The U.S. dollar, which rallied to a two-month high last week, is demonstrating a bullish signal from a technical perspective and has the potential to trend up in the coming months. The greenback’s strength will weigh on equities, starting by the beginning of June, noted Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are slightly lower as investors digest an unexpected rate hike by the RBA and mixed economic data overnight.
The RBA raised rates 25 bp to 3.85% overnight (E: no change) citing stubbornly high inflation which triggered a hawkish reaction in markets in overnight trading.
Economically, European Manufacturing PMI data was largely in line with estimates although the readings remained deep in contraction territory while the “Narrow Core” HICP Flash reading for April was 5.6% vs. (E) 5.7%, the first decline in the reading in 10 months. On balance, the European data eased some of the hawkish concerns weighing on risk assets in pre-market trading.
Today, there are a few economic releases to watch: Motor Vehicle Sales (E: 14.8 million), Factory Orders (E: 1.3%), and JOLTS (E: 9.650 million) and investors will want to see signs of a continued but steady slowdown in growth and easing price pressures in order to keep soft landing hopes alive.
Earnings season continues today with UBER (-$0.10), PFE ($1.00), BP ($1.33), MPC ($5.75), and SYY ($0.92) reporting before the bell, and AMD ($0.56), F ($0.39), and SBUX ($0.64) after the close.
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Ten-year Sevens Report veteran Tyler Richey, CMT, will be the lead analyst on Sevens Report Technicals.
Sevens Report Technicals will be delivered at the start of each trading week, and will be similar in appearance and coverage to last week’s popular special technical report. The first issue will be delivered this coming Monday, May 8th.
Sevens Report Research is a retention-driven business, so like all our research products, pricing for Sevens Report Technicals will be among the lowest in the industry for the quality and depth of analysis provided at just $225/quarter or $825 per year (a savings of $75). We are also extending a one month “Grace Period” where you can choose to cancel and receive a full refund—so there is literally no risk to try Sevens Report Technicals and see if it’s right for your business!
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To see last week’s special edition technical report, click here.
To learn more about Sevens Report Technicals, including the inspiration behind it, please click this link.
What’s in Today’s Report:
Strong earnings and guidance from tech giants MSFT (+8%) and GOOGL (+1%) after the close yesterday are supporting gains in U.S. equity futures today while more cautious results in Europe are weighing on overseas markets.
Economically, Australian CPI fell to 7.0% vs. (E) 6.9% y/y in the first quarter, down from 7.8% in Q4, but the inflation reading is still well above target and serves as a reminder that global central banks still have work to do in order to get inflation under control.
Looking into today’s session earnings season slows down somewhat with only a few notable companies reporting, including: BA (-$0.98), and GD ($9.34) before the bell, and META ($1.96) after the close.
That will leave investors focused on economic data early with Durable Goods Orders (E: 0.9%) and International Trade in Goods (E: -$90.0B) set to be released. There are no Fed speakers today but there is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and impact stocks in afternoon trade.
In Case You Missed It: Our Special Technical Market Update for Sevens Report Subscribers Was Delivered Monday Morning
We continue to receive overwhelmingly positive feedback from our subscriber base regarding Monday’s special technical market update.
The report included analysis on all asset classes starting with the major equity indices across various time frames before looking at the latest investment style and sector trends. Additionally, we dove into currency, commodity, and Treasury market technicals to help identify trends that present both risks and opportunities to portfolios in these historically uncertain market conditions.
What’s in Today’s Report:
Futures are sightly lower following a quiet weekend of news as markets look ahead to key earnings reports and economic data this week.
Economically, the only notable report was German IFO Business Expectations, which slightly beat estimates.
Debt ceiling headlines will increase this week as Republicans try to pass a debt ceiling bill, and if it fails to pass that will increase debt ceiling anxiety in the markets.
Today there is only one economic report, Chicago Fed National Activity Index (E: -0.02), and barring a major surprise that shouldn’t move markets.
Focus then will be on earnings, and especially the First Republic results after the close (estimates are $0.72/share). Markets will want to see stability from what’s viewed as one of the most vulnerable regional banks. Other notable earnings today also include KO ($0.65) and WHR ($2.44) which will give us insight into consumer spending.
Special Technical Market Update Delivered Today
The special technical report will be delivered via email later this morning.
Due to increased demand for more detailed technical insights from our subscribers, we have prepared a separate, special market update that provides detailed analysis of the current technical state of this market, including:
As the economy (and possibly markets) approach a tipping point and the Fed readies for the likely final rate hike, we can expect more volatility and conflicting fundamental economic data. Having high quality, plain-English technical analysis can help us better navigate this market.
Tyler Richey, Sevens Report CMT, has been the lead analyst on this special report, and we are all excited to deliver this value-add research to subscribers today.
What’s in Today’s Report:
Futures are moderately weaker following a disappointing night of earnings.
TSLA, NOK, FFIV and TSMC all missed earnings and provided cautious commentary or guidance, and that’s increasing concerns about an economic slowdown.
Today there are numerous potential catalysts including important economic reports, lots of Fed speak and more earnings reports.
Starting with the data, the key report today is Philly Fed (E: -19.4) and markets will want to see if it confirms the rebound we saw in Empire (if it does, expect some stock weakness as Fed expectations become slightly more hawkish). We also get Jobless Claims (E: 242K) and any move closer to 300k will be welcomed as it signals a slightly more normal labor market.
Turning to the Fed, there are multiple speakers today including Waller (12:00 p.m. ET), Mester (12:20 p.m. ET), Logan (3:00 p.m. ET) and Bostic (5:00 p.m. ET) and it will be notable to see if they all push back on the rate cut expectations in the markets.
Finally, on earnings, results lately have been underwhelming so these reports are becoming more important. Earnings we’re watching today include: T ($0.58), TSM ($1.21), AXP ($2.63), UNP ($2.57), PPG ($1.55), CSX ($0.43), STX ($0.18).
What’s in Today’s Report:
Stock futures briefly spiked lower overnight in the wake of a hot CPI print in the U.K. but bond markets are steady and futures have largely stabilized as focus turns to the Fed.
Economically, U.K. CPI jumped from 10.1% in January to 10.4% in February, well ahead of estimates of 9.9%, however, both input and output PPI readings unexpectedly declined, easing some of the inflation worries this morning.
There are no notable economic reports today which will leave markets focused on the price action in the banking sector in the morning (meaningful weakness could drag the broader market lower) before attention shifts to the FOMC Meeting Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) this afternoon.
A 25 basis point hike and no change to the dot plot is the consensus expectation but there are a lot of moving pieces to today’s meeting so watching the reaction from the Treasury market this afternoon will be critical in interpreting what today’s decision means for markets.
What’s in Today’s Report:
Futures are little changed despite the Swiss National Bank providing Credit Suisse (CS) liquidity, as that news isn’t eliminating general market anxiety.
Credit Suisse is rallying more than 20% pre-open after it was granted a $54 billion credit line from the Swiss National Bank.
Despite the positive CS news, investors remain very nervous and jittery about U.S. regional banks (especially FRC).
Today is an important day as there are numerous potentially market moving events this morning, with the most important being the ECB Decision (E: 50 bps hike). Markets will want to see the ECB “blink” in the face of market turmoil and hike less than 50 bps. If the ECB sticks to a 50 bps hike, don’t be shocked to see more volatility today.
Economically, the hope that the Fed “blinks” and does not hike 25 bps next week has helped support stock and bond markets this week, so investors will want to see today’s economic data come in soft enough to make no hike more likely next week. Key reports today are, in order of importance: Philly Fed (E: -15.8), Jobless Claims (E: 205K), Housing Starts (E: 1.315M).
Oil traded lower into the weekend, but the pace of declines “slowed as WTI approached technical support between $70 and $72,” said analysts at Sevens Report Research in Monday’s newsletter. Click here to read the full article.
What’s in Today’s Report:
Futures little changed following a quiet night of news as investors further digest Wednesday’s big rally in stocks and Thursday’s big rally in bonds all while awaiting today’s jobs report.
Economically, the only notable number overnight was Euro Zone PPI which fell more than expected (-2.9% vs. (E) -2.0%), adding to this week’s list of indicators showing global dis-inflation.
Focus today will be on the jobs report and expectations are as follows: Job Adds 200K, UR Rate 3.7%, Wages 0.3% m/m 4.6% y/y. Due to the big rally in stocks and bonds on Wed/Thurs, a lot of the “benefit” from a “Just Right” number is likely priced in at these levels, so the risk going into the report today is for disappointment, especially if we get a job adds number in the mid to high 200k.
Away from the jobs report, we also get two Fed speakers: Barkin (9:15 a.m. ET) and Evans (10:15 a.m., 1:00 p.m. ET).
What’s in Today’s Report:
Stock futures are slightly higher and Treasury yields are largely steady ahead of today’s midterm elections.
Economically, the U.S. NFIB Small Business Optimism Index came in at 91.3 vs. (E) 91.8 while Eurozone Retail Sales met estimates at 0.4% but neither release is materially impacting markets this morning.
There are no additional economic reports today and no Fed officials are scheduled to speak.
In Monday’s Sevens Report we incorrectly said CPI was to be released on Wednesday but the report is due out on Thursday. We apologize for any confusion this may have caused.
Bottom line, focus will be on the midterms today which will likely result in a mostly quiet session, however, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET that could cause a move in yields and ultimately impact trading in equities.