Credit Spreads: Are We Seeing Liquidity Tightening?

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What’s in Today’s Report:

  • Credit Spreads: Are We Seeing Liquidity Tightening?

U.S. futures are solidly higher with European equity markets thanks to strong earnings from LVMH and ASML.

Economically, Eurozone Industrial Production fell -1.2% vs. (E) -1.6% m/m in August.

Today, there is one economic release to watch: the Empire State Manufacturing Index (E: -0.9) and a 4-Month Treasury Bill auction at 11:30 a.m. ET that could move short duration yields.

Additionally, today will be a busy day of Fed Speak with Miran (9:30 a.m. & 12:30 p.m. ET), Bostic (12:10 p.m. ET), Waller (1:00 p.m. ET), and Schmid (1:35 p.m. ET) all scheduled to deliver comments over the course of the day.

Finally, investors will remain keenly focused on earnings with quarterly reports due from ASML ($6.36), BAC ($0.94), MS ($2.08), PGR ($5.08), ABT ($1.30), UAL ($2.64), and JBHT ($1.48) today.

 

Oil Prices Hover Near Key Support as Downside Bias Persists Says The Sevens Report

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Sevens Report’s Tom Essaye says WTI crude remains technically bearish, with $60–$61 marking a crucial line for oil bulls.

Oil: Ceasefire Deal Reinforces Bearish Technical Trend

Commodities have maintained a downside bias as easing Middle East tensions weigh on oil markets, according to Tom Essaye, president of the Sevens Report. He notes that WTI crude has been in a bearish trend since August 2024, with $60–$61 per barrel serving as a critical technical support zone. A decisive break below could spark a drop toward $57. Rising global supply from OPEC+ and near-record U.S. production, combined with softer demand expectations, keep risks tilted lower. Still, Essaye cautions that with sentiment crowded to the bearish side, oil remains vulnerable to a short-covering rally on any bullish surprises.

Also, click here to view the full article on Moneyshow.com published on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.

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Powell’s Tone Could Add Pressure to Fragile Markets, Says Essaye

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Sevens Report’s Tom Essaye warns that even a mildly hawkish stance from the Fed chair could weigh further on equities.

Stocks Fall as China Retaliation Rattles Traders: Markets Wrap

“Any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today,” said Tom Essaye at The Sevens Report.

Also, click here to view the full article published in Bloomberg on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.

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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.

The Declines Could be Sharp and Painful – Tom Essaye Quoted in Bloomberg

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The declines could be sharp and painful warns Tom Essaye

US Stocks Bounce as Waning Trade Fears, AI Deal Fuel Dip Buying

“As long as the AI capex enthusiasm lasts, stocks can hold on,” said Tom Essaye of the Sevens Report. However, “if doubts emerge about the stimulative power of AI for the entire economy and market, then investors will have to face this less-than-ideal reality and the declines could be sharp and painful.”

Also, click here to view the full article published in Bloomberg on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.

AI Now the “Lynchpin” Holding Up Stocks, Warns Tom Essaye

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Sevens Report’s Tom Essaye cautions that AI enthusiasm is masking deeper market risks from tariffs, a cooling labor market, and government dysfunction.

‘AI is becoming a larger and larger lynchpin’ for stock market, analyst warns

Tom Essaye, founder of Sevens Report Research, warns that the stock market could face a “horror-movie scenario” if three key risks hit at once — an AI bubble burst, worsening consumer strain, and a weakening labor market. He points to OpenAI’s $500 billion valuation and stretched tech prices as signs of speculative excess. Meanwhile, rising delinquencies at companies like CarMax show lower-income consumers are increasingly pressured.

Essaye cautions that while the economy still looks stable on the surface, markets are ignoring the potential for rising unemployment and slowing growth. If AI optimism fades and consumer spending weakens, the S&P 500 could fall 20–30%, mirroring the drawn-out collapse of the early 2000s tech bubble.

Also, click here to view the full article published in MarketWatch on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.

Volatility Reset or New Volatility Cycle?

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What’s in Today’s Report:

  • “Volatility Reset” or the Start of a New “Volatility Cycle?”
  • Silver Joins Gold at All-Time Highs

Markets are trading with a clear risk-off tone this morning amid a reescalation in trade tensions between the U.S. and China ahead of a slew of big bank earnings releases today.

Economically, the NFIB Small Business Optimism Index fell to 98.8 vs. (E) 100.5 in September but the Employment Subindex favorably rose for a fourth straight month which should help ease some labor market angst.

Looking ahead to today’s session, focus will remain on the trade war, specifically tensions between the U.S. and China, however, there are also two Treasury auctions (for 3-Month and 6-Month Bill at 11:30 a.m. ET) that could impact yields/Fed policy expectations and subsequently move equities.

Additionally, there are two Fed speakers on the calendar today: Bowman (8:45 a.m. ET) and Powell (12:20 p.m. ET). Obviously, any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today.

Finally, today marks the unofficial start of Q3 earnings season with several big banks/financials reporting quarterly results including: BLK ($11.25), JPM ($4.83), GS ($10.93), WFC ($1.55), and C ($1.83) as well as other notables: JNJ ($2.77), DPZ ($4.00).

 

AI Spending Boom Keeps Markets Afloat, But Risks Loom, Says Tom Essaye

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Sevens Report’s Tom Essaye warns of sharp declines if confidence in AI’s economic impact fades, while Gabelli’s John Belton urges caution against “bubble” talk.

U.S. stocks rebounded strongly, with the S&P 500 rising 1.6% driven by AI capital expenditures

Tom Essaye, founder of Sevens Report, said that the ongoing AI capital expenditure boom remains the key force sustaining stock market strength. However, he cautioned that if investors begin to question AI’s broader economic benefits, the resulting selloff could be “swift and painful.” Gabelli fund manager John Belton added perspective, acknowledging that while parts of the market appear overheated, labeling the trend as a full-blown “bubble” oversimplifies the situation.

Also, click here to view the full article on Chaincatcher.com published on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.

Is AI the Only Thing Supporting This Market?

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What’s in Today’s Report:

  • Last Week’s Takeaway: AI Enthusiasm Could Soon Be the Only Thing Holding Up This Market
  • Weekly Economic Cheat Sheet – Fed Surveys in Focus

Stock futures are solidly higher this morning, recovering a good portion of Friday’s losses amid easing trade war fears.

President Trump dialed back Friday’s tariff threats on China with a post on Truth Social saying “Don’t worry about China, it will all be fine,” which is fueling a relief rally today.

Economically, Chinese trade data was strong with exports jumping from 4.4% to 8.3% vs. (E) 6.5% in September.

There are no economic reports in the U.S. today and just one Fed speaker: Paulson (12:55 p.m. ET).

There is one noteworthy “bellwether” earnings release today: FAST ($0.30), however, with bond markets closed in observation of Columbus Day, it is likely to be a quiet day of volatility consolidation.

October Bitcoin & Cryptocurrency Update

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What’s in Today’s Report:

  • Monthly Bitcoin & Crypto Update (October)

U.S. equity futures are flat while most overseas stock markets traded lower overnight as global investors book profits amid historically high valuations and an uncertain macroeconomic outlook given the ongoing government shutdown.

Economically, Japanese PPI held steady at 2.7% vs. (E) 2.5% in September, a slightly “warm” print that supported a modest rally in the yen overnight.

Looking into today’s session, there is one noteworthy private sector economic report to watch today: Consumer Sentiment (E: 54.0, 1-Yr Inflation Expectations: 4.5%) and the results could move markets as the government shutdown has resulted in a prolonged void in official growth/inflation data this week (the better the headline and cooler the inflation outlook, the better for stocks).

Additionally, there are two notable Fed speakers today: Goolsbee (9:45 a.m. ET) and Musalem (1:00 p.m. ET), and the more dovish the commentary, the better for risk assets.

Signs of an AI bubble and an increasingly stressed consumers could dampen enthusiasm for stocks, says Tom Essaye.

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Signs of an AI bubble and an increasingly stressed lower-income consumer could dampen investors’ enthusiasm for stocks, says Tom Essaye

Three scenarios that could spook stocks in October, according to a Wall Street veteran

Signs of an AI bubble and an increasingly stressed lower-income consumer could dampen investors’ enthusiasm for stocks, says Tom Essaye, founder of the Sevens Report.

There are a few things that could spook investors in October, or the coming months.

As Halloween decorations start to appear in storefronts and on front porches across the U.S., one Wall Street veteran has decided to take a closer look at three scenarios that could spook markets as the fourth quarter gets underway.

“Over the weekend, my family and I decorated our house and yard for Halloween. While doing so, it dawned on me that much of the financial media and analyst community isn’t accurately portraying this market reality: The outlook for stocks and risk assets remains positive, but if things start to turn bad, the situation becomes downright scary from a return standpoint,” said Tom Essaye, founder and president of Sevens Report Research, in commentary shared with MarketWatch.

Also, click here to view the full article featured on Barron’s published on October 3rd, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If 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.