This generally isn’t great for markets.
The 10-year Treasury constant maturity minus the 2-year (aka 10s-2s), currently around -0.26, is moving in a positive direction, Sevens Report founder Tom Essaye said. This generally isn’t great for markets.
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History suggests the answer is probably no
History suggests the answer is probably no. More often, the reversal of a yield-curve inversion has signaled that the wheels are about to come off the economy and the stock market with it, according to Tom Essaye, a former Merrill Lynch trader and founder of Sevens Report Research.
The stock serves as a little bit of a proxy for sentiment
“The stock serves as a little bit of a proxy for sentiment toward Donald Trump himself,” Tyler Richey, an analyst at Sevens Report Research, told ABC News.
Expectations of a Trump win in November are boosting futures this morning
“While expectations of a Trump win in November are boosting futures this morning, the event is unlikely to sustainably impact markets,” wrote Tom Essaye, president and founder of Sevens Report.
Economic growth must remain resilient and we cannot have a growth scare
Economic growth must remain resilient and we cannot have a growth scare,” said Tom Essaye, founder of Sevens Report Research.
The performance gap between tech and the rest of the market
“The performance gap between tech and the rest of the market is so wide that it’s reasonable to expect continued closing of that gap as markets more fully embrace the idea of the start of a rate cutting cycle,” summarized Sevens Report founder Tom Essaye.
I think this will cause a bit of a correction
“I think this will cause a bit of a correction, and a bit of a widening. How long it lasts depends on growth.” Sevens Report Research’s Tom Essaye tells Barron’s.
The Fed needs a few more ‘good’ reports on inflation
“Stepping back, the Fed needs a few more ‘good’ reports on inflation to cut rates in September. This can be one of those needed ‘good’ reports and keep the rally rolling (although it won’t be a new, positive catalyst as markets already assume ongoing disinflation),” said Tom Essaye, founder of Sevens Report Research, in a note.
Consumer demand remains rather strong
Consumer demand remains rather strong “despite higher prices at the pump this year and simmering concerns about the health of the economy,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.
A lack of market breadth won’t lead to markets reversing
Though a lack of market breadth won’t lead to markets reversing, Sevens Report Research’s Tom Essaye told Barron’s, it is worth watching.