You’re Seeing A Bounce And A ‘Buy The Dip Says Sevens Report
The two underpinnings of the rally are really earnings and economic growth, Tom Essaye tells Barron’s.
The Dow Is Leading. Wall Street Is Selling Winners and Buying Losers.
“You’re just seeing sort of a bounce and a ‘buy the dip,’” Sevens Report Research’s Tom Essaye tells Barron’s. “The consumer is holding up really, really well. There are some concerns that increased price hikes into the coming months will continue to sort of strain consumer spending, but there’s just no real evidence that that’s happening yet.”
Essaye says that as long as the labor market holds on and AI spending continues to drive massive earnings growth, the market can keep chugging.
“All of this money being spent is essentially being just firehosed onto the economy by the hyperscalers, by investors that are just clamoring to build out these AI data centers, and it’s creating this, essentially additional stimulus program, that’s helping every sector of the market—every single one,” Essaye says. “If that is not self-sustaining, if all of that doesn’t have a net positive ROI, and it stops, then everything has a real big problem. But it’s not stopping any time soon.”
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