“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.
What’s in Today’s Report:
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.
7 Things Need to Happen For Stocks to Move Higher
Tom Essaye, founder of Sevens Report Research, recently compiled this list of seven things that need to happen for the market to make it back to new highs this year. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly weaker following a generally quiet weekend as markets digest last week’s rally.
Economic data was mixed and is putting mild pressure on stocks this morning as German exports missed expectations (-1.3% vs. (E) 0.1%), reminding markets the global economy isn’t healed yet.
U.S./China trade talks ended last week without an announcement of a deal but talks will continue this week via video-conference and a deal is still widely expected.
Today there are no economic reports and no Fed speakers, so focus will remain on any U.S./China headlines (again a deal could be announced any minute). But, barring any surprises today should be generally quiet as the big events of the week (FOMC Minutes, Chinese data, bank earnings) happen Wed-Friday.
The Dow Rose 39 Points After a Late Comeback
Economic data clearly remain soft on an absolute level, wrote Tom Essaye of Sevens Report on Wednesday. “There is now a laundry list of economic indicators that are flashing their worst readings since 2016…” Click here to read the full article.
Tom Essaye, Sevens Report Founder and President, says we shouldn’t expect a potential U.S.-China trade deal “to create a lasting rally” for the markets. Yahoo Finance’s Alexis Christoforous speaks to him, Brian Sozzi and Brian Cheung. Click here to watch the full interview.
What’s in Today’s Report:
Futures are slightly lower despite more positive U.S./China headlines as markets digest this week’s rally.
The WSJ reported a U.S./China trade deal is now very close, with an announcement of a signing ceremony possibly coming as early as today. But, the reason this headline didn’t cause a rally is because it’s been expected for some time. The key going forward is how quickly tariffs are reduced, and the sooner, the better for stocks.
Economic data was sparse but German Factory Orders dropped –4.2% vs. (E) 0.3% but that number isn’t enough to offset the other good data this week.
Today is generally quiet on the data front as we only get Jobless Claims (E: 216K). There are three Fed speakers today: Williams (9:00 a.m. ET), Harker (1:00 p.m. ET), Mester (1:00 p.m. ET) but unless they say something surprising they shouldn’t move markets.
So, absent any other catalysts, China headlines will likely be the main influence on stocks today as an official headline about a signing ceremony could cause a very short term algo-led rally, but until we find out when tariffs will be rescinded, the U.S./China news likely won’t be enough to power the market materially higher from here.
What’s in Today’s Report:
Futures are flat and international shares were mildly higher overnight as yesterday’s sizeable rally in the U.S. was digested amid a slight pullback in bond yields.
The Reserve Bank of Australia was the latest central bank to note downside risks in the global economy overnight.
Economically, Eurozone PPI was a mild miss: 0.1% vs. (E) 0.2% in February but inflation has been subdued and the report does not change the outlook for ECB policy.
Today, Motor Vehicle Sales (E: 16.8M) will begin to come in over the course of the morning while there is one notable economic report ahead of the open: Durable Goods Orders (E: -1.8%). There are no Fed speakers today.
With a lack of material catalysts between now and Friday’s jobs report, macro focus will be on U.S. – China trade negotiations and the bond market. If Treasury yields revisit last week’s lows, stocks will have a hard time holding the strong gains of the last few sessions, so watch bonds closely.
“Looking forward, there’s been material progress in alleviating the earnings growth and Fed worries that caused the Q4 2018 correction. But it would be a…” Click here to read the full article.
What’s in Today’s Report:
Futures are sharply higher following better than expected global PMIs as hope for a global economic rebound stays alive.
China’s “official” Manufacturing PMI rose to 50.5 vs. (E) 49.8 in March, Japan’s Manufacturing PMI rose to 49.2 vs. (E) 48.9, and the UK’s Manufacturing PMI surged to 55.1 vs. (E) 51.2.
The only disappointment in Europe, where the EU Manufacturing PMI slipped to 47.5 vs. (E) 47.6, and inflation also underwhelmed.
Today focus will remain on economic data and the key report today is the ISM Manufacturing Index (E: 54.2). If that number can beat expectations, it will further reinforce the idea of a growth rebound and bonds yields should rise, the dollar should fall, and this morning’s rally should be extended, although I think it’s hard to imagine the S&P 500 moving more than a percent or two ahead from here of earnings season (more on that in the issue). Other reports today include Retail Sales (E: 0.3%) and Construction Spending (E: -0.2%).
Finally, a “head’s up” that today is April Fool’s Day, just in case anyone (in my case most likely my children) tells you something preposterous!
