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Another Tailwind for European Stocks

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What’s in Today’s Report:

  • Another Positive for Europe (and European Stocks)
  • The Key Driver of the Precious Metals Rally

Stock futures are trading modestly lower this morning as rising U.S.-China tensions offset good economic data.

The U.S. directed China to close its consulate in Houston citing IP security risks, a move which China condemned as “an unprecedented escalation” of tensions.

Today, there are two economic reports to watch: FHFA House Price Index (E: 0.4%) and Existing Home Sales (E: 4.795M) while no Fed officials are scheduled to speak.

The Treasury will hold a 20-Yr Bond Auction at 1:00 p.m. ET and with yields near their lows for the year, a strong auction could act as a headwind for risk assets this afternoon.

Aside from those potential catalysts, investors will be watching the fluid situation between the U.S. and China for any signs of further deterioration in relations while earnings season remains in full swing with: BIIB ($7.99), and CP ($2.71) reporting before the open and TSLA (-$0.71), MSFT ($1.38), LVS (-$0.64), and CSX ($0.67) all due to release Q2 results after the close.

Can Stocks Go Down Anymore?

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What’s in Today’s Report:

  • “Can Stocks Go Down Anymore?”
  • Weekly Economic Preview

Futures are higher this morning suggesting that U.S. equities will extend last week’s rally and rise in sympathy with global shares today as investors look ahead to earnings season while coronavirus cases continue to surge globally.

New COVID-19 cases continued to rise sharply over the weekend (Florida set a record with more than 15,000 new cases in a single day Saturday) but the death rate importantly remains low which is allowing the market to largely shrug off the spike.

PEP ($1.25) unofficially kicks off earnings season today while major banks including JPM, C, and WFC are due to report their earnings tomorrow which will be one of the more important market catalysts of the week ahead.

Looking into today’s session, things are lining up to be relatively quiet as there are no economic reports and investors will hear from just two Fed officials: Williams (11:30 a.m. ET) and Kaplan (1:00 p.m. ET).

Market Multiple Table July Update

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What’s in Today’s Report:

  • Market Multiple Table July Update

Stock futures are little changed today as investors digest the choppy trade from the front half of the week amid negative coronavirus headlines, ongoing tensions between the U.S. and China, but still mostly upbeat economic data.

Johns Hopkins University reported a new single day record increase of +60K new coronavirus cases in the U.S. yesterday which is weighing on sentiment this morning.

There were no market moving economic reports overnight and no new data is scheduled to be released in the U.S. today.

One Fed official will speak this afternoon: Bostic (12:15 p.m. ET) however investor focus will largely remain on the trends of the coronavirus outbreak and any new indication as to whether or not there will be another round of economic shutdowns which would be a clear negative for risk assets at current levels.

Tom Essaye Interviewed with Yahoo Finance on June 30, 2020

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Tom Essaye, Sevens Report Research Founder, joins Yahoo Finance’s Brian Sozzi and Jared Blikre to discuss the latest market action. Click here to watch the full interview.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • A Historic Quarter for the Energy Markets

Stock futures are trading modestly lower this morning after the S&P 500 registered its best quarterly gain in over 20 years in Q2 while economic data was mostly better than expected overnight.

Economically, China’s Caixin Manufacturing PMI firmed to 51.2 in June from 50.7 in May while the Eurozone Manufacturing PMI rose to 47.4 from 39.4 in May pointing to a continued rebound in economic activity last month.

Today, we will get our first look at June jobs data with the ADP Employment Report (E: 3.500M) due out ahead of the bell while the ISM Manufacturing Index (E: 49.0) and Construction Spending (E: 0.8%) will both be released shortly after the open.

Later in the day, the only real catalyst to watch for is the release of the latest FOMC Meeting Minutes at  2:30 p.m. ET as traders will be looking for any additional insight into the Fed’s future stimulus plans or view of the state of the economy.

Risks to the Stimulus Driven Rally

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What’s in Today’s Report:

  • Bottom line: Risks to the Stimulus Driven Rally

Stock futures are slightly lower this morning as investors weigh a continued rise in coronavirus cases and escalating geopolitical tensions against positive economic data.

China’s CFLP Manufacturing PMI rose to 50.9 vs. (E) 50.5 in June indicating an acceleration in the economic recovery.

China’s parliament passed a new national security law for Hong Kong o/n but specific details have yet to be released.

Today, there are two economic reports to watch: S&P Case-Shiller HPI (E: 0.5%) and Consumer Confidence (E: 90.0) as well as a slew of Fed speak to monitor: Williams (7:00 & 11:00 a.m. ET), Powell (12:30 p.m. ET), Bostic (2:00 p.m. ET), and Kashkari (2:00 p.m. ET).

Powell’s testimony before Congress, alongside Treasury Secretary Mnuchin, will be the “main event” today and as long as they reiterate their plans for stimulus measures to continue for the foreseeable future, stocks should be able to end the second quarter in a relatively quiet manner this afternoon.

Tom Essaye Quoted in International Business Times on June 26, 2020

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“Coronavirus cases are spiking and reopenings are being delayed, which at a minimum will impact earnings. The resurgence in coronavirus cases is raising concerns that the rebound may be short-lived as voluntary…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Are Rising COVID Cases A Reason to De-Risk?

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What’s in Today’s Report:

  • Is the Increase in COVID Cases a Reason to De-Risk?
  • Weekly Market Preview (Can the S&P 500 Hold 3000?)
  • Weekly Economic Cheat Sheet (Jobs Report on Thursday)

Futures are slightly higher following a quiet weekend as markets attempt to bounce following Friday’s selloff.

Coronavirus cases continued to rise, with new U.S. cases topping 40k for Friday, Saturday and Sunday.  More states (including California) are pausing re-openings, although none have re-imposed economic restrictions yet.

Economic data was sparse overnight as Euro Zone Economic Sentiment slightly missed expectations (75.7 vs. (E) 80).

Today there is just one economic report, Pending Home Sales (E: 11.3%) and one Fed speaker, Williams (3:00 p.m. ET) and neither should move markets.

Instead, focus will remain on the coronavirus and specifically whether more states pause, and potentially rollback, economic re-openings. Technically, the S&P 500 is sitting on support at 3,000, and if that’s broken, we could see a uptick in selling by programs and algos.

Why Surging Coronavirus Cases Aren’t Causing a Selloff

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What’s in Today’s Report:

  • Why Surging Coronavirus Cases Aren’t Causing a Selloff
  • Technical Take: S&P 500

Stock futures are trading higher with international shares as conflicting trade war headlines continue to be digested while economic data was mostly encouraging overnight.

White House trade advisor, Peter Navarro, said late Monday that the U.S.-China trade deal was “over,” but his comments were contradicted by a Trump tweet saying the deal was “intact,” which saw risk-off money flows reverse o/n.

Global Composite Flash PMIs largely topped expectations overnight, bolstering hopes that a swift economic recovery is underway.

Today, investor focus will be on economic data early as the U.S. Composite PMI Flash (E: 45.0) and New Home Sales (E: 630K) are both due out shortly after the opening bell.

There are no Fed officials scheduled to speak today but there is a 2-Year Treasury Note auction at 1:00 p.m. ET that could impact the yield curve and ultimately move the equity markets in the afternoon.

Aside from those potential catalysts, any further developments regarding the trade war or coronavirus infection rates will be closely watched as the market continues to look for direction with the S&P being tightly rangebound for the last week.

New S&P 500 Measured Move Targets

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What’s in Today’s Report:

  • New S&P 500 Measured Move Targets

Futures are solidly higher following a generally quiet night as markets again try to extend this week’s rally.

Economically, British Retail Sales were much stronger than expected, rising 12% vs (E) 6.5% and adding to the better than expected data this week.

New daily coronavirus cases continued to increase in the U.S., but markets for now continue to look past the recent uptick.

Today there are no notable economic reports, although there are multiple Fed speakers including: Powell (1:00 p.m. ET), Rosengren (10:15 a.m. ET), Quarles (12:00 p.m. ET), Mester (1:00 p.m. ET).  But, given Powell’s testimony earlier this week, it’s unlikely any of the Fed officials say anything to materially move markets.

Finally, today is a “quad witch” quarterly options expiration, so we should expect big volumes and an uptick in volatility into the close.