3/15/2019
So, why are we up?
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Equities:
U.S. stocks halted a three-day rally, as the Brexit saga rumbles on. The S&P 500 (SPX) spent most of the session between gains and losses in thin trading, before closing down slightly on the close. News that a meeting to end the trade war with China would not happen this month weighed on sentiment. The S&P 500 index had jumped 2.5 percent in the prior three days pushing past the 2,800 level, before giving back less than 0.1 percent yesterday. The Dow Jones Industrial Average was up 20 points, or 0.1% to 25721, while the Nasdaq Composite was up 0.1%. All three major averages are at least 1% higher so far this week, after suffering their worst week since December. In Europe, the Stoxx Europe rose 0.8% after U.K. lawmakers late Wednesday ruled out a no-deal exit from the European Union. Lawmakers are now likely to vote in favor of a further proposal to request a delay in Britain’s scheduled exit date beyond March 29. In addition, Chinese economic data weighed on investor sentiment. Official data showed that industrial output there slowed more than expected in January and February, adding to concerns that the world’s second-biggest economy is slowing down. The Shanghai Composite slid 1.2% while stocks in Hong Kong and Japan were mostly flat.
Credit Markets:
U.S. bond prices edged lower, with the U.S.10-year note yield settling at 2.628%. New-home sales fell 6.9% in January from a month earlier to a seasonally adjusted annual rate of 627k versus an expected rate of 607k The rate in December was revised up to 652k from an initial estimate of 621k
Commodities:
U.S. Oil prices (/CL) rose to their highest level since November 12th, closing up 0.5% to $58.61 per barrel. U.S. sanctions on Venezuelan and Iranian oil are beginning to put a squeeze on global supplies, making it increasingly difficult for those countries to export any of their crude. Meanwhile, Gold (/GC) declined 0.8% to $1,298.68 an ounce, with a rally in the U.S. dollar adding to pressure on dollar denominated metal prices.
Pre-Market:
As investors continue to monitor the U.S. and China trade negotiations, U.S. equities are looking up this morning, with S&P 500 future (/ES) up over 0.3% in pre-market trading. On the economic number front, the Empire State Manufacturing number fell to a reading of 3.7 in March from 8.8 in the prior month. The lowest level in almost two years. Facebook (FB) announced the departure of two key executives, with the stock set to open 1.9% lower. Oracle (ORCL) reported earnings last night, beating estimates by 3 cents, however the shares are down over 3.0% in pre-market trading, trading near $51.25. Tesla (TSLA) unveiled its Model Y crossover SUV last night, with a starting price of $47,000. The stock is down 2.0%, in pre-market, trading near $283.
Major Economic Reports:
Quadruple Watching
7:30 am CT – Empire State Mfg Survey
8:15 am CT – Industrial Production
9:00 am CT – Consumer Sentiment
9:00 am CT – JOLTS
12:30 pm CT – Baker-Hughes Rig Count
Notable Earnings:
Friday – 3/15:
A.M. – N/A
P.M. – N/A
Monday – 3/18:
A.M. – LL, OSTK
P.M. – TLRY
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**BOLD above indicates important and potential market-moving news and information
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3/14/2019
Same Old Song and Dance…
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Equities:
Equities (/ES) have slipped somewhat overnight after topping fresh 2019 highs in all three major benchmarks in yesterday’s session. The S&P 500 (SPX) skyrocketed past the 2800 level on Wednesday which may act as a line in the sand going forward. Chinese industrial output saw the brakes applied in a big way with growth slipping to a nasty 17 year low thus far in 2017 dragging the Shanghai down in excess of 1%. Further pressure came as Presidents Trump and Xi both hinted at no imminent plans for a trade deal which was expected by month end. The Japanese Nikkei also surrendered gains to finish flat ahead of a key BOJ meeting tomorrow which has recently seen a cutback in stimulus spending. Weekly unemployment filings just jumped 6K to 229,000 which was slightly higher than anticipated although bringing some relief after the recently baffling anomaly of the February jobs report. The Brexit conundrum continues at full speed with an extension vote now expected which would still need to be agreed to from all 27 countries in the European Union as Theresa May’s popularity wanes.
Credit Markets:
The credit complex is seeing the 10 year yield jump near 2.62% despite the ugly Chinese production data. New home sales will be looking for a 622K annualized number of single family homes to notch a third straight beat as the busy spring buying season is set to launch.
Commodities:
Gold Futures (/GC) have succumbed to the $1300 an ounce level as the U.S. dollar rips higher. Meanwhile, oil (/CL) has topped four month highs at $58.5 after yesterday’s -3.9 million barrel inventory report signaled indications of tighter supply on the horizon.
Pre-Market:
U.S. Import prices rose 0.6% in the month of February which doubled the expectation which can mainly be attributed to higher fuel prices. Tesla (TSLA) is expected to unveil its Model Y SUV later today which should begin production sometime in 2020. Investors remain captivated around the ongoing Boeing (BA) saga as any new developments on the grounding of the 737 Max will likely create more movement indicative of yesterday’s $40 intra-day swing. On the earnings front, a few stragglers including Oracle (ORCL) will be on display after the close which is currently projecting a +/- $2.2 move around the event.
Major Economic Reports:
7:30 am CT –Jobless Claims
7:30 am CT – Import and Export Prices
9:00 am CT – New Home Sales
9:30 am CT – EIA Natural Gas Report
3:30 pm CT – Fed Balance Sheet
3:30 pm CT – Money Supply
Notable Earnings:
Thursday – 3/14:
A.M. – DG
P.M. – ADBE, AVGO, JBL, ORCL, ULTA
Friday – 3/15:
A.M. – N/A
P.M. – N/A
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**BOLD above indicates important and potential market-moving news and information
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3/13/2019
Grounded.
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Equities:
Healthcare and energy shares led U.S. equities higher, after new data showed inflation pressures remain under control. This helped reassure investors that the Federal Reserve would hold off on further rate increases for the time being. The consumer price index (CPI) rose a seasonally adjusted 0.2% in February, which was in line with expectations. The S&P 500 (SPX) slipped in the last hour of trading ahead of a critical Brexit vote, but managed to mark its second consecutive day of gains. Industrials were the biggest laggards yesterday, pulled lower by Boeing (BA). The aerospace giant fell an additional 6.1% to $375.41, after several countries ordered the company to ground their 737 MAX airplane. Rising crude oil prices helped lift S&P 500 energy companies 0.6%, while the health care sector gained 0.7%. The S&P 500 (SPX) has gained 11% since the beginning of the year despite no trade deal between the U.S. and China. On the day, the Dow Jones Industrials ($DJI) lost 0.4% to 25554.66, the Nasdaq Composite (COMP) gained 0.4% to 7591.03, and the S&P 500 (SPX) rose 0.3% to 2791.52.
Credit Markets:
U.S. Treasury bond prices rose yesterday after an in line CPI number, indicated that the Fed would be inclined to keep rate increases on hold. The yield on the 10yr. Treasury note settled lower at 2.605% from 2.643% on Monday. Its lowest level in more than two months.
Commodities:
Tightening oil supplies in Venezuela, and the prospect that OPEC would continue cutting output through the end of the year edged oil prices higher. U.S. crude oil futures (/CL) settled 0.1% higher near $56.87 per barrel.
Pre-Market:
Durable goods orders rose in January for the third consecutive month, and the producer price index inched up 0.1%. Economists were looking for a 0.2% increase, which showed that inflation pressures remain muted. Shares of Boeing (BA) are trading 1.5% higher near $381 after trading as much as 2.2% lower earlier in the morning. As of this writing, U.S. crude oil futures (/CL) are 1.5% higher near $57.75 per barrel and S&P 500 futures (/ES) are 0.3% higher near 2806.
Major Economic Reports:
6:00 am CT –- MBA Mortgage Applications
7:30 am CT – Durable Goods Orders
7:30 am CT – PPI-FD
9:00 am CT – Atlanta Fed Business Inflation Expectations
9:00 am CT – Construction Spending
9:00 am CT – E-Commerce Retail Sales
9:30 pm CT – EIA Petroleum Status Report
12:00 pm CT – 30-Yr Bond Auction
Notable Earnings:
Wednesday– 3/13:
A.M. – N/A
P.M. – N/A
Thursday – 3/14:
A.M. – DG
P.M. – ADBE, AVGO, JBL, ORCL, ULTA
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**BOLD above indicates important and potential market-moving news and information
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3/12/2019
May Day??…
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Equities:
U.S. Equities (/ES) appear to be catching their breath somewhat this morning with only a marginally higher open indicated after starting out the week on a rampage. A notable purchase in the tech space yesterday along with a solid upgrade of Apple (AAPL) ahead of a key March 25th event helped to propel markets higher after last week’s extended slump. The S&P 500 (SPX) continues to inch its way back towards the 2800 mark as a sign of strength. The Nasdaq Composite (COMP) is also back within reach of March highs with risk appetites growing near 7558. Volatility has continued to falter this week now nearing lows at the $14 handle.
Credit Markets:
The yield on the 10 year is hovering around 2.634% with only a slight reaction falling from day highs after the CSI report showed little change in the inflationary environment last month. Today’s Treasury auction is set to release $24 Billion worth of notes mid-day.
Commodities:
Crude continues to march higher with a 0.44% improvement near $57.5 amid further Venezuelan production issues with a sever power outage. Gold Futures (/GC) are teetering around the $1300 an ounce level with the confusion around Brexit helping to draw some interest for various business trapped in the periphery.
Pre-Market:
Asian markets have roared higher overnight in reaction to the earlier U.S. move with 1.25% gains coming across the board in the region. Europe is seeing slightly different results with a mixed bag ahead of a critical Brexit vote happening later today around the inevitable withdrawal from the European Union (EU). Theresa May continues to fight approval with further legal troubles clouding any real path towards a soft landing. The Consumer Price Index (CPI) rose 0.2% in the month of February according to the Labor Department which was exactly in line with expectations as inflation remains a moot point. With the exception of Dick’s Sporting Goods disappointing results earlier, no other earnings of import are expected until Thursday.
Major Economic Reports:
5:00 am CT – NFIB Small Business Optimism Index
7:30 am CT – CPI
7:55 am CT – Redbook
12:00 am CT – 10-Yr Note Auction
Notable Earnings:
Tuesday – 3/12:
A.M.– DKS, MOMO
P.M. – N/A
Wednesday– 3/13:
A.M. – N/A
P.M. – N/A
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**BOLD above indicates important and potential market-moving news and information
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The Week Ahead
Major U.S. Indices closed out their worst week since December just ahead of the bull market’s 10th anniversary, dragged down by continuing signs of a global economic slowdown. Questions about the overall health of the U.S. complex mounted Friday after a sharp slowdown in U.S. hiring growth last month as U.S. nonfarm payrolls limped to only a seasonally adjusted 20,000 in February, missing economists’ expectations of 180,000 new jobs. The sour news sent the Dow Jones Industrial Average ($DJI), the S&P 500 (SPX) and the Nasdaq Composite (COMP) lower for a fifth straight trading session. The lack of new developments on a trade pact between the U.S. and China have investors on edge as Chinese exports plummeted last month prompting action for the Chinese Central Bank to inject liquidity. Germany also just downgraded their own GDP growth projections below 1% at a critical juncture just ahead of the final Brexit push.
Friday's declines came as Oil futures (/CL) were down $0.59, settling at $56.07 per barrel to notch a small win on the week. Overall, energy had a price range of $54.52 to $56.51 per barrel with better prospects already being indicated early this morning. Gold Prices (/GC) jumped Friday spiking above $1300 per ounce for the 1st time in a week after the jobs report was released which has since waned back under the threshold. The 10-year Treasury note is climbing slightly to 2.638% in an attempt to correct some of last week’s plummeting yield.
Economic data will surely be in the spotlight this week, after hiring in February sounded some alarms. January’s delayed retail sales report just came in much stronger than expected this morning which has pushed S&P 500 futures (/ES) up 5 points at the time of this writing. Durable goods and February’s CPI inflationary data will all take on added significance, particularly amid the mixed stream of economic data lately. Airlines and plane manufacturers are likely to be in the crosshairs after an Ethiopian Airlines Boeing 737 Max 8 crashed Sunday. Boeing (BA) is spiraling over 10% in pre-market activity which has an overweight effect on the Dow now registering a 250 point loss. There are not much on the earnings front this week with the exception of Dicks Sporting Goods (DKS) and Oracle (ORCL) later this week.
Major Earnings for the Upcoming Week:
Monday:
A.M. – N/A
P.M. – SFIX
Tuesday:
A.M.– DKS, MOMO
P.M. – N/A
Wednesday:
A.M. – N/A
P.M. – N/A
Thursday:
A.M. – DG
P.M. – ADBE, AVGO, JBL, ORCL, ULTA
Friday:
A.M. – N/A
P.M. – N/A
Economic Releases (3/11-3/15):
Monday:
7:30 am CT – Retail Sales
9:00 am CT – Business Inventories
10:30 am CT – 3-Month & 6-Month Bill Auction
12:00 pm CT – 3-Yr Note Auction
Tuesday:
5:00 am CT – NFIB Small Business Optimism Index
7:30 am CT – CPI
7:55 am CT – Redbook
12:00 am CT – 10-Yr Note Auction
Wednesday:
6:00 am CT –- MBA Mortgage Applications
7:30 am CT – Durable Goods Orders
7:30 am CT – PPI-FD
9:00 am CT – Atlanta Fed Business Inflation Expectations
9:00 am CT – Construction Spending
9:00 am CT – E-Commerce Retail Sales
9:30 pm CT – EIA Petroleum Status Report
12:00 pm CT – 30-Yr Bond Auction
Thursday:
7:30 am CT –Jobless Claims
7:30 am CT – Import and Export Prices
9:00 am CT – New Home Sales
9:30 am CT – EIA Natural Gas Report
3:30 pm CT – Fed Balance Sheet
3:30 pm CT – Money Supply
Friday:
Quadruple Watching
7:30 am CT – Empire State Mfg. Survey
8:15 am CT – Industrial Production
9:00 am CT – Consumer Sentiment
9:00 am CT – JOLTS
12:30 pm CT – Baker-Hughes Rig Count
3:00 pm CT – Treasury International Capital
*Follow us on Twitter @TradeWise
*BOLD above indicates important and potential market-moving news and information
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