Posts

The key is growth, it’s not rate cuts

/in , /by

The key is growth, it’s not rate cuts: Tom Essaye Quoted in Barron’s

S&P 500 Edges Higher. Tech Still Lags.

Stocks have been holding up in recent weeks even though expectations for a rate cut sooner rather than later have dipped.

“The key is growth, it’s not rate cuts,” Sevens Report Research’s Tom Essaye told Barron’s. “As long as growth is stable, the markets can tolerate fewer rate cuts—up to a certain point.”

Also, click here to view the full Barron’s article published on March 19th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

It’s All About Growth

/in , /by

It’s All About Growth: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Cut Through the Noise: It’s All About Growth
  • Weekly Market Preview – Fed Decision and Forecasts in Focus
  • Weekly Economic Cheat Sheet: Stagflation Concerns on the Rise

Futures are higher to start the week with mega-cap tech leading gains after Bloomberg reported that AAPL is in talks with GOOGL to license the Gemini AI engine for the iPhone while economic data was largely market-friendly overnight.

Economically, Chinese Retail Sales rose 5.5% vs. (E) 5.2% and Industrial Output jumped 7.0% vs. (E) 5.0% to start 2024, easing some growth concerns surrounding the world’s second largest economy, however property sector woes persist.

In Europe, Core HICP (their CPI equivalent) fell 0.2% to 3.1% in February which was inline with estimates but helped reaffirm the disinflation trend remains in place in early 2024.

Today there is just one economic report to watch: the March Housing Market Index (E: 48), but with the Fed meeting looming, it is unlikely to have a material impact on the market.

Finally, there are 3-Month and 6-Month Treasury Bill auctions at 11:30 a.m. ET and while these are typically non-events, they could impact yields with the Fed meeting looming. Any additional hawkish money flows would likely pressure equities ahead of this week’s FOMC decision.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

An Important Jobs Day

/in , /by

An Important Jobs Day: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • An Important Jobs Day (Jobs Report Preview – Abbreviated Version)

Futures are modestly higher following better than expected economic data overnight and on positioning ahead of today’s important jobs report.

Japanese Household Spending (3.9% vs. (E) 0.6%) and German Manufacturers’ Orders (3.9% vs. (E) 2.1%) both beat estimates. This points to some resilience in the global economy.

Today focus will be on the jobs report and expectations are as follows:  Job Adds: 160K, UE Rate: 3.7%, Wage Growth: 0.3% m/m & 4.3% y/y.  For markets, a job adds figure modestly below expectations with an increase in unemployment and drop in wages should push Treasury yields lower and spur a strong rebound in stocks.

Conversely, if we see a job adds number close to or above 250k, a decline in unemployment or rise in wages, expect higher Treasury yields and lower stock prices.

Outside of the jobs report today we also get Consumer Credit (E: $11.5B) and one Fed speaker, Waller (12:00 p.m. ET), but they shouldn’t move markets.

An Important Jobs Day

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here. 

Renewed Global Growth Concerns

/in , /by

Growth Concerns – Tom Essaye Quoted in Barron’s: Strengthen your market knowledge with a free trial of The Sevens Report.

Stocks Slip as Trading Resumes After the Long Weekend With Renewed Global Growth Concerns Out of China.

“The Dow Jones Industrial Average was down 33 points, or 0.1%. The S&P 500 declined 0.3%, and the Nasdaq Composite was down 0.3%.

Weighing on the markets were “renewed global growth concerns,” said Tom Essaye, founder of The Sevens Report. China’s purchasing-managers’ index (PMI) showed that the country’s services sector expanded at the slowest pace in eight months.

The remainder of the week looks slow on the economic data front, and investors will continue to digest U.S. jobs data from Friday which gave signs to suggest the labor market may be cooling. That’s what the Federal Reserve wants to see as it works to battle historically high inflation through interest-rate hikes.”

Also, click here to view the full Barron’s article published on September 5th, 2023.

China global growth

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more… To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Tom Essaye Quoted in Barron’s on July 17th, 2023

/in , /by

4 ETFs to Play a Stock Market That Keeps Rallying

However, last week’s readings point toward falling inflation and stable economic growth—a goldilocks scenario, or Immaculate Disinflation, as Sevens Reports’ founder Tom Essaye writes. However, last week’s readings point toward falling inflation and stable economic growth—a goldilocks scenario, or Immaculate Disinflation, as Sevens Reports’ founder Tom Essaye writes. Click here to read the full article.

Why the Sintra Comments Were Slightly Hawkish

/in , /by

What’s in Today’s Report:

  • Why the Sintra Comments Were Slightly Hawkish (And What They Mean for Markets)
  • Clarifying the “Growth On” Trade vs. “Growth” Style

Futures are modestly higher after all 23 U.S. banks passed the Fed’s annual stress tests.

The 23 largest banks in the U.S. passed the Fed’s annual stress tests, and while none were expected to fail, the fact that there were no negative surprises is a general positive for the banking sector and financials.

Economically, Euro Zone Economic Sentiment, was basically in-line with expectations and isn’t moving markets.

Today focus will be on economic data, and the key reports today are:  German CPI (E: 6.3% y/y), Jobless Claims (E: 270k) and Final Q1 GDP (E: 1.4%).  Markets have priced in “Immaculate Disinflation” so inflation needs to continue to fall everywhere (including Germany), while markets also need to see jobless claims gradually rise (a big spike in claims would be a negative) to keep to bullish momentum going.

 

Sevens Report Q2 ’23 Quarterly Letter Coming Monday, July 3rd.

The Q2 2023 Quarterly Letter will be delivered to subscribers on Monday, July 3rd.

Stocks were surprisingly strong in the first half of 2023, but with investor sentiment now very bullish and the financial media proclaiming a new “Bull Market” has started, it’s important for advisors to keep client expectations grounded. A well-written quarterly letter that details the opportunities and risks facing investors can keep investor expectations grounded.   

We will deliver the Q2 ‘23 Quarterly Letter on the first business day of the new quarter because we want you to be able to send your quarterly letter before your competition (and with little-to-no work from you).

You can view our Q1 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

FOMC Preview (Watch the Dots)

/in , /by

What’s in Today’s Report:

  • FOMC Preview (Watch the Dots)
  • Why Yesterday’s CPI Boosted the “Growth On” Trade
  • Gold Update:  Are the 2023 Highs Already In?

Futures are modestly higher following a quiet night of news as markets look ahead to the FOMC decision and expected pause in rate hikes.

Economic data was mixed overnight as UK Industrial Production missed estimates (-0.3% vs. (E) -0.1% in manufacturing) while Euro Zone IP slightly beat (1.0% vs. (E) 0.9%), but neither number is moving markets.

Today focus will be on the FOMC Decision and the consensus expectation is that the Fed will pause.  But, it’s not clear how many additional 2023 rate hikes the “dots” will show, and that will determine if the Fed decision is hawkish or dovish (more on that inside).

Away from the Fed we also get the May PPI (E: -0.1% m/m, 1.6% y/y) and Core PPI (E: 0.2% m/m, 2.9% y/y) and if this metric comes in under expectations that’ll boost the “Immaculate Disinflation” expectation and should help cyclical sectors extend the rally.

Tom Essaye Quoted in Forbes on March 1, 2023

/in , /by

These U.S.-Listed Stocks Surge—Alibaba, Baidu And More—After China’s Economic Rebound

The unexpected gain indicates that China’s post-pandemic recovery, which has long been marred by ongoing Covid lockdowns that ushered in the economy’s second-worst showing since 1976 last year, is gaining momentum, says Sevens Report analyst Tom Essaye, who notes the data helped fuel optimism across global markets on Wednesday. Click here to read the full article.

Technical Update: Key Levels to Watch

/in , /by

What’s in Today’s Report:

  • Technical Update:  Key Levels to Watch
  • Value vs. Growth – What Do the Charts Say?

Futures are modestly higher as a soft EU inflation reading is helping to extend Thursday’s rally.

Euro Zone PPI came in much lower than expectations (15% vs. (E) 17.7% y/y) and that’s helping to slightly offset the hot inflation data from earlier in the week.

Economically, Euro Zone and UK Composite PMIs were generally in-line with expectations.

Today the key report will be the ISM Services PMI (E: 54.5).  For stocks and bonds, the best case for this report is that the headline is stable (not much above expectations) while the price indices decline.  If that happens, stocks can extend the rally.

We also get several Fed speakers today including Logan (11:00 a.m. ET), Bostic (11:45 a.m. ET), Bowman (3:00 p.m. ET) and Barkin (4:15 p.m. ET).  If they echo Bostic’s comments from yesterday about the Fed being done with hikes by mid to late summer, that will be a tailwind on stocks.

Tom Essaye Joins Yahoo Finance To Discuss The Economy on February 21st, 2023

/in , /by

‘The economy is stronger than everybody thought,’ Sevens Report Research Founder says

Sevens Report Research Founder and President Tom Essaye to discuss the expectations for the Fed’s upcoming FOMC minutes meeting, the future of Fed policy pathway, why investors should remain on recession watch in 2023, and the outlook for markets. Click here to watch the full discussion.