Tag Archive for: Stocks

What’s in Today’s Report:

• What’s Priced into Stocks At These Levels?
• Weekly Market Preview:  More Trade Updates Coming
• Weekly Economic Cheat Sheet:  Key Data on Friday

Futures are modestly lower this morning thanks to disappointing U.S./China trade news and underwhelming economic data.

President Trump threw more cold water on the idea of existing tariff reduction over the weekend saying that the tariff reduction story was “over-reported.”

Economically, Chinese New Yuan Loans rose 12.4% vs. (E) 12.5%, while British IP & Q3 GDP slightly missed estimates.

Today should be relatively quiet as there are no economic reports today and no Fed speakers due to the Veteran’s Day holiday.  The bond market is also closed.

However, any trade news/commentary could cause larger than normal volatility given expected holiday trading volumes, so we’ll be watching the tape closely.

Whether or not the performance of these cyclical stocks trading at cheap valuations can continue to lead the market depends on whether faith in an accelerating economy is correct. Tom Essaye, president of the Sevens Report, is not ready to endorse this view just yet. “In the last few days there have been hints of stabilization in the growth data, but just hints…” he wrote in a Tuesday note to clients. Click here to read the full article.

What’s in Today’s Report:

• Is Brexit Clarity a Bullish Gamechanger?

Futures are little changed following mixed Chinese economic data.

Chinese GDP missed estimates at 6.0% vs. (E) 6.1%, while Retail Sales met expectations at 7.8% and Industrial Production beat (5.8% vs. (E) 4.9%).  In sum, the data is slightly underwhelming but isn’t changing expectations for global growth.

Looking forward to today, there are no economic reports but there are a lot of Fed speakers including (in order of importance):  Clarida (11:30 a.m. ET), George (10:00 a.m. ET), Kaplan (9:00 & 11 a.m. ET), Kashkari (10:30 a.m. ET).  But, none of them should say anything too surprising and they shouldn’t move markets.

So, markets will stay focused on earnings and Brexit headlines.  Regarding Brexit, a vote on the new Brexit deal will happen Saturday in Parliament, and at this point passage looks to be a 50/50 chance.  So, there’s more drama yet in the three plus year Brexit saga.

Stocks quickly rolled over Thursday after the comments came to light, finishing near the lows of the session. As Sevens Report Research founder Tom Essaye wrote to clients, the algos that scan the internet for headlines took control after Pillsbury’s comments. The machines were right to…Click here to read the full article.

What’s in Today’s Report:

• Identifying Potential Positive Surprises
• EIA/Oil Analysis

Futures are sharply higher on more positive U.S./China trade “chatter” and political resolution in Italy.

Chinese officials made general comments about not wanting to further escalate the trade war and won’t retaliate to the recent tariffs, and that’s helping sentiment.  But, to be clear, no actual progress has occurred – just vague rhetoric, and as far as we can tell the phone call between the two delegations has not occurred yet (remember it was loosely scheduled for Tuesday).  Point being, things haven’t improved as much as the two day rally would imply.

Economic data was decent as German unemployment met expectations while EU Economic Sentiment was better than expected (103.1 vs. (E) 102.5).  Regarding Italy, the country will avoid new elections, and while that’s not a sustainable positive catalyst for markets, it does, for now, remove another potential headwind.

Attendance and volumes will continue to decrease into the long weekend, but focus will remain on any trade related headlines.  Economically, the notable reports today include Q2 Revised GDP (E: 2.0%), Jobless Claims (E: 213K) and Pending Home Sales (E: -0.3%) although none of those should move markets.

Bottom line, if Treasury yields are stable, stocks can hold these early gains, although we continue to caution this rally is being driven by month-end positioning more than any actual, positive progress on the headwinds facing this market.