Why YTD Sector Performance Implies Inflation Risks

/in , /by

What’s in Today’s Report:

  • Why YTD Sector Performance Implies Inflation Risks

Futures are little changed on mixed tech news and as the Bank of Japan decision met expectations.

Tech earnings/news was mixed as Intel missed (INTC down 13% pre-market) but a positive Bloomberg article on Nvidia (NVDA) chip sales to China is offsetting the INTC results.

The Bank of Japan held rates steady but signaled more hikes are coming, as expected (and that kept JGB’s calm).

Focus today will be on economic data and specifically the Flash Manufacturing PMI (E: 52.0) and Flash Services PMI (E: 52.8), which are the first national data points for January.  Stability in the data will be welcomed by markets as another reminder of the Goldilocks economy (which is stock positive).

We also get Consumer Sentiment (E: 54.0) and some earnings reports (SLB ($0.74), ERIC ($0.23), BAH ($1.26)) but they shouldn’t move markets.

 

Sevens Report: Why Rising Yields Drove the S&P 500’s Worst Day Since October

/in , /by

Sevens Report: Why Rising Yields Drove the S&P 500’s Worst Day Since October

S&P 500 has its worst day since October. Here’s why stocks were down.

The benchmark 10-year Treasury yield spiked to 4.293%, but “it’s not really a problem until 4.50% and higher,” said Tom Essaye, founder of the Sevens Report on the markets. “If yields keep rising, that will become an increasing headwind on markets and the economy.”

“The Goldilocks economic data continued last week, and that has been an important foundational positive and somewhat calming influence on markets amidst the recent headline chaos,” Essaye said. “As long as economic data stays this Goldilocks, the chances of a protracted decline in stocks will remain low.”

Also, click here to view the full article published in USAToday.com on January 20th, 2026. 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.

The Bar Has Been Lowered Says Tom Essaye

/in , /by

Tom Essaye Interviewed On Schwab Network

UAL Earnings Seek to Reverse Airline Caution Signaled by DAL

“The bar has been lowered” for United Airlines (UAL) after Delta Airlines (DAL) signaled caution in its earnings, says Tom Essaye. He sees investors focusing on guidance and whether United can weather global volatility. Tom tells investors to listen for commentary surrounding international travel, price cuts, and fuel impacts. Tom White helps investors navigate the options front through an example trade.

Also, click here to view the full interview with Schwab Network published on January 20th, 2026. 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.

What’s Next from a Policy Standpoint

/in , /by

What’s in Today’s Report:

  • What’s Next from a Policy Standpoint
  • Monthly Bitcoin Update

Futures are moderately higher on continued positive momentum from the “deal” announced on Greenland by President Trump on Wednesday afternoon.

There were no new geopolitical headlines overnight and that’s allowing stocks to extend the rebound as markets celebrate no new tariffs and deescalation on Greenland. Today markets will want to see no backtracking on the Greenland “deal” and continued calm in JGB yields and if we get both, stocks should hold these early gains.

Looking at the calendar, there is some notable economic data via Jobless Claims (E: 205K) and two delayed reports from the government shutdown: Final Q3 GDP (E: 4.3%) and Nov. Core PCE Price Inde (E: 0.2% m/m, 2.8% y/y).  However, barring a major surprise, none of those numbers should move markets.

On earnings, they’ve taken a back seat given all the geo-political drama but the season is heating up and some results we’re watching today include: PG ($1.87), GE ($1.44), FCX ($0.28), INTC (-$0.02), ABT ($1.50), ISRG ($1.83), COF ($4.12), AA ($0.84).

 

Tom Essaye Says Markets Trust The Rally’s Core Pillars Despite Political Noise

/in , /by

Why Trump-Driven Selloffs Keep Becoming Buyable Dips

The TACO theory on Trump makes every ‘dip’ a buy, analyst says

“Trump is not going to willfully drive the markets or the economy into the ground. At least we hope not,” Tom Essaye, president and founder of Sevens Report Research, told Yahoo Finance’s Opening Bid.

The theory has become the defining feature of Trump’s current term, Essaye argues. The administration started the year laser-focused on Venezuela and has since taken aim at credit card companies over interest rates, healthcare providers over insurance costs, and even the Federal Reserve.

“The sheer volume will test the TACO theory,” Essaye said.

Despite the noise, the underlying “four pillars” of the market rally — earnings growth, stimulus, Fed support, and the AI boom — remain largely intact. Essaye suggests that while protection is “relatively cheap” and perhaps necessary for those with no hedge, the “buy the dip” mentality shouldn’t be abandoned just yet.

“One of the most important things in investing is being able to cut out the headline noise and stay focused on the big trends,” Essaye said. He points to financials and healthcare as prime examples and some of the best trades to make right now, as these sectors often sell off 3% to 5% on a single social media post, only for the threatened regulations to never materialize.

Investors should focus on earnings, underlying economic growth, and the likelihood the Fed will cut rates in the first half of the year, Essaye said. Not to mention, “AI enthusiasm is alive and well,” he added.

Ultimately, the TACO trade relies on the belief that the president’s greatest vanity is the stock market ticker. As long as that holds true, every policy-driven dip should not be viewed as a disaster, but as a tactical entry point, per Essaye.

Also, click here to view the full article published in Yahoo Finance on January 20th, 2026. 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.

Why “JGBs” and a “Run-Hot” Economy Matter to Your Clients

/in , /by

What’s in Today’s Report:

  • Why a Spike in Japanese Bond Yields Hit Stocks
  • Implications of the Administration’s Policies: A Run-Hot Economy (and What Might Come Next)

Stock futures bounced overnight amid stabilizing global bond yields as traders digested Tuesday’s volatile start to the short trading week before Trump’s speech in Davos.

Economically, the U.K.’s December CPI report was “warm” with the headline rising +0.2% to 3.4% vs. (E) 3.3% which saw yields come off their overnight lows in pre-market trading.

There are no economic reports due to be released today and no Fed officials are scheduled to speak. However, President Trump is scheduled to deliver an address at the World Economic Forum in Davos at 8:30 a.m. ET, and any commentary on Greenland could roil markets in what has already been a volatile week.

The Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a 20-Yr Bond auction at 1:00 p.m. ET. Yesterday’s Treasury auctions saw weak demand across durations which added upside pressure to bond yields, and if we see more of the same in today’s auctions, rising yields could reignite volatility.

Finally, earnings season remains in full swing with a handful of noteworthy companies reporting today including: JNJ ($2.49), SCHW ($1.37), and KMI ($0.36).

 

What Greenland Headlines Mean for Markets

/in , /by

What’s in Today’s Report:

  • What the Greenland Headlines Mean for Markets
  • Weekly Economic Outlook – Core PCE in Focus

Global markets are “risk-off” thanks to geopolitical tensions between the U.S. and Europe surrounding Greenland and a sharp rise in bond yields due to Japanese fiscal worries.

Economically, Germany’s ZEW Survey topped estimates with Economic Sentiment firming to 59.6 vs. (E) 50.0 but the data is being overshadowed by the sharp rise in JGB yields and geopolitical turmoil.

There are no economic reports today, however, the Treasury will hold auctions for 3-Month and 6-Month Bills at 11:30 a.m.

ET and 6-Week and 52-Week Bills at 1:00 p.m. ET. Strong demand (dovish) should help stocks stabilize as we start the week.

There are no Fed officials scheduled to speak today which will leave traders watching earnings closely with FITB ($1.01), MMM ($1.82), DHI ($1.96), USB ($1.19), NFLX ($0.55), IBKR ($0.51), and UAL ($2.98) all reporting Q4 results today.

 

January Market Multiple Table Chart

/in , /by

What’s in Today’s Report:

  • Market Multiple Table Chart

Futures are modestly higher mostly on momentum from Thursday’s rally and following a quiet night that was devoid of any material earnings or economic data.

Oil is higher by 1% on reports the U.S. is moving military assets back into the Mid-East, implying the chances of a strike on Iran did not decrease as much as thought.

Today there are two economic reports, Industrial Production (E: 0.1%) and Housing Market Index (E: 40) as well as two Fed speakers: Bowman (11:00 a.m. ET) and Jefferson (3:30 p.m. ET), but barring a major surprise, none of that should move markets ahead of the long weekend.

Instead, focus will stay on Washington and any reports, headlines or social media posts that 1) Imply more attacks on the Fed or 2) Hint at military action in Iran, Greenland, Mexico, etc. will weigh on stocks.

Finally, on the earnings front, the week has been mostly focused on bank results and that continues this morning with several regional reports: PNC ($4.23), STT ($2.82), RF ($0.61), MTB ($4.44).

January Market Multiple Table (Rising Negative Pressure)

/in , /by

What’s in Today’s Report:

  • January Market Multiple Table (Rising Negative Pressure on Market Influences)

Futures are modestly higher on dual de-escalation of recent Fed attacks and geopolitical tensions overnight.

President Trump stated last night he didn’t plan on firing Fed Chair Powell and downplayed the chances of a strike on Iran, de-escalating two negative market influences.

Today focus will be on economic data and earnings.  Starting with data, the key reports today include Jobless Claims (E: 212K), Philly Fed (E: -3.5) and Empire Manufacturing (E: 1.0) and stable readings that meet expectations will be the best-case scenario for stocks.  On the Fed front, there are three speakers today, Bostic (8:35 a.m. ET), Barr (9:15 a.m. ET) and Barkin (12:40 p.m. ET) and the more dovish they are, the better for markets.

Finally, turning to earnings, TSM ($2.82) already posted blow out numbers and that’s helping tech, but other reports we’re watching today include GS ($11.77), BLK ($12.41), MS ($2.41) and JBHT ($1.79).

 

Implications of Powell’s Criminal Investigation

/in , /by

What’s in Today’s Report:

  • Implications of Powell’s Criminal Investigation
  • CPI Data Takeaways

Futures are moderately lower due to ongoing geopolitical angst and growing concerns about Japan’s fiscal situation ahead of snap elections announced for February.

Economically, Chinese trade data was strong overnight with Imports +5.7% vs. (E) -0.1% and Exports +6.6% vs. (E) +3.0%.

Today, investors will get a look at some delayed economic data from Q4’25 including PPI (E: 2.7% y/y), Core PPI (E: 2.6%), Retail Sales (E: +0.2%), and Existing Home Sales (E: 4.23 million). Investors continued to look for strong, but not “hot” growth numbers and “cool” inflation data.

There are multiple Fed officials scheduled to speak today including: Paulson (9:50 a.m. ET), Miran (10:00 a.m. ET), Bostic (12:00 p.m. ET), Kashkari (12:00 p.m. ET), and Williams (2:10 p.m. ET) with markets likely most focused on “Fed Independence” and any shifts in tone regarding 2026 rate cuts.

Finally, earnings season is continuing to ramp up with reports due from WFC ($1.66), C ($1.65), and BAC ($0.95) today.