation by China for the Huawei decision will make the trade situation worse, and likely pressure stocks.
Tom Essaye Quoted in Markets Insider on May 15, 2019
Tom Essaye was quoted in Markets Insider on May 15, 2019. The red metal has been the “single-best leading indicator for stocks over the past 18 months,” and is flashing a warning sign for…” Click here to read the full article.
Tom Essaye Quoted in CNBC on May 13, 2019
Tom Essaye quoted in CNBC on May 13, 2019. “Volatility surged to multi-month highs last week as US-China trade war drama unexpectedly escalated…” Click here to read the full article.
Latest on Trade (Why Are Stocks Down?)
What’s in Today’s Report:
- Latest on Trade – Why Are Stocks Down This Morning?
- Market Set Up Beyond Trade (Two Problems)
- Weekly Market Preview
- Weekly Economic Cheat Sheet (Wednesday is an Important Day)
Futures are down more than 1% as markets digest the U.S./China trade situation.
Nothing specifically bad happened over the weekend on U.S./China trade, but Friday’s talks ended without a clear next step and that’s weighing on markets.
Additionally, Friday’s afternoon rally came despite any concrete, positive catalyst, so we are seeing those gains reversed and then some.
There are no economic reports today and just two Fed speakers, Rosengren (9:05 a.m. ET) and Clarida (9;10 a.m. ET), and neither should reveal anything new.
So, focus will be on the trade headlines and tea leaves. Anything that points to a specific next step (a date or event) in the U.S./China trade negotiation should help stocks rebound, while a continued lack of a concrete next step will increase market anxiety the longer it goes on.
Tom Essaye Quoted in CNBC on May 9, 2019
Tom Essaye Quoted in CNBC on May 9, 2019. “Small caps are most sensitive to overall economic growth. I think small caps are declining because…” Click here to read the full CNBC article.
Another VIX-Driven Air Pocket?
What’s in Today’s Report:
- The Latest in the Trade Drama
- Is this the Start of Another VIX-Driven Air Pocket?
U.S. stock futures are decidedly in the red again this morning tracking Chinese shares lower as trade tensions continue to dominate global markets.
There were however, no notable trade developments overnight.
Economically, Chinese Imports rose 4.0% vs. (E) -0.4% while German Industrial Production rose 0.5% vs. (E) -0.5%, both of which were incremental, macro positives.
Today, there are no economic reports due to be released but the Fed’s Brainard speaks at 8:30 a.m. ET, and the EIA will release weekly inventory data at 10:30 a.m. ET which could move energy markets and, in turn, influence stocks.
Additionally, there is a 10 Yr. T-Note auction at 1:00 p.m. ET and if high demand pressures yields to new lows for the week, expect that to become another headwind on stocks.
When Is the Dovish Fed Good for Stocks?
What’s in Today’s Report:
- When Is the Dovish Fed Good for Stocks? It’s the Difference Between “Aggressive” and “Appropriate”
Stock futures are trading lower by 0.50% this morning as trade tensions escalated further late Monday with several U.S. trade officials confirming plans to hike tariffs Friday.
Overnight, it was reported that Chinese Vice-Premier Liu He would still come to the U.S for negotiations this week but for just 2 days rather than the originally planned 4 which was seen as an incremental negative.
Economically, German Manufacturers’ Orders rose 0.6% vs. (E) 1.0% in March which weighed modestly on EU shares.
Looking into today’s session, trade news will still dominate the markets however there are a few other catalyst to watch including March JOLTS data (E 7.215M) and one Fed speaker: Kaplan (7:00 a.m. ET).
What Is Dow Theory Saying Now?
What’s in Today’s Report:
- What is Dow Theory Saying Now
- 10’s-2’s Yield Spread and Bank Stock Outlook (Post Powell’s Press Conference)
Futures are bouncing slightly ahead of the jobs report and following yesterday’s modest declines. Generally it was a quiet night of news.
EU Core HICP (their CPI) was stronger than expected, rising 1.2% vs. (E) 1.0% and incrementally added to the modest hawkish shift in the global central bank outlook following Powell’s press conference.
Today the headline numbers are the Employment Situation Report (Jobs: 180K, UE: 3.8%, Wages: 0.2% m/m) and the ISM Non-Manufacturing PMI (E: 57.3). If the jobs number is very strong (job adds above 250k, UE below 3.7% and wages above 3.5% yoy, that might cause a decent sell off given Powell’s hawkish surprise on Wednesday, but barring that it shouldn’t impact markets too much.
Absent a jobs report surprise, the two biggest events today are comments by Fed Vice Chair Clarida (11:30 a.m. ET) and Williams (1:45 a.m. ET). Specifically markets will be looking to see whether they echo Powell’s “transitory” comments about inflation, or if they sound more concerned. The former will pressure stocks, while the later might provide some relief.
Other Fed officials speaking today include: Evans (10:15 a.m. ET), Bowman (3:00 p.m. ET) and after the market close: Bullard, Daly, Kaplan, Mester.