“Volatility is not over yet,” said Tom Essaye, founder of The Sevens Report, in a note. He pointed out the administration’s stimulus packages need congressional approval. “We also need to see more progress…” Click here to read the full article.
What’s in Today’s Report:
Futures are down just under 2% which is an improvement as they were nearly down limit at the lows overnight, so there’s been a good rebound.
On the stimulus front, governments continue to act. Stimulus bill 2 was passed last night and the ECB dramatically increased its QE program by 750 bln euros. and will buy government bonds, corporates and commercial paper. Australia also launched its first ever QE program. All these measures are helping markets and sentiment.
All eyes today will be on Washington for signs of progress on stimulus bill three, and the sooner it passes, the better. From an economic standpoint, Jobless Claims (E: 220K) are the key report and we’re expecting a big increase, while Philadelphia Fed (E: 14.0) will also be important as we want to see more March data.
Tom Essaye, founder of Sevens Report Research, thinks most of Friday morning’s rally can be attributed to a “typical oversold bounce,” though he does note there are hopes global governments will unveil economic stimulus plans over the weekend. That began to take form as Germany announced such a fiscal stimulus package. And on a more positive note, Thursday’s drop could be a sign of investor capitulation, according to Essaye…Click here to read the subscribe.
What’s in Today’s Report:
Futures are sharply higher as stocks rebound from yesterday’s historic collapse.
Most of the morning rally is just a typical oversold bounce, although there is a lot of “chatter” that global governments are planning to unveil economic stimulus plans over the weekend.
In the U.S., expectations are rising for an economic stimulus plan to be announced as early as this morning. This needs to happen by the open on Monday and the plan needs to be substantial, because as we explain in the issue, this crisis has morphed into a crisis of confidence in Washington’s ability to support the economy, and that’s the real reason stocks went into free fall yesterday.
Today all eyes will be on Washington, because the market is expecting a substantial economic relief package from Congress, and if we don’t get one by Monday (or it’s small and ineffectual) then we should all brace for more volatility.
“Oil is the only market that is more volatile than stocks right now, as futures traders continue to digest the implications of the new price war…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
Yahoo Finance’s Brian Sozzi and Alexis Christoforous discuss what’s behind this morning’s market action with Tom Essaye of The Sevens Report Research. Click here to watch the full interview.
What’s in Today’s Report:
Apologies for the slightly tardy delivery. A lot has happened since the close.
Futures are limit down once again as markets were disappointed by President Trump’s speech and proposed economic initiatives.
President Trump announced a travel ban from Europe in an effort to curtail the spreading of the disease, as well as several economic policies aimed at stimulating growth including deferral of income tax payments, more SBA loans, and paid sick leave. All of these initiatives will help the economy, but none are a silver bullet for coronavirus, and as such the market is reacting with short term disappointment.
Econ Today: Jobless Claims (E: 216K), PPI (E: 0.5%). There are no Fed speakers speak today however the Treasury will hold a 30-Yr Bond Auction at 1:00 p.m. ET.
Looking forward, this is a market gripped in panic so we’ll continue to watch the headlines, and we need some good news to break the negative feedback loop in the form of positive corporate commentary or optimism on the transmission of the virus, but those types of headlines have been hard to come by lately.
What’s in Today’s Report:
Futures are lower this morning as hopes for timely fiscal stimulus measures from the U.S. government to combat the negative impact of the coronavirus fade while a “Biden bounce” failed to materialize after the former VP had another strong showing in primary elections yesterday.
Overseas, European shares traded higher after an emergency rate cut by the BOE while Asian markets remained under pressure due to COVID-19 fears with the Nikkei falling into bear market territory overnight.
Today, there is one economic report to watch: CPI (E: 0.1%) while no Fed speakers are scheduled to speak. The only other potential catalyst on the calendar is a 10-Yr Note Auction by the Treasury at 1 p.m. ET that could move bond markets and subsequently, the stock market.
With limited market moving events on the schedule, investors will be looking for further details on the U.S. government’s plans to support the economy through the coronavirus outbreak as well as any further news about the confirmed cases/related deaths as well.
Technically speaking, a break either above yesterday’s highs or below yesterday’s lows in the S&P 500 will likely trigger a follow through move as the market is in a state of indecision and susceptible to a momentum based squeeze either way.
The positive feedback started off with B. of A. Securities strategists who noted that—once the panic finally died off—there was room for “huge rotation to growth stocks and bond proxies” to kick in. The Sevens Report noted that, currently, the S&P 500 was trading at 17 times estimated earnings for 2020, down from just under…Click here to read the full article.
Tom Essaye interviewed with Oliver Renick from TD Ameritrade to discuss the market, oil, coronavirus, and much more. Click here to watch the full interview.
