1/18/2019
Everybody's Working For the Weekend
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Equities:
Global equities look eager to add to yesterday’s gains of nearly 0.7% across the board as speculation around the easing of Chinese tariffs helped to fuel the push higher. Ironically, nothing concrete has been substantiated ahead of a bi-lateral meeting scheduled for later this month. Yesterday’s Job data impressed once again with lower weekly filings coming in at 213K which surprisingly reached the lowest level over the last month despite the ongoing government shutdown. A blowout Philly Fed number of 17 also helped to ease immediate concerns around productivity into the new year which have shifted investors back to a more risk-on mentality.
Credit Markets:
The 10-year Treasury currently rests near 2.763% which equates to the highest yield in nearly 3 weeks, possibly beginning to hamper the recent resurgence in home refinances should the trend continue. Recent fed-speak has hinted at a more accommodative pace ahead of the January meeting at the end of January as little reason for another hike has surfaced as of late.
Commodities:
Oil Futures (/CL) are enjoying an additional 1% jump today to push crude to $53 a barrel with a 2% improvement looking likely for the week overall. The recent surge helps to inch the product back above its 50 day average for the first time since mid-October as prospects improve. Palladium reached all-time highs overnight to extend over $1,400 an ounce which is a component used in auto manufacturing despite the recent warnings from several car makers. Gold Futures (/GC) are coming under pressure this morning somewhat with nearly a 1% reduction as the U.S. dollar inversely reaches fresh weekly highs heading into the extended weekend.
Pre-Market:
U.S. Equity Futures (/ES) are pegging a double-digit climb to chase monthly highs despite a string of major obstacles that still remain unresolved. U.S. Markets will remain shuttered on Monday which will shift all eyes to China’s fourth-quarter economic growth reporting which is broadly expected to reach its lowest levels since the global financial crisis.
Major Economic Reports:
8:05 am CT – John Williams Speaks
8:15 am CT – Industrial Production
9:00 am CT – Consumer Sentiment
12:00 pm CT – Baker-Hughes Rig Count
Notable Earnings:
Friday – 1/18:
A.M– N/A
P.M.– N/A
Monday – 1/21:
A.M. – N/A (Market Closed)
P.M – N/A
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**BOLD above indicates important and potential market-moving news and information
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1/17/2019
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Equities:
Positive earnings results from some bank stocks helped U.S. equities rise for a second consecutive session. So far, earnings results have been better than some investors had feared. Goldman Sachs (GS) and Bank of America (BAC) both rose by more than 7% after the banks reported better than expected earnings. Goldman Sachs got a boost from its merger and acquisition business, and Bank of America saw a lift from rising interest rates. United Continental (UAL) jumped 6.4% to $86.36 after the airline exceeded profit and sales projections in the latest quarter. Major indexes moved lower from their intraday highs after a report that federal prosecutors were opening a criminal investigation into China’s Huawei Technologies for stealing trade secrets from U.S. business partners. On the day, the Dow Jones Industrials ($DJI) gained 0.6% to 24207, the Nasdaq Composite (COMP) rose 0.2% to 7034, and the S&P 500 (SPX) was up 0.2% to 2616.
Credit Markets:
Traders did not show much concern over the latest struggle of Prime Minister Theresa May’s Brexit plan, which sent U.S. Treasuries slightly lower. The 10 year treasury yield (TNX) rose to 2.729% from a settlement of 2.7105 on Tuesday.
Commodities:
U.S. Crude oil prices were slightly higher, despite a bearish weekly U.S. gasoline inventory report. The data showed that U.S. gasoline inventories were at their highest level in nearly two years, amid waning demand. U.S. Crude oil futures (/CL) were 0.4% higher yesterday, to close at $52.31. Oil prices have risen 11 of the past 13 sessions.
Pre-Market:
Jobless claims were reported at 7:30 CT. Data showed that initial jobless claims fell by 3,000 to 213,000 for the week ending on January 12th. Economists surveyed were looking for 220,000 new claims. Before the bell, Morgan Stanley (MS) reported a top and bottom line miss for the fourth quarter. The bank had a big revenue miss on fixed income trading, and the shares are over 3% lower and trading near $42.80. As of this writing, U.S. Crude oil futures (/CL) are 1.7% lower near $51.70 per barrel and S&P 500 futures (/ES) are 0.2% lower near 2607.
Major Economic Reports:
7:30 am CT – Housing Starts
7:30 am CT - Jobless Claims
7:30 am CT - Philadelphia Fed Business Outlook Survey
9:30 am CT - EIA Natural Gas Report
10:30 am CT - 4-Week and 8-Week Bill Auction
12:00 pm CT - 10-Yr TIPS Auction
3:30 pm CT - Fed Balance Sheet
3:30 pm CT - Money Supply
Notable Earnings:
Thursday – 1/17:
A.M. – KEY, MS, SCHW
P.M. – AXP, NFLX
Friday – 1/18:
A.M. – KSU, SLB, VFC
P.M. – N/A
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**BOLD above indicates important and potential market-moving news and information
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1/16/2019
Bank Shot!
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Equities:
U.S. Equities (/ES) continue to climb the wall of worry as a string of favorable bank earnings have temporarily fended off other major news. Theresa May was handed a historic defeat in yesterday’s disastrous Brexit vote which will now be followed up by a vote of confidence today likely costing her a job. The result was so bad that many are now speculating the entire Brexit referendum may be completely dissolved with such a lopsided vote. Progress with a China deal continues to crawl at a snail’s pace with no meaningful concessions reported at this stage in the negotiation process. The ongoing Govt. shutdown stalemate also continues unimpeded with no viable resolution appearing anywhere on the horizon as frustration grows. Yesterday saw the Dow Jones ($DJI) snap back above 24K with a 155 point surge. Meanwhile, the S&P 500 (SPX) reclaimed an 1% advantage to end at 2610 with only industrials and materials lagging. The Nasdaq (COMP) outpaced other benchmarks by gaining an impressive 1.7% to end at 7023 thanks in big part to a Netflix (NFLX) subscription hike.
Credit Markets:
The 10 year treasury yield (TNX) has ticked up to 2.72% following the implications of the Brexit defeat. Mortgage applications surged 13.5% last week thanks to the recent relief in interest rates as some buyers return to the market after painfully slow holiday inaction. Refinances primarily drove the welcomed result with a 19% increase in new applications.
Commodities:
Energy prices (/CL) are dipping by nearly 1% this morning back near $52 a barrel over never-ending worries of slowing global demand. A weekly inventory checkpoint will be reported just after the open through the EIA to take a snapshot of recent production levels. Natural Gas (/NG) is spiking nearly 5% this morning with wider than average daily ranges occurring all week after gapping from lows with severe temperature drops anticipated for much of the country into the end of the month.
Pre-Market:
U.S. Import prices fell 1% which was less than anticipated with oil prices being the main anomaly. U.S. Equity Futures (/ES) are currently nudging higher near double-digit gains ahead of the open in response to positive banking reports up to this point. Volatility continues to contract in dramatic fashion with another 4% retraction happening today in the CBOE Volatility Index (VIX) to realize only half the value since the 36 high water mark was capped on December 26th. A small dose of Fed speak and Treasury International capital will be shared today with little variance expected. Earnings will likely continue to be the main sentiment driver throughout the remainder of the week.
Major Economic Reports:
6:00 am CT - MBA Mortgage Applications
7:30 am CT – Import and Export Prices
7:55 am CT – Redbook
9:00 am CT – Housing Market Index
9:30 am CT - EIA Petroleum Status Report
12:00 pm CT – Neel Kashkari Speaks
1:00 pm CT – Beige Book
3:00 pm CT – Treasury International Capital
Notable Earnings:
Wednesday – 1/16:
A.M– BAC, BK, BLK, CMA, GS, PNC, USB
P.M.– AA, CSX, KMI
Thursday – 1/17:
A.M. – KEY, MS, SCHW
P.M. – AXP, NFLX
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**BOLD above indicates important and potential market-moving news and information
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1/15/2019
And they’re off!
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Equities:
U.S. equities opened lower yesterday and never managed to turn around after being weighed down by less than stellar Chinese economic data. A report showed China’s exports unexpectedly slid in December, and the figures showed that uncertainty over trade and slowing global growth were beginning to take a toll on their economy. Utility companies moved lower after mounting issues related to California wildfires pushed PG&E (PCG) toward filing for bankruptcy protection by the end of the month. The shares plunged 52% to $8.38, their largest one day loss ever. Bank shares were broadly higher after Citigroup (C) kicked off the latest quarterly earnings season. The shares moved 4% higher to $58.93, after the global bank showed profitable results for the fourth quarter. On the day, the Nasdaq Composite (COMP) lost 0.9% to 6905.92, the Dow Jones Industrials ($DJI) fell 0.4% to 23909.84, and the S&P 500 (SPX) dropped 0.5% to 2582.51.
Credit Markets:
U.S. Treasuries finished mixed after soft economic data out of China and the Eurozone. The yield on the 10yr. U.S. Treasury note settled at 2.710%, and up from Friday’s close of 2.701%.
Commodities:
Forecasts of much colder weather, sent Natural Gas futures (/NG) to their biggest one day gain in two months. Nat. gas futures for February surged 16% higher to $3.5910. The natural gas market is 22% higher in 2019. After a milder than normal December and early January, prices could continue to be volatile. The Energy Information Administration (EIA) will report on gas storage on Thursday.
Pre-Market:
The Producer Price Index (CPI) figures for December were released at 7:30 CT. The data showed that producer prices fell 0.2% in December versus an expected 0.1% drop. Shares of JP Morgan (JPM) are trading over 2% lower near $98.50, after it missed earnings expectations for the first time in years. Delta Airlines (DAL) reported earnings that were in line with expectations, but missed on guidance. The shares are slightly lower near $47.60 in the pre-market. As of this writing, U.S. Crude oil futures (/CL) are 2% higher near $51.60 per barrel, Gold futures (/GC) are 0.1% higher near $1293, and S&P 500 futures (/ES) are 0.1% higher near 2583.
Major Economic Reports:
7:30 am CT – PPI-FD
7:30 am CT – Empire State Mfg. Survey
10:00 am CT – 4-Week Bill and 8-Week Bill Announcement
10:30 am CT – Neel Kashkari Speaks
12:00 pm CT – Robert Kaplan Speaks
12:00 pm CT – Esther George Speaks
Notable Earnings:
Tuesday – 1/15:
AM.– DAL, JPM, UNH, WFC
P.M. – UAL
Wednesday – 1/16:
A.M. – BAC, BK, BLK, CMA, GS, PNC, USB
P.M. – AA, CSX, KMI
*Follow us on Twitter @TradeWise
**BOLD above indicates important and potential market-moving news and information
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TradeWise – The Week Ahead
January 14, 2019
Equities (/ES) are taking a major step backwards this morning as more signs of trouble surface out of China’s manufacturing complex over the weekend. Exports dropped 4.4% with imports sliding an even worse 7.6% over the month of December signaling extensive collateral damage stemming from the mounting trade gap with the United States. Asian markets are all down nearly 1% to start out the week with the exception of the Japanese Nikkei which is up by nearly the same amount. European markets are also on edge early with a key Brexit vote expected tomorrow as Theresa May barely hangs on for her political life. The U.S. Government shutdown has now entered its 23rd day, which officially tops the record for the longest span without an immediate end in sight. The gridlock is starting to take its toll on sentiment with employment repercussions now expected to push unemployment back above 4%. Last Friday ended with little fanfare as both the Dow Jones ($DJI) and S&P 500 (SPX) slipped in tandem by less than 0.02% to the downside off light trade activity. Overall, the first full trading week of the new year saw all major benchmarks clear at least 2.5% to the good as the welcome recovery gained traction after the end of year snafu.
Earnings season kicks off in earnest with Citigroup (C) reporting a mixed result this morning after missing on revenue targets. Earning expectations have deflated somewhat as of late with expectations of growth lying closer to 11% for the upcoming quarter after multiple guidance warnings. Bellwethers such as: Delta Airlines, JP Morgan, Wells Fargo, United, Goldman Sachs, American Express, Caterpillar, and Netflix are all on deck this week which will likely set the tone for the remainder of the month. Crude Futures (/CL) are attempting to hold steady above $50 a barrel after another 1% drop was partially spurred by China’s discouraging economic checkpoint. Friday became the first daily drop in energy prices over the last 8. Gold Futures (/GC) are holding steady near $1290 an ounce today after a mammoth-sized merger was announced over the weekend to create the world’s largest gold miner in Newmont (NEM).
The yield on the U.S. Treasury is cracking back below 2.7% which also prompted a death-cross to develop on various moving averages to sound an alarm on a potential implosion. Fed speak will be rampant all week to better assess their methodology around the current conditions being in uncharted territory with several data points going unreported during the shutdown. Other key global leaders such as: ECB President Draghi, Bank of England Governor Carney, Bank of Japan President Kuroda are all slated to make scattered appearances this week which may easily influence market sentiment.
Major Earnings for the Upcoming Week:
Monday:
A.M. – C
P.M. – N/A
Tuesday:
AM.– DAL, JPM, UNH, WFC
P.M. – UAL
Wednesday:
A.M. – BAC, BK, BLK, CMA, GS, PNC, USB
P.M. – AA, CSX, KMI
Thursday:
A.M. – KEY, MS, SCHW
P.M. – AXP, CAT, NFLX
Friday:
A.M. – KSU, SLB, VFC
P.M. – N/A
Economic Releases (1/14-1/18):
Monday:
N/A
Tuesday:
8-Week Bill, 3-Yr Note, 10-Yr Note and 30-Yr Bond Settlement
7:30 am CT – PPI-FD
7:30 am CT – Empire State Mfg Survey
10:00 am CT – 4-Week Bill and 8-Week Bill Announcement
10:30 am CT – Neel Kashkari Speaks
12:00 pm CT – Robert Kaplan Speaks
12:00 pm CT – Esther George Speaks
Wednesday:
6:00 am CT - MBA Mortgage Applications
7:30 am CT – Retail Sales
7:30 am CT – Import and Export Prices
7:55 am CT – Redbook
9:00 am CT – Business Inventories
9:00 am CT – Housing Market Index
9:30 am CT - EIA Petroleum Status Report
12:00 pm CT – Neel Kashkari Speaks
1:00 pm CT – Beige Book
3:00 pm CT – Treasury International Capital
Thursday:
7:30 am CT – Housing Starts
7:30 am CT – Jobless Claims
7:30 am CT – Philadelphia Fed Business Outlook Survey
9:30 am CT – EIA Natural Gas Report
10:30 am CT –4-Week and 8-Week Bill Auction
12:00 pm CT –10-Yr TIPS Auction
3:30 pm CT – Fed Balance Sheet
3:30 pm CT - Money Supply
Friday:
8:05 am CT – John Williams Speaks
8:15 am CT – Industrial Production
9:00 am CT – Consumer Sentiment
12:00 pm CT – Baker-Hughes Rig Count
