Tom Essaye quoted in Seeking Alpha. Analysts are also starting to reassess the June market comeback, with some saying it doesn’t quite make sense. “This rally is not fundamentally backed. Instead what we are seeing is a…” Click here to read the full article.
What’s in Today’s Report:
Futures are marginally higher following a busy night of news, but none of it shifted the current market outlook.
If there is a “reason” for the gains this morning it’s hopes for more Chinese stimulus as Chinese Vice Premier Hu called for more stimulus to help the economy, although no specifics were given and China’s already been aggressively stimulating the economy for months – so this isn’t exactly incremental news.
Geo-politically, Brent crude oil surged 3% after two tankers were attacked via a torpedo and mine strike overnight in the Gulf of Oman (near the mouth of the Strait of Hormuz). It’s unclear who is responsible at this point but that’s obviously increasing tensions in an already unstable part of the globe.
The remaining big event for the week comes tonight via the Chinese economic data, so today will be spent watching the headlines for any trade updates, while on the economic front we get Jobless Claims (E: 216K) and Import & Export Prices (E: -0.3%, 0.1%), but neither should move markets materially. Finally, there is a 30 Yr. T-Bond Auction at 1:00 p.m. ET and we’ll be watching to see if there are any signs of a Chinese “buyers strike” for Treasuries (so far, it’s not happening).
What’s in Today’s Report:
Futures are higher as Tuesday’s “squeezy” rally carried over into international markets overnight thanks to the dovish Fed rhetoric over the last 24 hours and a handful of incremental positive macro developments.
Mnuchin will meet with Chinese officials this weekend and there is growing support by Republican Senators to block Mexican tariffs, both of which are trade war positives.
Economic data overnight was mixed but “goldilocks” as EU composite PMIs were largely better than feared, Eurozone Retail Sales were in line with expectations, while inflation statistics came in light.
Today, focus will be on economic data early with the ADP Employment Report (E: 175K) due out ahead of the bell while the ISM Non-Manufacturing Index (E: 55.8) will print shortly after the open.
There is also one Fed speaker: Bostic (9:45 a.m. ET) and if the general tone remains dovish, this week’s short-squeeze in stocks can continue with the S&P approaching the 2850 area.
However, because the macro backdrop has not materially improved so far this week (again the developments have just been “less bad”), it is unlikely at this point that the move is the beginning of a sustainable, longer term rally.
Tom Essaye Quoted in Barron’s on May 31, 2019.
Investors have to consider what Tom Essaye calls the “worst case scenario.” In this case, the governments of Mexico and China decide to wait until the next election…click here to read the full article.
Tom Essaye Interviewed with Yahoo Finance on May 31, 2019. A lot of important topics to talk about lately. Watch the full video here.
What’s in Today’s Report:
Futures are modestly lower following a generally quiet three day weekend, as investors digest last week’s deterioration in economic data and U.S.-China trade relations.
Economic data was sparse overnight and the only notable report was German GfK Consumer Climate, which slightly missed expectations (10.1 vs. (E ) 10.4). There was no material economic data out Monday.
On trade, Trump’s trip to Japan was a general non-event and there were no new developments (positive or negative) on U.S.-China trade.
Today we have a few housing numbers including Cash-Shiller HPI (E: 2.5% y/y) and FHFA HPI (E: 0.3% m/m) as well as Consumer Confidence (E: 129.8), but none of those should move markets materially.
Instead, focus will be on the news wires for any updates on U.S. – China trade and on support in the S&P 500 at 2800, which is becoming an increasingly important level.
Tom Essaye was quoted in Markets Insider on May 15, 2019. The red metal has been the “single-best leading indicator for stocks over the past 18 months,” and is flashing a warning sign for…” Click here to read the full article.
What’s in Today’s Report:
U.S. stock futures are decidedly in the red again this morning tracking Chinese shares lower as trade tensions continue to dominate global markets.
There were however, no notable trade developments overnight.
Economically, Chinese Imports rose 4.0% vs. (E) -0.4% while German Industrial Production rose 0.5% vs. (E) -0.5%, both of which were incremental, macro positives.
Today, there are no economic reports due to be released but the Fed’s Brainard speaks at 8:30 a.m. ET, and the EIA will release weekly inventory data at 10:30 a.m. ET which could move energy markets and, in turn, influence stocks.
Additionally, there is a 10 Yr. T-Note auction at 1:00 p.m. ET and if high demand pressures yields to new lows for the week, expect that to become another headwind on stocks.
What’s in Today’s Report:
Stock futures are trading lower by 0.50% this morning as trade tensions escalated further late Monday with several U.S. trade officials confirming plans to hike tariffs Friday.
Overnight, it was reported that Chinese Vice-Premier Liu He would still come to the U.S for negotiations this week but for just 2 days rather than the originally planned 4 which was seen as an incremental negative.
Economically, German Manufacturers’ Orders rose 0.6% vs. (E) 1.0% in March which weighed modestly on EU shares.
Looking into today’s session, trade news will still dominate the markets however there are a few other catalyst to watch including March JOLTS data (E 7.215M) and one Fed speaker: Kaplan (7:00 a.m. ET).
What’s in Today’s Report:
Futures are tentatively bouncing from yesterday’s late sell off as markets digest an imminent U.S./China trade deal, mixed economic data and the Fed meeting.
Multiple press reports yesterday implied a U.S./China trade deal could be completed next Friday, with the 10% tariffs on 250B in goods immediately reduced. This meets current market expectations and is already priced in, so there was no rally on the news.
Economic data met low expectations overnight as the EU Manufacturing PMI rose slightly to 47.9 vs. (E) 47.8, but that’s not moving markets.
Today we get a few notable economic reports via Jobless Claims (E: 215K), Productivity and Costs (E: 1.9%, 1.8%) and Factory Orders (E: 1.5%), but none of those should move markets. Instead, with no major events scheduled for today, traders will be focused on whether the S&P 500 can hold yesterday’s low (2923). If that support is fails than look for selling to accelerate.
