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China Cut Reserve Requirements

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China Cut Reserve Requirements: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • China Cut Reserve Requirements.  Does that Improve Risk/Reward?

Futures are little changed following a mixed night of earnings and ahead of the ECB rate decision.

Earnings were mixed overnight with cautious TSLA guidance (TSLA down –7% pre-market). This is offsetting other solid tech results from IBM, NOW and others.

Today focus will remain on rates, data and earnings.  The key event today is the ECB meeting there is little to no chance of a rate hike or cut.  Instead, the key will be insight into when the ECB expects the first rate cut.  If it’s before the summer, that’s dovish/bullish.  If it’s after the summer that’s hawkish/bearish.

Turning to the data, there are several notable reports today. Including (in order of importance) Advanced Q4 GDP (E: 2.0%), Jobless Claims (E: 200K), Durable Goods (E: 1.0%) and New Home Sales (E: 650K). “Goldilocks” data that meets expectations is the best outcome for stocks.

Finally, earnings season rolls on and important reports today include: AAL ($0.06), LUV ($0.11), VLO ($2.95), SHW ($1.80), INTC ($0.48), V ($2.33), TMUS ($1.90), COF ($2.50).

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Why Did Stocks Drop to Multi-Month Lows?

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Why Did Stocks Drop to Multi-Month Lows? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop To Multi-Month Lows? (A New Reason)
  • Will the Election of a Speaker of the House Provide Any Relief for Investors?

Futures are solidly lower and are extending Wednesday’s losses following more disappointing earnings reports.

Earnings results this week have not been good and that continued overnight with disappointing guidance from META, WPP and Canadian Pacific (CP).

Today will be a busy day on both macro and micro economic fronts.

First, there’s an ECB Rate Decision but no hike is expected.  Economically, key reports today include, in order of importance, Jobless Claims (E: 208K), Durable Goods (E: 1.0%), Preliminary Q3 GDP (4.2%) and Pending Home Sales (-1.0%).  As has been the case, “Goldilocks” data that shows solid, but not very strong, activity will be welcomed by markets.

On the earnings front, there are multiple important reports today highlighted by AMZN ($0.58) after the close.  Other notable reports today include: UPS ($1.53), MRK ($1.94), LUV ($0.38), MA ($3.21), INTC ($0.19), and CMG ($10.46).  Bottom line, disappointing earnings are becoming a new headwind on markets and solid results today will help stabilize sentiment (while more disappointing reports will add to headwinds).

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Tom Essaye Quoted in Barron’s on April 19th, 2023

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The Dow Slips as Earnings Ramp Up

“If earnings news is not encouraging today, and yields continue to move higher over the course of the session, the selling pressure on equities is likely to continue and liable to accelerate,” wrote Tom Essaye, founder of the Sevens Report. Click here to read the full article.

Special Technical Report Coming Monday

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What’s in Today’s Report:

  • Special Technical Report Coming Monday
  • Why Did the VIX Just Hit 52 Week Lows?
  • EIA Analysis and Oil Market Update
  • Two Notable Observations from a Quiet Trading Day

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).

Earnings Season Update (What MSFT’s Results Mean for Markets)

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What’s in Today’s Report:

  • Earnings Season Update (What MSFT’s Results Mean for Markets)
  • EIA Analysis and Oil Market Update

Futures are slightly higher thanks mostly to momentum from Wednesday’s rebound and as earnings overnight were no worse than feared.

On earnings, TSLA rallied 6% after hours as Elon Musk teased more deliveries on the call in ‘23 than actual guidance, while IBM results were slightly disappointing.

Today focus will be on economic data and the key reports today are:  Durable Goods (E: 2.8%), Jobless Claims (E: 202K), Q4 ’22 GDP (E: 2.7%), and New Home Sales (E: 614K).  As has been the case through the end of ’22 and early ’23, moderation in the data, not an outright collapse, is what stocks and bonds need to extend yesterday’s rally.

On earnings, the key report today comes after the close with INTC ($0.20), while other notable reports include: V $($2.01), MA ($2.56), AAL ($1.14), JBLU ($0.19), and VLO ($7.45).

Technical Update: What Would Make This Bounce Sustainable?

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What’s in Today’s Report:

  • Technical Update:  What Would Make This Bounce Sustainable?
  • EIA Analysis and Oil Update

Futures are slightly lower following a busy night of mixed earnings reports and ahead of today’s ECB decision.

Politically, Italian PM Draghi formally resigned and there will be elections in Italy this fall, which is adding to general macro-economic uncertainty.

Earnings overnight were mixed although TSLA posted solid results and the stock rallied 3% after hours.

Today will be a busy day for economic data and earnings and the key event is the ECB Decision.  A 25 bps hike is expected although a 50 bps hike is very possible.  From a stock standpoint, markets will be hoping for a 50 bps hike because that will boost the euro and weigh on the dollar (the dollar being this high is a problem for U.S. corporate earnings).  Outside of the ECB we also get Jobless Claims (E: 240K) and Philadelphia Fed (E: -3.3).

On the earnings front, results continue to roll in and so far this season they are decidedly mixed (not good, but not materially worse than feared, either).  Some results we’re watching today include:  T ($0.59), FCX ($0.80), UNP ($2.38), COF ($5.09).

Are Financial Conditions Tightening? (The Answer Might Surprise You)

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What’s in Today’s Report:

  • Are Financial Conditions Tightening? (The Answer Might Surprise You)

Futures are modestly lower following Thursday’s reversal lower as economic data and earnings were mixed overnight.

April global flash PMIs were mixed as the EU data was solid (55.8 vs. (E) 53.9), but the UK data was soft (57.6 vs. (E) 59.0).  UK retail sales also badly missed (-1.4% vs. (E) -0.3%) and the lackluster data is weighing on European shares.

Earnings overnight were “ok” although SNAP underwhelmed investors (so expect more pressure on tech).

Today focus will be on economic data via the April Flash Composite PMI (E: 57.5) and markets will want to see stability in the data to further ward off stagflation concerns.

On the earnings front, there are only a few notable reports today (and all are in the morning):  VZ ($1.35), AXP ($2.43), SLB ($0.32).

Is Housing Starting to Roll Over?

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What’s in Today’s Report:

  • Is Housing Starting to Roll Over?
  • Oil Update and EIA Analysis

Futures are moderately higher as earnings continue to come in better than expected.

TSLA and UAL both posted better than expected earnings and UAL was very upbeat on travel spending and investors are viewing that as a positive macro-economic signal.

EU HICP (their CPI) slightly missed expectations (7.4% vs. (E ) 7.5% yoy), again hinting that inflation may be peaking.

Today will be a busy day with important Fed speak, economic data and earnings.  The key event (potentially) is Fed Chair Powell speaking this morning and while he’s not likely to drop any surprises, it’s always possible.  Economically, the key report today is the Philly Fed Manufacturing Index (E: 20.5) and markets will want to see stability in the data.  We also get Jobless Claims (E: 175K) and Fed President Bullard (1:00 p.m) but they shouldn’t move markets.

On the earnings front, notable reports today include:  T ($0.78), AAL (-$2.48), FCX ($0.88), PM ($1.48), UNP ($2.55), SNAP ($0.01), PPG ($1.13).