Sevens Report’s Tom Essaye quoted in CNBC on February 13, 2019.
“Markets always assumed the March 1 trade deadline was flexible, but this just confirmed it. Bottom line, the fundamentals are roughly balanced right now as there is…” Click here to read the full article.
What’s in Today’s Report:
Money flows were risk-on overnight thanks to continued trade-war optimism but stock futures are off the highs following more soft economic data overseas.
Trump said he would push back the March 1st tariff deadline, which was previously considered a “hard date,” if there is “good progress” towards a trade deal at that time while President Xi is now expected to attend talks on Friday. Both are incremental positives for the prospects of a successful deal.
Economic data out overnight was less optimistic however. EU Industrial Production fell –4.2% vs. (E) -3.2% Y/Y in December which is just the latest release fueling concerns about a global economic slowdown.
Today, the January CPI Report (E: 0.1%) will be watched closely ahead of the open while there are several Fed speakers before lunch: Bostic (7:15 a.m. ET), Mester (8:50 a.m. ET), Harker (12:00 p.m. ET).
The major focus of the market right now however remains the trade negotiations in Beijing and stocks will be most sensitive to any material headlines regarding the ongoing talks.
What’s in Today’s Report:
Futures are decidedly higher after Congress reached a deal to avert another government shutdown late yesterday and investors remain optimistic about trade talks between the US and China as negotiations in Beijing continue this week.
The NFIB Small Business Optimism Index fell to 101.2 vs. (E) 103 in January underscoring business owners’ uncertain outlook on the economy.
Today, there is one economic report: December JOLTS (E: 6.950M) and several Fed speakers to watch: Powell (12:45 p.m. ET), George (5:30 p.m. ET), and Mester (6:30 p.m. ET).
As long as Powell does not change his recent narrative when he speaks over the lunch hour, investors will likely remain focused on additional updates regarding the new funding deal lawmakers agreed to late Monday and more importantly, the ongoing trade talks in Beijing.
A lot of the good news out there is already priced into stocks at these levels,” wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients. “At 2,700 or higher, the S&P 500 isn’t priced for perfection, but…” Read the full article here.
What’s in Today’s Report:
Futures and global markets are moderately higher following positive reports on U.S./China trade and the potential for economic stimulus in the EU.
Reuters and Axios both had positive U.S./China trade articles this morning, with Axios reporting Trump & Chinese President Xi may meet in mid-March in Florida. That’s particularly notable because it’s assumed the two leader’s won’t meet until a trade deal is effectively done. So, if the report proves to be true, there’s an end in sight which is an incremental positive.
There were also numerous reports that the ECB is considering re-introducing TLTROs (a type of cheap loan to spur economic activity) to combat slowing EU growth.
Today there are no economic reports or Fed speakers so I’d expect a generally quiet trading day unless we get surprise political (possible government shutdown Friday) or geo-political (more U.S./China trade) headlines.
Today’s Report is attached as a PDF.
What’s in Today’s Report:
Futures are moderately weaker as concerns about global growth rise following more weak EU economic data.
German Industrial Production badly missed estimates, falling –0.4% vs. (E) 0.8%, while the European Commission cut 2019 expected EU GDP to 1.3% from 1.9%.
The Reserve Bank of India surprisingly cut rates over night and is now the second large central bank to give markets a dovish surprise (after the RBA on Wednesday).
Today focus will remain on economic data and Fed speak, as we get Jobless Claims (E: 223K), Consumer Credit ($17.5B) and comments by dovish Fed Governor Bullard at 7:30 p.m. ET. If the news is generally dollar bullish and we see a further rise in the dollar, that might weigh on stocks more as a weaker dollar is needed to help boost corporate earnings going forward.
What’s in Today’s Report:
Futures are trading higher with EU shares this morning on the back of strong earnings from BP while the mixed GOOGL results from yesterday are digested along with the Trump-Powell dinner ahead of tonight’s SOTU speech.
Economically, Composite PMI data released overnight was largely in-line with estimates and is not materially moving markets.
Today, there is one economic report to watch: ISM Non-Manufacturing Index (E: 57.1) and there are no Fed officials scheduled to speak.
That will leave earnings in focus with notables: VIAB ($1.02) before the open and SNAP (-$0.08), DIS ($1.57), and ALL ($1.01) after the close.
Beyond earnings, investors are already looking ahead to tonight’s State of the Union Address which is the only significant macro-catalyst this week.
What’s in Today’s Report:
Futures are flat following a very quiet weekend of no incremental news (the weekend news flow was similar to the scoring in the first half of the super bowl).
The only notable economic report was Chinese Service PMI which met expectations at 53.6 vs. (E) 53.9. But, the composite PMI still dropped to 50.9 vs. the previous 52.2 so there are still legitimate reasons to worry about Chinese, and global, economic growth.
Today there are no notable economic reports and the only notable earnings report comes after the close (GOOGL ($11.08)) so I’d expect a generally quiet trading day as investors digest the recent rally/news.
What’s in Today’s Report:
Futures are moderately higher thanks to a dovish Fed article in the WSJ and more solid earnings (SBUX).
The WSJ reported that Fed officials are considering ending their balance sheet reduction earlier than expected, and that’s helped lift futures.
Economic data underwhelmed again as the German IFO Business Expectations Survey declined to 94.2 vs. (E) 97.0.
Today there are no economic reports (Durable Goods & New Home Sales won’t be produced because of the shutdown) and the earnings calendar is relatively quiet (ABBV ($1.92) and CL ($0.73) are two names we’re watching), so focus will likely remain on political headlines as there finally appears to be hints of progress at resolving this government shutdown (although the solution may only last three weeks). If we get any positive news on the shutdown, that’ll likely add to the early rally.
What’s in Today’s Report:
Futures are sharply lower following more disappointing global economic data.
Chinese exports badly missed expectations falling –4.4% vs. (E) 4.8%, further stoking fears of a Chinese economic slowdown. Data in Europe wasn’t much better, as Euro Zone Industrial Production fell –1.7% vs. (E) 0.5%.
Geopolitically, it was a generally quiet weekend as markets are looking past Trump’s economic threat to Turkey.
There are no notable economic reports today so focus will be on earnings, as the Q4 season officially kicks off with C ($1.55). The key for this report (and all reports this season) will be the guidance and management commentary – and anything that downplays a slowing global economy will be welcomed by markets.
