I don’t think the market is really doubting the whole AI story
I don’t think the market is really doubting the whole AI story at this point, Sevens Report Research’s Tom Essaye told Barron’s
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This week is very important for AI and tech
“This week is very important for AI and tech because MSFT, AAPL, AMZN, and META, all AI darlings, report earnings and if they post disappointing guidance, it will further erode AI enthusiasm and we could see this pullback continue,” Sevens Report’s Tom Essaye wrote on Monday.
None of this pullback includes growth worries
None of this pullback includes growth worries, and that’s what we have to watch for to make this go from a pullback to something worse. I am still concerned about growth but the data over the past week has been ‘OK,” said Tom Essaye, founder of Sevens Report Research.
Oil futures appropriately popped in the wake of the release
Wednesday’s EIA report was “solid and oil futures appropriately popped in the wake of the release,” said Tyler Richey, co-editor at Sevens Report Research.
The ultimate direction of the S&P 500 will still be determined by economic growth
“The ultimate direction of the S&P 500 will still be determined by economic growth,” remarked Sevens Report analyst Tom Essaye in a Monday note.
The oil market began the week with a thud
“The oil market began the week with a thud [Monday], failing to stabilize after the sharp losses in the back half of last week,” said Tyler Richey, co-editor at Sevens Report Research.
Price-negative for oil
The improved prospects of a Donald Trump victory in the 2024 election are “price-negative for oil as he has said he plans to support production increases to increase energy independence and lower prices,” said Tyler Richey, co-editor at Sevens Report Research.
Corporate earnings growth and interest rate movements are likely to more directly impact equity prices.
The stock market fallout of shifting expectations for November’s election will likely be “very short term,” Sevens Report founder Tom Essaye wrote to clients, as more directly impactful developments like corporate earnings growth and interest rate movements are likely to more directly impact equity prices.
This political shake-up shouldn’t materially alter the direction of the markets
“This political shake-up shouldn’t materially alter the direction of the markets,” said Tom Essaye at The Sevens Report. “The ultimate direction of the S&P 500 will still be determined by economic growth.”
Massive rotation from tech and tech related sectors
Bottom line, this massive rotation from tech and tech related sectors was caused primarily by investors positioning for a rate cutting cycle and secondarily by anticipation for a Trump administration and negative tech news,” writes Sevens Report’s Tom Essaye.