How much of this excessive yen carry trade, leveraged long bets, has been rung out by the last couple days, or really the last two weeks,” Sevens Report Research’s Tom Essaye tells Barron’s.
Mega-cap tech remains king” within the larger technology sector, said Tyler Richey, a co-editor with Sevens Report Research.
“The bond market is now signaling a real chance of a greater-than-expected economic slowdown and falling yields are no longer a positive for markets. Going forward, the sooner Treasury yields can stabilize (ideally with the 10 year close to 4%) the better for markets,” wrote Sevens Report’s Tom Essaye in a note.
Futures are plunging globally on snowballing concerns about economic growth following Friday’s soft jobs report, said Tom Essaye, founder of Sevens Report research.
“We started the landing a couple months ago,” Essaye says. “It’s no different than when you’re on an actual plane. Sometimes the plane descends more quickly than other times, but that doesn’t mean that you’re crashing.”
The main reason the geopolitical tensions have not had a more pronounced impact on the global energy markets since tensions in the Middle East first picked up last fall is that there has not been a meaningful impact on global supply, said Tyler Richey, co-editor of Sevens Report Research.
“Better-than-expected corporate earnings from domestic chip giant AMD [Advanced Micro Devices] helped rekindle a bid in the AI-trade,” writes Sevens Report’s Tom Essaye.
So far, markets have been just fine accepting some “bad” labor data since it means rate cuts are more likely, but this could change in the near-term, Sevens Report Research founder Tom Essaye said.
“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. “But I do think there are extremely high growth expectations. And if those growth expectations disappoint, even a little bit, then you’ll see some punishment. And that’s really what’s been going on in the earnings season.”
Markets may “get a bit ugly” if the central bank doesn’t signal a reduction given the recent tech weakness, said Tom Essaye at The Sevens Report.