Tom Essaye Quoted in Yahoo Finance on April 27, 2020

“All the data is horrific. But it’s getting less bad than it was say a couple weeks ago and that’s especially true with…” said Sevens Report Research founder Tom Essaye on Yahoo Finance’s The First Trade. Click here to read the full article.

Tom Essaye Quoted in Barron’s on April 28, 2020

“Coronavirus headlines were mostly positive overnight as there were reports of expanded testing capabilities in the U.S., the growth rate of new cases continues to…” writes The Sevens Report’s Tom Essaye. Click here to read the full article.

New York Stock Exchange

Fed Meeting Preview

What’s in Today’s Report:

  • FOMC Preview

S&P futures are up 1% this morning, tracking European shares higher as economies around the globe begin to reopen while investor focus shifts ahead to the slew of earnings releases in the coming days as well as multiple central bank meetings this week.

Coronavirus headlines were mostly positive overnight as there were reports of expanded testing capabilities in the U.S., the growth rate of new cases continues to slow in the U.S., and states across the country are beginning the process of lifting COVID-19 containment policies.

The FOMC meeting begins today (concluding tomorrow) while there are a few notable economic reports to watch this morning: International Trade in Goods (E: -%51.5B), S&P CoreLogic Case-Shiller HPI (E: 0.4%), and Consumer Confidence (E: 95.0).

Investors will be increasingly focused on earnings this week as we approach the peak of the Q1 reporting season.

There are several major corporations, from manufacturing to tech sectors, releasing results today including: MMM ($2.02), PEP ($ 1.02), PFE ($0.71), UPS ($1.23), CAT ($1.77), MRK ($1.39), LUV (-$0.48), BP ($0.28),  AMD ($0.18), GOOGL ($10.97), F (-$0.10), CHRW ($0.71).

Tom Essaye Interviewed with Yahoo Finance on April 24, 2020

Tom Essaye, The Sevens Report founder interviewed with Yahoo Finance’s Brian Sozzi and Alexis Christoforous discussing the market action, jobless claims, earnings and more. Click here to watch the full interview.

Tom Essaye Quoted in CNBC on April 21, 2020

“The historic drop by front month oil futures was largely due to logistical issues in the physical market, namely lack of available storage…” wrote Tom Essaye, founder of The Sevens Report. Click here to read the full article.

What the Bulls Need to Believe

What’s in Today’s Report:

  • What the Bulls Need to Believe
  • Weekly Market Preview:  The Remdesivir trial results are the biggest event this week.
  • Weekly Economic Cheatsheet:  Fed meeting Wednesday (will they reiterate the promise to do whatever it takes to support the markets?)

Futures are moderately higher as markets are extending Friday’s rally following a very quiet weekend.

Anticipation for the reopening of the U.S. and global economy is the “reason” for the rally this morning, although nothing new occurred on that front over the weekend.  Instead, there was just a lot of chatter about reopening in the media, and that is helping stocks rally absent any other important news.

There were no economic reports overnight.

Notably, markets are ignoring a greater than 10% drop in oil prices this morning, as oil markets digest last week’s volatility (and late week rally).

Today there are no economic reports and no Fed speakers, so markets will remain focused on the rollout of reopening plans by states (larger states matter most), and the results from a Remdesivir trial, which will come literally any day this week.  The Remdesivir trial results need to meet optimistic expectations, otherwise we’ll likely see another drop in stocks similar to what we say last week.

What’s Next for Oil?

What’s in Today’s Report:

  • The Oil Crash and Contango Explained
  • Why Is Copper Considered to have a PhD?

Stock futures are enjoying a solid 1%+ bounce this morning while international markets were mixed overnight as oil prices are relatively steady following a two day rout.

WTI crude oil futures, which turned negative on Monday, are wavering between gains and losses this morning but are importantly well above yesterday’s lows ahead of the key weekly EIA inventory report this morning (10:30 ET).

There are no Fed speakers today and just one second tiered economic report that shouldn’t move markets: FHFA House Price Index (E: 0.4%).

Earnings season is in full swing, continuing today with reports from: DAL (-$0.72), T ($0.84), BIIB ($7.74), CSX ($0.92), AA (-$0.29), KMI ($0.24), DFS ($1.80), and STX ($1.29).

Investors remain shaken by the historic surge in oil market volatility this week and energy will continue to be a primary focus of the market today.

And if the EIA print mid-morning is bearish (big inventory builds, resilient U.S. production, low refinery runs), and oil comes for sale again, stocks will likely struggle to maintain this morning’s bid.

How Much Good News Is Already Priced In?

What’s in Today’s Report:

  • How Much Good News Is Already Priced In?
  • Weekly Market Preview:  Focus remains on the global economic re-opening
  • Weekly Economic Cheatsheet:  Flash PMIs on Thursday are a big report

Futures are down more than 1% mostly on digestion of last week’s big rally, as the weekend was relatively quiet from a news standpoint.

WTI crude oil is down nearly 30% (not a typo) but that decline is about logistics, as there are fears of not enough storage in the U.S. for looming oil imports.  Conversely, Brent crude is down only 3%.  Point being, the declines are being driven by a logistical issue, not a fresh reduction in demand (i.e. lower than expected economic growth).

Economic data was sparse overnight, as German PPI fell slightly more than expected (-0.8% vs. (E) -0.7%).

Today there are no economic reports so focus will remain on “reopening” news, as the pace of normalization of the U.S. and global economy will decide whether stocks can hold last week’s gains.

Rotate Out of Growth and Into Value

What’s in Today’s Report:

  • Is It Finally Time to Rotate Out of Growth and into Value?

Futures are sharply higher thanks to a positive article on a Gilead drug  effectively treating coronavirus.

GILD’s drug Remdesivir has been effective in reducing symptoms in a very small (125 people) study at a Chicago hospital, but the news is sending stocks higher. For those interested, a link to the article is here.

Economically, Chinese data was weaker than expected as Q1 GDP fell –6.8% vs. (E) -6.0%.

There are no notable economic reports today so focus will remain on any additional coronavirus information, along with earnings.  Some reports we’re watching today include: PG ($1.11), SLB ($0.25), CFG ($1.61).

The History of Bear Market Rallies

What’s in Today’s Report:

  • A Look into the History of Bear Market Rallies
  • Economic Data Breakdown
  • EIA Analysis and Oil Update

Futures are cautiously higher this morning but international markets were mostly lower overnight as investors weigh the effectiveness of COVID-19 containment strategies against their longer term impact on the global economy.

Economically, Eurozone Industrial Production was the only release overnight (-0.1% vs. E: -0.1%) but it was a February number and therefor largely dismissed by the markets.

This morning, focus will be on what will likely be the most important economic release of the week: Jobless Claims (E: 5.50M) as a larger than expected number of claims will point to further deterioration in the labor market while a smaller number will suggest the government stimulus efforts are beginning to work in supporting the U.S. jobs market.

There are two other economic reports to watch: Housing Starts (E: 1.32M) and the Philadelphia Fed Business Outlook Survey (E: -29.5) while no Fed officials are scheduled to speak.

Beyond economic data, investors will be sifting through more Q1 earnings releases including results from: BLK ($6.69), ABT ($0.58), TSM ($0.66), and BK ($0.90), as well as any new developments on the broader COVID-19 situation.