On the earnings front, most of the systemically important companies are behind…wrote Tom Essaye in a recent memo. Click here to read the full article.
Markets look ahead to key economic data in the…wrote Tom Essaye, founder of Sevens Report Research before the jobs report hit the wires. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher following a quiet night as markets tentatively bounce back from Wednesday’s losses.
Economic data was mixed overnight as German Manufacturers’ Orders beat estimates (4.1% vs. (E) 1.5%) while the UK Construction PMI missed estimates (58.7 vs. (E) 63.8).
On COVID, Los Angeles could follow NYC in requiring proof of vaccination for indoor activities (if this becomes widespread policy in large cities it’ll be an economic headwind.)
Today we have a Bank of England meeting (No Change to Rates Expected), Jobless Claims (E: 381K), and one Fed speaker, Waller at 10:00 a.m. ET (who could be hawkish again, remember he called for tapering to start as early as September).
But, unless there’s a major surprise from the BOE or jobless claims, then COVID headlines will drive markets, and any signs of restrictions or behavior changes in people will cause volatility (and a decline in stocks).
The 2021 oil rally, which has seen WTI and Brent both rise around 48% year-to-date, has been driven…said Tom Essaye, founder of Sevens Report, in a note. Click here to read the full article.
Stock futures are rebounding following yesterday’s losses as positive earnings help offset…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
When we start to see broader delta fears being to subside…we should see that metric ramp back up and underscore…analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.
What’s in Today’s Report:
Stock futures are rebounding following yesterday’s losses as positive earnings help offset renewed volatility in Chinese markets and mixed Fed speak to start the week.
Volatility in Chinese equities spiked again overnight as regulators reportedly took aim at gaming companies, but the state-owned news article that initiated the largely tech-focused selling was removed and Chinese indices ended well off the lows.
Economically, EU PPI was the latest “hot” inflation print as it surprisingly rose 0.1% to 1.4% vs. (E) 0.6% in June, but for now, investors are largely shrugging off the release.
Today, there are two economic reports: Motor Vehicle Sales (E: 15.7) and Factory Orders (E: 0.8%) as well as one Fed official scheduled to speak: Bowman (2:00 p.m. ET), however, they should not materially move markets with the July jobs data looming.
Solid earnings have been a major supporter of equity markets in recent weeks and the Q2 reporting season remains in full swing with BABA ($2.24), LLY ($1.89), CLX ($1.29), BP ($0.61), and COP ($1.15) releasing results before the bell, and notables LYFT (-$0.24) and AMGN ($4.23) reporting after the closing bell.
Bottom line, the sharp drop in bond yields played a big role in yesterday’s stock market pullback, so if Treasuries stabilize today, stocks should be able to regain some ground however there are several risks that could see the major indexes make new lows for the week including hawkish Fed chatter and negative Delta-variant developments.
What’s in Today’s Report:
Futures are moderately higher following solid economic data and positive lockdown comments from Dr. Fauchi.
Global July manufacturing PMIs were generally solid, as the EU PMI beat estimates (62.9 vs. (E) 62.6) while the UK PMI was in line (60.4). The Chinese PMI missed estimates (50.4 vs. (E) 50.8) but remained above 50. Overall, the PMIs implied the global economic recovery was on going.
Dr. Fauchi stated over the weekend that he did not think the U.S. would reinstitute lockdowns despite rising COVID cases (which is a positive for the economy).
Today the key economic report will be the ISM Manufacturing PMI (E: 60.8) and markets will be looking for a “Goldilocks” number – one that meets or exceeds expectations but is not so strong that it makes the Fed less dovish. COVID headlines will also potentially move markets but unless there are signs of people changing their behavior (TSA Throughput, consumer surveys) then COVID headlines shouldn’t move markets.
What’s in Today’s Report:
Futures are moderately lower on disappointing earnings and more negative COVID commentary.
AMZN earnings disappointed investors and the stock was down –6% after hours and that’s weighing on futures.
On COVID, a CDC internal memo called the Delta variant potentially as contagious as Chickenpox, although markets remain generally optimistic given positive corporate commentary on economic activity.
Today the key number will be the Core PCE Price Index (E: 0.5%, 3.7%) which is the Fed’s preferred measure of inflation. If that number runs well above expectations (so above 4% yoy) expect a “hawkish” reaction from markets (yields up, stocks flat to down). Also today we get Consumer Sentiment (E: 80.8) and have one Fed speaker, Bullard at 9:00 a.m. ET, but they shouldn’t move markets.
On the earnings front, much of the discussion this morning is on AMZN but there are some other notable reports out this morning including: PG ($1.08), CAT ($2.38), XOM ($1.02), ABBV ($3.11), CVX ($1.54).
What’s in Today’s Report:
Futures are marginally higher following some infrastructure progress combined with a bounce in Chinese stocks.
The bi-partisan $1 trillion infrastructure bill (which the market wants) comfortably passed a key Senate vote on Wednesday, although it still remains a long way from becoming law.
Chinese shares bounced as officials tried to calm markets, although nothing materially positive happened and this should be viewed as nothing more than an oversold bounce.
Today the financial media focus will be on Initial Q2 GDP (E: 8.0%), but as we and others have said, GDP doesn’t usually move markets, and likely won’t today. Instead, Jobless Claims (E: 390K) will be the key economic report today, specifically whether the increase from last week continues, or is reversed (if it’s reversed, that will be a mild positive for stocks). We also get Pending Home Sales (E: -0.8%) but that shouldn’t move markets.
On the earnings front, the key number today comes after the close from AMZN ($12.22), while we’ll also be watching MA ($1.72) and MO ($1.17).
