01/16/2020 ES Trade Plan Worksheet

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Jan 162020
 

The phase one US/China trade agreement was signed yesterday committing China to purchase $200B of US goods over 2 years including agriculture and energy in exchange for the US to rollback some tariffs on goods from China.  The trade agreement also stipulates that China “enhance” protections for US intellectual property.

As a point of reference, Apple’s (AAPL) annual sales was $265B in 2018 and $260B in 2019.  So, while the phase one trade agreement is a win for balancing trade between the US and China, it’s not an economic altering “huge” deal.

Apple purchased a Seattle startup Xnor.ai who develops artificial intelligence tools for image recognition.  Look for Apple to be increasing their functionality on their iPhones and Webcams using AI in the future.

A major supplier to Apple, Taiwan Semiconductor Manufacturing (TSM) beat expectations, a healthy sign for smartphone demand.

XPO Logistics (XPO) is up over 17% premarket after announcing they would spin off their North American less-than-truckload business unit.

Earnings include MS, SCHW, BK, CSX, PRGS, and PPG.

The economic calendar includes Retail Sales and Philly Fed, Import Prices and Claims @ 8:30am ET, Business Inventories and NAHB @ 10:00am ET.  Central Bank speakers include the Fed’s Bowman @ 10:00am ET and the ECB’s new president Lagarde @ 1:00pm ET.

Volatility is slowing as the ES continues to grind higher.

Size bias is long into the 8:30am numbers on relatively light Globex volume.

 

 Posted by at 7:16 am

01/15/2020 ES Trade Plan Worksheet

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Jan 152020
 

The phase one US/China trade agreement is scheduled for a White House signature @ 11:30am ET.  Trump called it a “beautiful monster” of a deal.  In a joint statement yesterday, Mnuchin and Lightizer warned that many current tariffs on Chinese goods would not rollback.  Given China’s slowing economy, there is growing concern that China may not be able to uphold an anticipated $200B of US goods purchases the trade agreement is supposed to entail.

Apple’s (APPL) iPhone security is in the spotlight as Attorney General William Barr once again publicly is pressuring Apple to unlock cell phones for criminal investigations.  Trump chimed in with a tweet “We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements.  They will have to stop up to the plate and help our great Country, NOW!”.  Apple responded, not true, they have provided substantial assistance to investigating the Pensacola Naval Base shooting.

Earnings include GS, BAC, BLK, PNC, USB, BBT, and AA.

The economic calendar includes PPI and Empire State @ 8:30am ET, Oil @ 10:30am ET and Fed Beige Book @ 2:00pm ET.  Fed speakers include Harker @ 11:00am ET and Kaplan @ 12:00pm ET.

Volatility could pick up later today as analysts finally get to evaluate the phase one US/China trade deal to determine if it meets the expectations anticipated by the stock market bulls over the last 2 years.

No Size bias as they showed little interest during Globex.

 

 Posted by at 7:10 am

06/05/2019 ES Trade Plan Worksheet

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Jun 052019
 

Fed Chair Jerome Powell reinforced Fed’s James Bullard’s remarks that trade wars with China, Mexico, and the EU put a dark cloud over the US economy.  Powell said yesterday “as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”  Fedwatch now places the probability of a interest rate decrease at 53% for July.

Presidential candidate Sen. Bernie Sanders will be crashing Walmart’s annual meeting at the invitation of WalMart workers.  He expected to push Walmart to raise wages higher than the $11/hour minimum wage.

Earnings today include FIVE, AEO, GILL, CPB, CLDR, SFIX, MDB, and UNFI.  The economic calendar is full with focus on the 8:15am EST ADP and 10:00am EST ISM Non-Manufacturing PMI.  Also on the calendar are Final Services PMI @ 9:45am EST, Oil @ 10:30am EST and Beige Book @ 2:00pm EST.

Fed speakers include Vice-Chair Clarida @ 9:45am EST and Bowman @ 10:00am EST.  Volatility is up again due to yesterday’s Fed induced rally.  US stocks had their largest move in over 5 months.  Size bias is long into the US session open.

 

 Posted by at 6:08 am

06/04/2019 ES Trade Plan Worksheet

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Jun 042019
 

A Fed rate course reversal???  St. Louis Fed President James Bullard said yesterday that a “darkened” global trade narrative could slow the growth of the US economy, followed by a “downward policy rate adjustment may be warranted soon.”  The bulls sent US stocks up into yesterday’s cash close.

Markets will be watching Fed speak closely this morning: John Williams @ 8:30am EST and Chair Jerome Powell @ 9:55am EST.  CME futures predict a 50% chance of a rate cut in July with 2 more before 2020.  That would be quite a reversal in Fed policy…

FAANG companies are in US lawmakers’ crosshairs.  A House Judiciary committee announced a top-to-bottom review of US tech companies and the DOJ and FTC announced they would tackle large monopolistic companies such as Alphabet, Apple, Amazon, and Facebook.

Dem David Cicilline of RI said “The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today…  market power in digital markets presents a whole new set of dangers.”

In the same vein, Apple announced they will be killing iTunes and instead split music, podcasts, and TV into separate apps.  Earnings today include CRM, AMBA, GWRE, CBRL, GME, TIF, LE, HQY, and NAV.

The economic calendar is light with Factory Orders and Constructions Spending @ 10:00am EST.  Volatility continues to tick up and if Powell hints at decreasing rates, the ES could move today.  Size bias is a divergent short into Bullard’s 8:30am talk.

 

 

 Posted by at 6:19 am

04/19/2019 Good Friday Holiday

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Apr 192019
 

US stock and futures markets are closed today for Good Friday.  We’ll resume posting on Monday, April 22.  Enjoy the long weekend!

 Posted by at 5:37 am

04/17/2019 ES Trade Plan Worksheet

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Apr 172019
 

Earnings came in strong yesterday with most beating expectations.  The most notable exception was IBM who beat earnings but missed on revenue.  IBM stock is down over 2.5% premarket.  Netflix also beat but lowered forecasts for new subscribers which sent their stock down around 1%.

Qualcomm (QCOM) stock jumped over 20% yesterday and is up another 5% this morning after they announced a settlement with Apple over technology infringements.  Apple will switch to Qualcomm from Intel for their 5G technology.  A few hours after the announcement, Intel announced they were getting out of the 5G modem business.

Earnings focus today include MS, PEP, AA, ABT, USB, BK, LVS, and TXT.

OPEC is holding their bi-annual meeting today.  Economic data includes Trade @ 8:30am EST, Inventories @ 10:00am EST, Oil @ 10:30am EST, and the Fed’s Beige Book @ 2:00pm EST.  The Fed’s Bullard speaks @ 12:45pm EST.

Volatility continues to contract as the bulls try to push higher.  Volatility is most likely to increase to the downside.  Reaction to earnings will set today’s tone.  Like yesterday, Size bias is a divergent short going into the US session open.

 

 Posted by at 6:48 am

12/04/2018 ES Trade Plan Worksheet

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Dec 042018
 

Confusion and doubt are creeping into the markets over exactly what was accomplished during Trump and China’s Xi Jinping over Sat dinner’s trade talks.  The WH economic advisor Larry Kudlow tried to detail specifics from the meeting but only conflicted with trade talk information released by the Chinese.  The start date of the 90-day truce is in question as Kudlow says it’s Dec 1 and China said it was Jan 1.  With no agreement written down and signed, markets are a little nervous.  Meanwhile yields between the 3 and 5-year note have inverted for the first time in over 10 years suggesting that the US economy is slowing.  Nothing of significance on today’s US economic calendar.  The Fed’s Williams holds a press conference @ 10:00am EST.  Earnings include TOL, DG, AZO, MRVL, and HPE.  Volatility remains elevated, however could shrink into today’s US close as US stock markets will be closed National Day of Mourning for former US President George H.W. Bush.  Size bias is short on lighter Globex volume into the US session open.

 

 Posted by at 6:51 am

05/23/2018 ES Trade Plan Worksheet

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May 232018
 

US and global stock markets are a little rattled by Trump comments concerning a scheduled June 12 Singapore meeting with North Korea and US trade war progress with China.  The US and South Korea held a joint military exercise last week and now Trump is saying there’s a good chance the North Korean meeting will not take place on June 12, but still a good chance it will at some point in the future.  About the trade negotiations with China, Trump said it’s “a start” but he was “not pleased” with the progress.  US retailers Target and Lowes missed earnings estimates while jeweler Tiffany & Co. crushed their expectations.  The economic calendar focus is Oil @ 10:30am and Fed minutes @ 2:00pm EST.  Before the main events, we have PMI Composite Flash @ 9:45am EST and New Home Sales @ 10:00am EST.  The ES has pulled back enough where upside volatility should not be hindered as we’ve experienced over the last week.  Volatility continues to contract, but there’s more room to expand now.  Size bias is short on increased Globex volume into the US session open.

 

 Posted by at 7:46 am