I wouldn’t go into treasuries. I think that inflation is here to stay. We don’t know exactly how high it will be, but it’s here to stay, and that’s negative for bonds…said Tom Essaye. Click here to watch the full interview.
The problem is that unlike 2013, the economy has an inflation problem, and the Fed is under enormous political pressure to rein in inflation…Tom Essaye of the Sevens Report noted. Click here to read the full article.
What’s in Today’s Report:
Stock futures are firmly higher as trader focus shifts ahead to the Fed while investors digest mostly upbeat earnings.
MSFT initially fell by 7%+ after earnings yesterday but a positive outlook by management during the investor call has helped shares turn positive and rise by more than 4%.
Looking into today’s session, there are two economic reports due out this morning: International Trade in Goods (E: -$95.1B) and New Home Sales (E 760K) but neither should move markets ahead of the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) which will be the main events today.
Earnings today include: BA (-$0.09), T ($0.76), FCX ($0.96), PGR ($0.99), TSLA ($2.26), INTC ($0.90), STX ($2.36), RJF ($1.77).
Bottom line, the market is coiled up after the volatile start to the week and whether the Fed is dovish or hawkish today will decide whether we see a relief rally or break down to new lows.
Several companies cited higher costs as impacting profitability, furthering margin concerns…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower as escalating Russia/NATO tensions erased early solid gains.
Tensions between Russia and NATO increased over the weekend as the US and UK reduced embassy personnel, implying a military conflict could be imminent.
Economically, the EU flash manufacturing PMI beat estimates at 59.0 vs. (E) 57.9, but the UK number slightly missed (56.9 vs. (E) 57.3).
Today’s focus will be on the U.S. Flash January Composite PMI (E: 56.7) and markets will want to see stable data to ensure the economy is solid heading into future Fed rate hikes. On the earnings front, there are three notable reports today, HAL ($0.34), IBM ($3.39), and LOGI ($1.22), but the really important reports won’t come until later this week.
On the geopolitical front, headlines have turned more ominous regarding a conflict in Ukraine, but as long as it’s limited and there isn’t imminent risk of a larger Russia/NATO conflict, then markets should largely look past the issue as it won’t impact economic growth or Fed policy.
What’s in Today’s Report:
Futures are modestly lower but that’s not that bad considering Thursday’s ugly close and the soft NFLX earnings overnight.
Earnings were generally underwhelming, highlighted by the soft NFLX guidance which sent the stock down 20% after hours. But, PPG and CSX also cited higher costs as impacting profitability, furthering margin concerns.
UK Retail Sales was the only notable economic number, and it missed estimates (-0.9% vs. (E) 3.4%).
Today there are no economic reports and just two notable earnings announcements, SLB ($ $0.39) and ALLY ($2.01), but they shouldn’t move markets. Instead, it’s all about tech. If tech can stabilize today, then markets can bounce (possibly into the Fed meeting next week).
What’s in Today’s Report:
Futures are modestly higher as China made two surprise interest rate cuts overnight, helping stocks bounce from Wednesday’s late-day declines.
China’s central bank made two small surprise interest rate cuts overnight which helped Asian stocks rally (Hang Seng up 3%) and that’s pushing U.S. futures higher.
Today focus will be on economic data and earnings, and for stocks to extend the early morning rebound we need to see stable data and solid earnings (meaning no extreme cost pressures). Economically, the key report today is the Philly Fed Manufacturing Index (E: 19.1). If it suddenly plunges as Empire did on Tuesday, that will slightly increase anxiety about the economy. We’ll also be watching Jobless Claims (E: 207K) and Existing Home Sales (E: 6.40M).
On the earnings front, the key report today is NFLX ($0.82) after the close, but we’ll also be watching: AAL (-$1.54), TRV ($3.86), UNP ($2.60), CSX ($0.41) and PPG ($1.19). If margins are much weaker than expected, look for more earnings-related volatility.
What’s in Today’s Report:
U.S. stock futures are bouncing modestly after yesterday’s steep selloff as the surge in bond yields is showing signs of pausing after some mixed inflation data overnight.
German CPI met estimates of 0.5% in December, while U.K. PPI was 0.3% vs. (E) 0.6%, which is helping to ease some inflation concerns today.
Looking into today’s session, there is one economic report to watch: Housing Starts and Permits (E: 1.65M, 1.710M) while no Fed officials are scheduled to speak today.
There is a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could spark another move in yields (a further rise in rates will continue to weigh on high valuation/growth tech stocks and the broader market while a pullback will open the door to a relief rally).
Finally, earnings season is continuing to pick up with BAC ($0.76), MS ($2.00), UNH ($4.30), PG ($1.65), and CFG ($1.61) all reporting ahead of the bell while UAL ($2.23), AA ($2.04), and DFS ($3.61) will release results after the close.
Bottom line, rising yields have been the biggest influence on stocks in recent sessions so it will take a stabilizing bond market and likely an additional positive catalyst or two (such as good earnings/good economic data) to see equity markets find their footing and rally today.
What’s in Today’s Report:
Stock futures are sharply lower today as global bond yields surge to multiyear highs on tighter monetary policy expectations.
The 2-Yr T-Note yield topped 1% this morning with a rise of 7 basis points which is weighing on high valuation tech names, sending Nasdaq futures down roughly 2%.
Today, there are two economic reports to watch: Empire State Manufacturing Index (E: 26.0) and the Housing Market Index (E: 84). The market will be looking for decent numbers that don’t imply the recovery is losing momentum but not data that is “too hot” and could cause further rate hike fears. There are no Fed speakers today.
The Treasury will hold auctions for both 3-month and 6-month T-Bills at 11:30 a.m. ET today which typically does not warrant much attention, but given the increasing concerns about rate hikes this morning, the outcomes of the auctions could shed additional light on bond traders’ rate outlook and therefore move markets (soft auctions and a further rise in yields would be a stiffening headwind on tech stocks).
Finally, earning season is continuing to get underway with a few notable companies releasing results: GS ($12.10), PNC ($3.61), JBHT ($1.99).
What’s in Today’s Report:
Futures are slightly higher as markets bounce following Thursday’s declines after a generally quiet night of news.
Economic data was better than expected overnight as UK Industrial Production (1.0% vs. (E) 0.3%) and monthly GDP (0.9% vs. (E) 0.3%) both beat estimates.
Today focus will be on earnings, some economic data and more Fed speak. Economically, the key releases today are Retail Sales (E: 0.0%), Industrial Production (E: 0.3%) and Consumer Sentiment (E: 70.4). From the Fed, we have Harker (10:00 a.m. ET) and Williams (11:00 a.m. ET). The bottom line is that to help markets stabilize, the data and Fed speak need to give the “March rate hike” mantra a rest, so that means in-line economic data and a slightly more relaxed tone from Fed officials.
Finally, today marks the start of earnings season and there are multiple key reports to watch today: JPM ($ 2.98), WFC ($1.09), BLK ($10.23) and C ($1.89). Put simply, earnings need to be solid given the recent volatility, otherwise we can expect the declines to accelerate over the coming weeks.