12/14/2018
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Equities:
It was another choppy day of trading as liquidity continues to wane ahead of next week’s Fed meeting and ever present trade uncertainty with China. There has been a lack of leadership, which has been one reason gains have not been maintained. One of the former leaders, technology, has been sorely missed as the S&P 500 tech sector has lost 12% so far this quarter. Investors have moved into defensive stocks such as consumer staples and utilities. Utilities are the best performers this quarter, gaining 7.4% so far. Another bright spot has been healthcare, which is up 11% in 2018, as those companies have continued to post strong earnings. Yesterday, General Electric (GE) jumped 7.3% higher to $7.20, after JPMorgan Chase upgraded to neutral from underweight. On the day, the Dow Jones Industrials ($DJI) edged 0.3% to 24597.38, the Nasdaq Composite (COMP) lost 0.4% to 7070.33, and the S&P 500 (SPX) was down slightly to 2650.75.
Credit Markets:
The yield on the 10yr. Treasury rose for the fourth consecutive session to 2.911% from 2.908% on Wednesday. Yields were higher after the Labor Department reported that the number of workers making first time jobless claims dropped last week.
Commodities:
The monthly IEA report showed that OPEC’s crude oil output rose by 100,000 barrels a day, month to month to reach 33.03 million barrels per day in November. U.S. crude oil futures (/CL) surged 3.2% yesterday to close at $52.85.
Pre-Market:
Equity Futures (/ES) are 0.7% lower near 2630 this morning after negative economic reports in China and Europe have caused investors have fled equities. U.S. Crude oil futures (/CL) are slightly lower near $52 per barrel. 30yr. Treasury bond futures are 0.2% higher near 142’24.
Major Economic Reports:
7:30 am CT – Jobless Claims
7:30 am CT – Import and Export Prices
9:30 am CT -- EIA Natural Gas Report
10:00 am CT -- 3-Month, 6-Month Bill & 5-Yr TIPS Announcement
10:30 am CT -- 4-Week Bill & 8-Week Bill Auction
12:00 pm CT – 30-Yr Bond Auction
3:30 pm CT – Fed Balance Sheet and Money Supply
Notable Earnings:
Friday – 12/14:
Before Market: N/A
After Market: N/A
Monday – 12/17:
Before Market: N/A
After Market: ORCL, RHT
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**BOLD above indicates important and potential market-moving news and information
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12/13/2018
End to QE???
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Equities:
The S&P 500 (SPX) saw 9 of its 11 sectors press higher yesterday as encouraging trade dialogue between Washington and China brought a sigh of relief to investors eagerly awaiting any positive news to eventually end the benchmark at 2651. Multi-nationals also got a much-needed boost with 75% of all blue chips also appearing in the win column with the composite average at 24,527. The Nasdaq Composite (COMP) tacked on 1% to finish just a shade below 7100 with risk appetites cautiously increasing. Overall, volatility remained slightly above its 30 day moving average with a finishing tally still a fraction above 21.
Credit Markets:
Treasury yields have slipped below 2.9% amid the reveal of European monetary policy finally seeing drastic change. President Draghi cited “the balance of risk to the euro area had moved to the downside.” The dollar also edged higher in reaction to the weekly jobless claim figure. Auction activity will be quite busy today with both the shorter 4 and 8 week bills being offered followed up with a much longer-term 30 year bond auction.
Commodities:
Oversupply concerns continue to plague energy pricing as Crude Futures (/CL) slipped 1% yesterday while still managing to maintain its posture above $50 a barrel which may be tested anew today. A freshly published contradictory report indicates that OPEC producing countries reached over 33 million barrels a day in November with Saudi Arabia stretching to all-time highs in excess of 11 million barrels pulled from the ground daily which casts doubts on real constraint leading into 2019.
Pre-Market:
Equity Futures (/ES) have continued to swing between both gains and losses this morning with modest improvement as of this writing as investors digest various data points. Weekly Jobless claims just fell to a 12 week low as labor markets continue to tighten undershooting estimates by nearly 10%. Import prices digressed by 1.6%-outpacing its 1% estimate primarily off cheaper energy prices coming in the month of November. Tech is showing some signs of positive momentum this morning with nearly a 0.5% increase in Nasdaq 100 (/NQ) futures after Ciena Corp. (CIEN) topped both revenue and earnings expectations. European markets are also reacting to a just completed ECB meeting which sees interest rates unchanging thru at least mid-2019 while finally ending a longstanding asset purchase program which was essentially instituted in the aftermath of the Financial Crisis over a decade ago.
Major Economic Reports:
7:30 am CT – Jobless Claims
7:30 am CT – Import and Export Prices
9:30 am CT -- EIA Natural Gas Report
10:00 am CT -- 3-Month, 6-Month Bill & 5-Yr TIPS Announcement
10:30 am CT -- 4-Week Bill & 8-Week Bill Auction
12:00 pm CT – 30-Yr Bond Auction
3:30 pm CT – Fed Balance Sheet and Money Supply
Notable Earnings:
Thursday– 12/13:
Before Market: CIEN, SODA
After Market: ADBE, COST
Friday – 12/14:
Before Market: N/A
After Market: N/A
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**BOLD above indicates important and potential market-moving news and information
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12/12/2018
Wall of Voodoo
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Equities:
U.S. equity markets opened over 1% higher yesterday after reports surfaced that China agreed to reduce tariffs on U.S. automobiles to 15%, down from the current 40%. The Dow Jones Industrials ($DJI) climbed as much as 368 points in early trading. The rally was short lived after President Trump had a meeting with top Democrats where he threatened to shut down the government if Congress would not approve funding for a border wall. S&P 500 futures (/ES) moved into negative territory and at one point were 0.8% lower near 2621. Apple (AAPL) fell 0.6% as the company tried to sway a Chinese court to reconsider its recent ban on selling older iPhones. Overseas, the Stoxx Europe 600 reversed course from the prior day and rose 1.5%. Japan’s Nikkei Stock Average fell 0.3%. After all of yesterday’s volatility, the Dow Jones Industrials ($DJI) fell 0.2% to 24370.24, the Nasdaq Composite (COMP) added 0.2% to 7031.83, and the S&P 500 (SPX) was down less than 0.1% to 2636.78.
Credit Markets:
The rate on the 10 year Treasury yield fell slightly yesterday to 2.881% from 2.856% on Monday. Treasuries were relatively quiet over the past two sessions, considering the price gains of the past month. Investors are awaiting next week’s Fed meeting for clues on where interest rates may be heading. Until recently, the Fed was penciled in for three rate hikes next year. Futures markets are now implying there is a 50% chance that the central bank will raise even once next year.
Commodities:
U.S. crude oil futures (/CL) rebounded yesterday, after recent volatility and a supply outage at a major Libyan oil field. January futures rose 1.3% to $51.65 per barrel. U.S. crude oil inventories are due out today at 9:30am CT. Estimates are looking for U.S. stockpiles to have decreased by 2.8 million barrels during the week ended December 7th .
Pre-Market:
U. S. equity futures are higher this morning after Asian markets were mostly higher overnight, with Japan up over 2%. The release of the Huawei CFO on bail in Canada, is being seen as positive by investors. U.S. Crude oil futures are 1.4% higher near $52.30 per barrel, following a big stockpile draw in the API data released after the close yesterday. S&P 500 futures (/ES) are up over 1% higher near 2671, after the WSJ reported that China is promising greater access for foreign companies.
Major Economic Reports:
6:00 am CT -- MBA Mortgage Applications
7:30 am CT – CPI
9:00 am CT -- Atlanta Fed Business Inflation Expectations
9:30 am CT -- EIA Petroleum Status Report
12:00 pm CT-- 10-Yr Note Auction
1:00 pm CT -- Treasury Budget
Notable Earnings:
Wednesday – 12/12:
A.M.-- N/A
P.M.-- N/A
Thursday – 12/13:
A.M.-- CIEN, SODA
P.M -- ADBE, COST
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**BOLD above indicates important and potential market-moving news and information
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12/11/2018
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Equities:
The market is setting up for a healthy open with S&P 500 futures (/ES) surging by nearly 30 points currently after Monday’s impressive late day turnaround from perilous lows. European Bourses are presently enjoying an average 2% jump after ignoring Prime Minister May’s fragile Brexit negotiations after delaying a key vote in yesterday’s session. Asia is also seeing mixed conditions with Japan bucking the trend to the downside despite a better mood coming from China. Volatility saw a sharp decline late day Monday with the VIX edging 5% lower to $21.59 by the close.
Credit Markets:
The rate on the 10 year Treasury yield is showing a slight rise near 2.868% after a 6th straight session of declines were cemented as investors have flocked towards the safety of bonds amid the recent market turmoil. Today’s session may finally see a reverse to the recent narrative should equities actually retain their early strength.
Commodities:
Gold Futures (/GC) are seeing better prospects near its 200 dma as the recent chatter around the accelerated pace of the Fed to hikes rates beginning to fade with signs of a slowing economy. Shares of the precious metal are now near $1252 an ounce which hasn’t been since the July timeframe. Energy prices are also taking a cue from equities with nearly a 2% improvement this morning to see crude futures (/CL) just below $52 a barrel. An attempt to finally right the ship from the recent lows near $49 has caused major concerns among the globe’s top producers including Russia which has agreed in earnest to reduce production into next year.
Pre-Market:
Producer Price Index (PPI) results saw a modest 0.1% improvement over the month of November which was better than the neutral expectation. Trade tensions between China have eased somewhat overnight as higher level talks continue with signs of some potential concessions to be made around pivotal auto tariffs. Fed speak has been noticeably absent with a blackout period now in effect ahead of next week's much anticipated meeting.
Major Economic Reports:
5:00 am CT – NFIB Small Business Optimism Index
7:30 am CT – PPI-FD
7:55 am CT – Redbook
Notable Earnings:
Tuesday– 12/11:
Before Market: N/A
After Market: AEO, PLAY
Thursday– 12/12:
Before Market: N/A
After Market: N/A
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**BOLD above indicates important and potential market-moving news and information
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TradeWise – The Week Ahead
December 10, 2018
U.S. equities rose early in the session on Friday, but steadily declined throughout the session after investors were not impressed by the latest jobs report. The data showed wage growth, but indicated that U.S. employers slowed their hiring in November. Non-farm payrolls were a seasonally adjusted 155,000 in November, which capped off the slowest three month growth rate in a year. The selloff accelerated after the Trump administration reiterated their tough stance on trade negotiations with China. Companies that conduct business and sell goods overseas, such as technology companies Intel (INTC) and Nvdia (NVDA) and heavy machinery companies Deere (DE) and Caterpillar (CAT), all declined more than 3%. On Friday, the Nasdaq Composite (COMP) fell 3% to 6969.25, the Dow Jones Industrials ($DJI) lost 2.2% to 24388.95, and the S&P 500 (SPX) dropped 2.3% to 2633.08. This left all three of the major indices down more than 4% for the week.
Oil Prices (/CL) stabilized last week after Russia’s Vladimir Putin and Saudi Crown Prince Mohammad bin Salman agreed with OPEC to slash production by a larger than expected 1.2 million barrels per day. U.S. Crude oil futures climbed by more than 5% following the announcement, and finished the week near $52 per barrel. U.S. Treasuries rose on Friday, extending their recent rally to six consecutive sessions with the yield on the 10yr. Treasury Note (TNX) solidly below 3%. The yield on the 10yr. note settled at 2.85% on Friday, versus 3.01% a week ago.
The focus today will be on the Huawei CFO bail hearing in Canada, the Macron speech in France, and the U.S. JOLTS number for October, out at 9am CT. As of this writing, U.S. Crude oil futures (/CL) are down over 2% near $51 per barrel. S&P 500 future (/ES) are 0.2% lower and trading near 2630.
Major Earnings for the Upcoming Week:
Monday:
A.M. – N/A
P.M. – SFIX
Tuesday
A.M. – N/A
P.M. – AEO, PLAY
Wednesday
A.M. – N/A
P.M. – N/A
Thursday
A.M. – CIEN, SODA
P.M. – ADBE, COST
Friday
A.M. – N/A
P.M. – N/A
Economic Releases (12/10 - 12/14):
Monday:
9:00 am CT – JOLTS
10:30 am CT – 3-Month & 6-Month Bill Auction
11:30 am CT -- TD Ameritrade IMX
Tuesday:
5:00 am CT – NFIB Small Business Optimism Index
7:30 am CT – PPI-FD
7:55 am CT – Redbook
Wednesday:
6:00 am CT -- MBA Mortgage Applications
7:30 am CT – CPI
9:00 am CT -- Atlanta Fed Business Inflation Expectations
9:30 am CT -- EIA Petroleum Status Report
12:00 pm CT-- 10-Yr Note Auction
1:00 pm CT -- Treasury Budget
Thursday:
7:30 am CT – Jobless Claims
7:30 am CT – Import and Export Prices
9:30 am CT -- EIA Natural Gas Report
10:00 am CT -- 3-Month, 6-Month Bill & 5-Yr TIPS Announcement
10:30 am CT -- 4-Week Bill & 8-Week Bill Auction
12:00 pm CT – 30-Yr Bond Auction
3:30 pm CT – Fed Balance Sheet and Money Supply
Friday:
7:30 am CT – Retail Sales
8:15 am CT – Industrial Production
8:45 am CT – PMI Composite FLASH
9:00 am CT – Business Inventories
12:00 pm CT – Baker-Hughes Rig Count
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*BOLD above indicates important and potential market-moving news and information
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