7/19/19
Pre-emptive Strike!!
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Equities:
U.S. Equities (/ES) are inching towards a quarter-point lift as a clear path to a rate cut was carved out by New York Fed President Williams who’s comments called on the FOMC to “act quickly”. The S&P 500 (SPX) will attempt to re-assert itself atop the coveted 3,000 mark after falling from the perch earlier this week off mixed signals. Reportedly, successful phone dialogue with China prompted Treasury Secretary Mnuchin to hint at the return to possible face to face meetings on the horizon as the saga continues its intrigue. Japan saw a 2% windfall come in the Nikkei 225 as renewed hope around an eventual trade deal bolstered tech stocks. BOJ Governor Kuroda will be in Washington on Monday and is scheduled to speak at the International Monetary Fund as other sovereign countries try to prep for monetary loosening. The ECB will also be on display later next week with a decision on their rates expected just before Friday’s U.S. GDP result.
Credit Markets:
U.S. Treasury yields are rising slightly above the 2.0% threshold early on despite yesterday’s ultra-dovish comments by FOMC member Williams around “pre-emptive cuts to prolong the expansion.” Financials nearly tacked on 1% yesterday with American Express (AXP) likely dictating today’s follow-up in the space after sharing mixed earnings results moments ago.
Commodities:
Oil Futures (/CL) are rising by nearly 1.5% after reports surfaced that the U.S. Navy downing an Iranian manned drone in the highly contested strait of Hormuz as. The move will do little to erase the biggest weekly decline in seven weeks however as a global supply glut remains firmly intact. Gold Futures (/GC) are set to end the week at its highest mark since 2013 at $1436 an ounce as the greenback weakens off the reality of a potential 50 basis point rate cut.
Pre-Market:
Consumer Sentiment will be making another appearance this morning with a 98.6 reading expected, indicating a healthy confidence in current economic conditions. Canada just reported a horrible retail sales number earlier which keeps any type of positive trend still elusive. Shares of Microsoft (MSFT) are climbing by 3% after beating on both top and bottom line estimates thanks in a large part to their Azure cloud offering. Volatility appears to be simmering after an early rise in yesterday’s session in the CBOE Volatility Index (VIX) eventually settled near the low of the day just above 13.
Major Economic Reports:
9:00 am CT – Consumer Sentiment
10:05 pm CT – FOMC member Bullard speaks
12:00 pm CT – Baker-Hughes Rig Count
3:30 pm CT – FOMC member Rosengren speaks
Notable Earnings:
Friday-7/19
A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC
P.M. – N/A
Monday-7/22
A.M. – GNC,HAL,
P.M. – AMTD, CE, CR, STLD, WHR, ZION
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**BOLD above indicates important and potential market-moving news and information
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7/18/2019
Earnings Cracks…
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Equities:
Major U.S. equity indices fell for the second straight day, as some of the latest earnings reports have exposed some potential growth concerns. A cloudy economic picture and the ongoing trade dispute between the U.S. and China has increased worries for corporate executives. In the industrial sector, CSX fell 10% to $71.38 after economic uncertainty pushed the company to cut its annual earnings outlook. This weighed on other railroad stocks, sending Norfolk Southern (NSC) down 7.5% and pushed Union Pacific (UNP) 6.1% lower. Bank of America’s (BAC) results were helped by its consumer division, but the company warned that it could be adversely affected by any Fed interest rate cuts. The mega bank rose 0.7% in yesterday’s session to close at $29.19. On the day, the Dow Jones Industrials ($DJI) lost 0.4% to 27219.85, the Nasdaq Composite (COMP) fell 0.5% to 8185.21, and the S&P 500 (SPX) slipped 0.7% to 2984.42.
Credit Markets:
With some sovereign debt yields in Germany, France and the Netherlands falling below zero, overseas investors have increased their U.S. Treasury holdings. Foreign investors increased their holdings of U.S. government debt by 1.6% in May, the most in eight years. The yield on the 10yr. Treasury Note (TNX) settled lower at 2.059% yesterday, from 2.124% on Tuesday.
Commodities:
Oil prices fell to their lowest level in almost two weeks, as U.S. crude oil stockpiles saw a smaller than expected weekly decline and gasoline stockpiles saw significant gains. U.S. crude oil futures (/CL) fell1.5% yesterday to settle at $56.78 a barrel. Gold (/GC) rose 0.9% to $1,421.30 a troy ounce.
Pre-Market:
Netflix (NFLX) reported earnings after the close yesterday. The video streaming service posted a drop in its earnings per share and steep drop in its paid net memberships additions which sent the shares tumbling by 10% or almost $40 lower. The options market was predicting a $22 move in the shares, which was in line with the 2yr. average move. The shares are currently trading near $324 in the pre-market. As of this writing, U.S. crude oil futures (/CL) are 0.4% lower near $56.60 a barrel, and S&P 500 futures (/ES) are 0.1% lower near 2982.
Major Economic Reports:
7:30 am CT – Jobless Claims
7:30 am CT – Philadelphia Fed Business Outlook Survey
9:00 am CT – Leading Indicators
9:30 am CT – EIA Petroleum Status Report
10:00 am CT – 2-Yr Note, 5-Yr Note & 7-Yr Note Announcement
12:00 pm CT – 10-Yr TIPS Auction
1:15 pm CT – FOMC member Williams speaks
3:30 pm CT – Money Supply
3:30 pm CT – Fed Balance Sheet
Notable Earnings:
Thursday – 7/18:
A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL
P.M. – COF, ETFC, SKX, SWKS
Friday – 7/19:
A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC
P.M. – N/A
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**BOLD above indicates important and potential market-moving news and information
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7/17/2019
Which way do we go?
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Equities:
Stocks fell on Tuesday, led lower by shares of energy and technology companies, while bank earnings failed to generate much excitement. The session began with very little price action. The Dow Jones Industrial Average ($DJI) set a new all-time high in early going amid positive reactions to earnings reports from JPMorgan Chase (JPM), which was up 1% on the day and Goldman Sachs (GS) up nearly 2%. Wells Fargo (WFC) and Johnson & Johnson (JNJ) beat earnings estimates, but their shares were down 3% and 1.6% respectively. Price action picked up later in the day after President Trump said that there is still a long way to go with China on trade. This helped drive stocks lower for the session. On the day, the Dow Jones Industrial Average ($DJI) lost 0.1% to 27,335.63, the S&P 500 (SPX) fell 0.3% to 3004.04, while the Nasdaq Composite slipped 0.4% to 8222.79.
Credit Markets:
U.S. Treasury prices were weaker yesterday, after the June retail sales report checked in stronger than expected and seemingly diminished the prospect of a 50-basis points rate cut at the end of July FOMC meeting. Total retail sales were up 0.4% in June, following a downward revised 0.4% increase (from 0.5%) in May. The 10-year yield increased 3 basis points to 2.124%, its highest since June 12.
Commodities:
U.S. crude oil futures (/CL) were trading higher most of the day, but tumbled just before the session ended, closing down more than 3% to $57.62 a barrel. President Donald Trump and Secretary of State Mike Pompeo said that discussions with Iran were advancing over the Middle Eastern country’s nuclear program. Oil prices have been trading higher in recent weeks over the fear of some type of military confrontation between Iran the U.S. or its allies amid the U.S. sanctions over Iran’s nuclear program.
Pre-Market:
Wall Street is nearly unchanged in pre-market trading , as a wave of quarterly reports from top tier companies such as Netflix (NFLX) and IBM (IBM), could fuel more stock gains or put an end to the market’s recent strength. On the earnings front this morning, United Airlines (UAL) are trading 0.1% higher in pre-market after lifting full-year guidance despite the fact it is trimming extra flights this year due to the ground of Boeing’s 737 Max jets. Bank of America (BAC) reported better than expected earnings, but said net interest margin, declined. Shares of the retail bank initially fell 1% in pre-market trading before reversing course and are now unchanged. Shares of Qualcomm (QCOM) are 5% higher after the company gained support from DOJ, Energy, and Defense Departments to pause antitrust ruling enforcement. As of this writing, U.S. crude oil futures (/CL) are up near 1.0% to $58.20 a barrel , while the S&P futures (/ES) are slightly lower near 3006.
Major Economic Reports:
6:00 am CT – MBA Mortgage Applications
7:30 am CT – Housing Starts
9:30 am CT – EIA Petroleum Status Report
1:00 pm CT – Beige Book
Notable Earnings:
Wednesday– 7/17:
A.M. – ABT, BAC, BK, PNC, USB
P.M. – AA, EBAY, IBM, KNI, NFLX, URI
Thursday– 7/18:
A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL
P.M. – COF, ETFC, SKX, SWKS
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**BOLD above indicates important and potential market-moving news and information
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7/16/2019
‘Tis the Season
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Equities:
U.S. Equities (/ES) appear to be somewhat subdued again this morning after a string of vanilla flavored earnings fail to prompt much action in either direction. Yesterday saw a mild start to the week with the S&P 500 (SPX) barely managing a positive close at 3014 off extremely low volume. Small caps were the only major benchmark to close lower with a 0.52% retreat to end at 1561. The largest bank by assets, JP Morgan (JPM) just reported both top and bottom line estimates that beat the street although projecting a lowered interest forecast has the shares treading water just ahead of the open. Europe is pressing slightly higher across the board as a showdown develops for Theresa May’s replacement and the implications surrounding the impeding Oct Brexit deadline. Asia is showing more vulnerability after Japan opened lower from an extended weekend holiday to fail nearly 1%. China also suffered a minor loss with no real momentum building on any type of trade resolution with the U.S. The CBOE Volatility Index (VIX) will be looking for a 7th straight contraction near 12.5 as the summer doldrums give little reason for traders to seek protection ahead of the FOMC Meeting at the end of July.
Credit Markets:
The yield on 10 year Treasuries continues its about-face with a climb back to 2.132% off the strong retail reveal. Eyes will be focused on Fed Chair Powell later today who is scheduled to speak at a forum in Paris as the month-end Fed meeting draws closer with its accompanied possibility of a rate cut. The Bank of Australia also indicated its appetite for a rate adjustment if necessary overnight as the globe furthers its addiction towards monetary dependency to stimulate growth.
Commodities:
Oil prices (/CL) are falling in line with the broader markets with a flat open near the $59.50 mark as platforms in the Gulf of Mexico return online after nearly 75% were halted as a precaution ahead of Hurricane Barry. Gold Futures (/GC) are slipping off the strong retail beat, but remain firmly above the $1400 an ounce level in an apparent basing pattern.
Pre-Market:
Retail sales just came in 4x the estimated 0.1% increase for the month of June to help shake off 3 of the last four disappointing months. U.S. import prices dropped to a six month low with cheaper fuel as the major catalyst. Industrial Production snapped 4 consecutive missed expectations last month with a strong showing as a 0.1% increase is projected later this morning. Some of the biggest technology firms will be on the hot seat over the next few days with a hearing around anti-trust issues on Capitol Hill. Earnings will continue to ramp up with United Airlines (UAL) expected after today’s close. Headliners such as: Bank of America (BAC), International Business Machines (IBM), and Netflix (NFLX) all await their fate in tomorrow’s session which will likely help dictate sentiment for the remainder of the month with lowered expectations.
Major Economic Reports:
7:30 am CT – Retail Sales
7:30 am CT – Import and Export Prices
7:55 am CT – Redbook
8:15 am CT – Industrial Production
9:00 am CT – Business Inventories
9:00 am CT – Housing Market Index
12:00 pm CT –Fed Char Powell speaks
2:30 pm CT –FOMC Member Evans speaks
3:00 pm CT – Treasury International Capital
Notable Earnings:
Tuesday – 7/16:
A.M.– GS, JNJ, JPM, SCHW, WFC
P.M. – CSX, CTAS, UAL
Wednesday– 7/17:
A.M. – ABT, BAC, BK, PNC, USB
P.M. – AA, EBAY, IBM, KNI, NFLX, URI
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**BOLD above indicates important and potential market-moving news and information
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July 15, 2019
The Week Ahead
Last Friday, the Nasdaq Composite (COMP), the Dow Jones Industrials ($DJI) and the S&P 500 (SPX) all made new closing highs. July has gotten off to a good start with the three major indices all up at least 2.4% for the month so far. Last week, Fed Chairman Powell’s comments before Congress indicated that he could cut interest rates as soon as the end of the month. Investors took this as a positive sign for equities, and moved more money into stocks. Market positivity along with a tropical storm in the Gulf of Mexico helped send U.S. crude oil futures (/CL) 4.5% higher on the week, and above $60 a barrel. The rise in oil was a boost for the energy sector, making it the best performer in the S&P 500. Up to this point, the rise in stocks has been broad based. After reaching lows not seen since November 2016, Treasury bond yields were up last week after data showed a greater than expected increase in inflation. In addition, last Friday, Eurozone industrial production showed a sharp rise in the month of May. Investors seem to be counting on a rate cut, but these latest inflationary numbers might throw a wrench in their plans.
This week will mark the start of Q2 earnings and some important economic numbers. Earnings season will kick off with some of the larger banks, Citigroup (C), Goldman Sachs (GS), Wells Fargo (WFC) and Morgan Stanley (MS) all reporting this week. It will be interesting to see how the banks are navigating the current low interest rate environment. On the tech front, International Business Machines (IBM) and Netflix (NFLX) will both report on Wednesday after the close. As for economic numbers, U.S. retail sales for June will be released on Tuesday morning and University of Michigan consumer confidence numbers will be out on Friday morning.
Major Earnings for the Upcoming Week (7/15-7/19):
Monday:
A.M. – C
P.M. – N/A
Tuesday:
A.M.– GS, JNJ, JPM, SCHW, WFC
P.M. – CSX, CTAS, UAL
Wednesday:
A.M. – ABT, BAC, BK, PNC, USB
P.M. – AA, EBAY, IBM, KNI, NFLX, URI
Thursday:
A.M. – MS, MTB, NUE, PM, PPG, UNH, UNPL
P.M. – COF, ETFC, SKX, SWKS
Friday:
A.M. – AXP, BLK, CLF, KSU, SLB, SYF, VGC
P.M. – N/A
Economic Releases (7/15-7/19):
Monday:
7:30 am CT – Empire State Mfg Survey
7:50 am CT – FOMC member Williams speaks
Tuesday:
7:30 am CT – Retail Sales
7:30 am CT – Import and Export Prices
7:55 am CT – Redbook
8:15 am CT – Industrial Production
9:00 am CT – Business Inventories
9:00 am CT – Housing Market Index
3:00 pm CT – Treasury International Capital
Wednesday:
6:00 am CT – MBA Mortgage Applications
7:30 am CT – Housing Starts
9:30 am CT – EIA Petroleum Status Report
1:00 pm CT – Beige Book
Thursday:
7:30 am CT – Jobless Claims
7:30 am CT – Philadelphia Fed Business Outlook Survey
9:00 am CT – Leading Indicators
9:30 am CT – EIA Petroleum Status Report
10:00 am CT – 2-Yr Note, 5-Yr Note & 7-Yr Note Announcement
12:00 pm CT – 10-Yr TIPS Auction
1:15 pm CT – FOMC member Williams speaks
3:30 pm CT – Money Supply
3:30 pm CT – Fed Balance Sheet
Friday:
9:00 am CT – Consumer Sentiment
10:05 pm CT – FOMC member Bullard speaks
12:00 pm CT – Baker-Hughes Rig Count
3:30 pm CT – FOMC member Rosengren speaks
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*BOLD above indicates important and potential market-moving news and information
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