Fintech Spotlight: What is Tokenization

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What’s in Today’s Report:

  • Jobs Day
  • Fintech Spotlight: What is Tokenization (And Is It a Growth Opportunity?)

Futures are mixed as bond yields retreat ahead of today’s August jobs report.

There were no major geopolitical or macro developments overnight.

Economic data was mixed as EU retail sales fell 0.6% m/m vs. (E) 0.3%, while German Factory Orders rose 2.5% m/m vs. (E) 0.3%.

Today focus will be on the jobs report and estimates are as follows: 55K Job-Adds, 4.2% Unemployment Rate and 3.0% Wage Growth. A Goldilocks report would be supportive for stocks and help keep bond yields contained.

There are no Fed speakers or notable earnings reports scheduled today, leaving the jobs report and resulting Treasury market reaction as the primary focus for stocks.

 

Jobs Report Preview: “Too Hot” Definitely Worse Than “Too Cold”

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What’s in Today’s Report:

  • Jobs Report Preview: “Too Hot” Definitely Worse Than “Too Cold”

Futures are mixed as higher oil prices and renewed U.S.-Iran hostilities pressure stocks.

Geopolitically, Iran launched missile and drone strikes against U.S. bases in Kuwait as tensions surrounding the Strait of Hormuz remain elevated.

Economically, EU PPI rose 1.6% vs. (E) 1.2% m/m, adding to inflation concerns.

Today, focus will be on Jobless Claims (E: 205K) and the ISM Services Index (E: 54.1). An in-line claims print and stable services activity should help ease concerns about the economy while keeping pressure off Treasury yields.

Finally, Waller (8:30 a.m. ET) and Hammack (3:00 p.m. ET) are scheduled to speak today while earnings include CIEN ($1.46), ZS ($0.06), IOT ($0.02), and LULU ($1.79).

 

Alpha Report: Is It Time to Rethink Long-Term Bonds?

Long-term bonds have become one of the most disliked areas of the market—and it’s not hard to understand why. Persistent inflation, massive Treasury issuance, large fiscal deficits and higher oil prices have all reinforced the case for staying short duration.

But when virtually everyone agrees on an investment thesis, it’s worth asking what could make that consensus wrong.

That’s exactly what we examined in Tuesday’s Sevens Report Alpha.

Long-term yields remain near two-decade highs, sentiment is deeply negative, and several macro developments could begin easing the pressures that have punished the long end of the Treasury market. Importantly, investors don’t need every concern to disappear for the risk/reward to improve.

Could long-term bonds be emerging as one of today’s better contrarian opportunities? (Click here to find out.)

 

Why Stocks Dropped on Tuesday

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What’s in Today’s Report:

  • Why Stocks Dropped on Tuesday
  • Why Are Agricultural Commodities Hitting New Highs Too?

Futures are modestly lower despite solid tech earnings, as the 10-year yield and oil continued to drift higher overnight.

There were no new strikes between the U.S. and Iran overnight but tensions remain elevated and oil and the 10-year yield are up slightly as a result.

DELL earnings beat estimates and the stock is up 8% pre-market as AI related earnings remain very strong.

Today focus will remain primarily on geopolitics and any positive headlines about ceasefire progress should pressure oil and yields and help lift stocks.

On the economic front, there are two notable reports today: ADP Employment Report (E: 48K) and Fed Beige Book (2:0 p.m. ET).  Solid (but not great) numbers from ADP and generally supportive commentary of economic growth from the Beige Book should underscore a solid economy but not raise rate hike concerns (that’d be the best case for stocks).

 

How to Talk to Clients About the Wars (From a Market Standpoint)

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What’s in Today’s Report:

  • How to Talk to Clients About the Wars (From a Market Standpoint)

Futures are moderately weaker as higher oil prices and rising global bond yields pressure stocks.

Global bond yields extended Monday’s gains overnight as the 10-year Japanese Government Bond yield hit 3.00% for the first time since 1996.

Economic data was solid as EU and UK manufacturing PMIs were in-line, while EU Core HICP (their CPI) beat estimates.

Focus today will remain on bond yields and the higher they go, the lower stocks will go.  The events that will influence yields today include 1) Any geopolitical headlines (any reports of ceasefire progress will pressure yields) and 2)  Economic data. Important reports today include the ISM Manufacturing PMI (E: 55.2) and JOLTS (E: 7.35 million) and the closer to in-line they are, the better for yields.  There is also one Fed speaker, Barr (9:05 a.m. ET), but he shouldn’t move markets.

Finally, on the earnings front we do get several important tech/AI earnings results after the close, including DELL ($4.72), PANW ($0.51) and MDB ($1.61).

 

Why A Hawkish Fed Isn’t Necessarily Bad for Markets

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What’s in Today’s Report:

  • Why A Hawkish Fed Isn’t Necessarily Bad for Markets
  • Weekly Market Preview: Is Economic Growth Stable? (It Needs to Be)
  • Weekly Economic Cheat Sheet: The “Big Three” Monthly Reports This Week (including the Jobs Report)

Futures are marginally lower after the U.S. and Iran traded attacks for the first time in weeks.

The U.S. and Iran traded strikes over the weekend in the first military exchange in weeks and oil prices are 3% higher in response, although markets still do not expect material escalation (which is why futures aren’t down more).

Economically, Chinese data was mixed as the manufacturing PMI beat estimates (49.8 vs. (E) 49.5) while non-manufacturing was slightly weak (49 vs. (E) 49.4).

Today there are no notable economic reports or Fed speak so focus will remain on geopolitics.  Markets still strongly assume there won’t be any material military escalation between Iran and the U.S. but if the headlines turn negative on that front, it’ll introduce a new headwind on the market.

 

What Does “40 Trillion” Mean for Stocks?

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What’s in Today’s Report:

  • What Does “40 Trillion” Mean for Stocks?

Futures are little changed following generally “fine” tech earnings overnight and as markets await Fed Chair Warsh’s speech.

Tech earnings (MRVL, WDAY) were solid but the tech sector is seeing some profit taking following Thursday’s big NVDA driven rally.

Economically, French Core HICP (their CPI) rose 2.7% vs. (E) 2.4% y/y, further solidifying ECB rate hike expectations.

Today focus will be on Fed Chair Warsh’s commentary (10:00 a.m. ET) and markets will want to hear 1) A firm commitment to get inflation back to 2% but also 2) No hints of a sustained rate hike cycle (a one and done rate hike in September won’t hurt markets).  The key to indicator to watch through the speech is the 10 year Treasury yield, if it rises during or after the speech that will be a negative for markets.

 

Is the Debasement Trade Back?

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What’s in Today’s Report:

  • Is the Debasement Trade Back?

Futures are moderately higher following stronger than expected tech earnings and guidance overnight.

Nvidia earnings were generally in-line but guidance was much stronger than expected (70% revenue growth next year) and that’s boosting tech and futures.

Economically, German GfK Consumer Climate was better than expected (-26.6 vs. (E) -29.2).

Today we do get one economic report, Jobless Claims (E: 208K), but the real focus will be on earnings as there are several notable reports including, in order of importance:  MRVL ($0.65), WDAY ($1.26), ULTA ($6.20), AFRM ($0.33), BBY ($1.37), DG ($2.00) and DLTR ($1.12). Strong earnings (and solid guidance) will help stocks extend this early rally.

 

New ETFs for Your Watchlist (July Launches)

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What’s in Today’s Report:

  • New ETFs for Your Watchlist (July Launches)
  • Chart – Home Sales Fall Amid Elevated Prices

Futures are slightly lower on weak software company guidance ahead of key inflation data and NVDA earnings today.

INTU beat earnings and revenue estimates, but forward guidance fell short of lofty expectations which is dragging software stocks and the broader tech complex lower ahead of the bell.

Today, focus will be on economic data early with the Fed’s preferred measure of inflation, the Core PCE Price Index (E: 0.2% m/m, 3.3% y/y) due to be released before the open. Additionally, Durable Goods Orders (E: 0.5%) and Q2 GDP (E: 1.5%) will be released this morning, shedding light on the health of U.S. growth and demand metrics.

Later in the day, the Treasury will hold a 4-Month Bill auction (11:30 a.m. ET) and a 5-Yr Note auction (1:00 p.m. ET) and the Fed’s Barkin will speak leading into the lunch hour (11:45 a.m. ET).

Finally, focus will shift to one of the seasons most important earnings releases due after the close with NVDA ($2.09) results looming large. Other names reporting today include: KSS ($0.55), WSM ($2.05), CRM ($2.35), CRWD ($0.05), OKTA ($0.44), and HPQ ($0.66), but again NVDA will be the key report to watch.

 

Two Reasons Tech Dropped on Monday

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What’s in Today’s Report:

  • Why Did Tech Drop on Monday? – Two Reasons
  • Why Treasury Bond Repurchases Matter to You

Futures are higher with tech/semis leading amid fresh geopolitical optimism surrounding a NYT report that the U.S. government plans to re-staff Middle East embassies, a sign that no further military escalations with Iran are anticipated.

Economically, German data beat estimates as Q2 GDP rose 1.0% vs. (E) 0.9% and the August Ifo Survey’s headline Business Climate figure rose to 88.8 vs. (E) 87.1 which is helping fuel risk-on money flows in early trade.

Looking ahead to today’s session, there are multiple economic reports to watch including the Case-Shiller Home Price Index (E: 1.8%), Consumer Confidence (E: 90.1), and New Home Sales (E: 620K). Additionally, there is one Fed official scheduled to speak today: Barkin (8:00 a.m. & 4 p.m. ET).

Finally, while earnings season is winding down, there are still a handful of notable companies due to report (NVDA’s results tomorrow will be the big release for the week). Today, DKS ($3.78), BMO ($2.71), BNS ($1.53), GFI ($1.10), INTU ($2.12), and ZM ($1.01) will all report Q2 earnings.

For this morning’s pre-market advance to hold, investors will be looking for the decline in oil and drop in yields to hold through the open as economic data to come in “Goldilocks” and Fed speak to track “less-hawkish.” If oil and/or yields rebound, equities will face a renewed, familiar set of market headwinds.

 

Three Important Events for Yields & Markets (This Week)

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What’s in Today’s Report:

  • Three Important Events for Yields & Markets (This Week)
  • Weekly Market Preview: Can Yields Decline (and Ease Pressure on Stocks)
  • Weekly Economic Cheat Sheet: Focus on the Fed (via Core PCE and Warsh’s speech)

Futures are slightly lower as investors digest rising trade tensions and await details of economic sanctions against Iran.

The U.S. applied a 50% tariff to Canadian imports and while exemptions will keep the actual impact small, this is negative for investor/market sentiment.

Details of new economic sanctions against Iran will be revealed this afternoon but unless they boost the chances of a ceasefire, they won’t impact markets.

Today there are no notable economic reports so focus will remain on geopolitics and the 2:00 p.m. ET reveal of the new economic sanctions against Iran.  However, unless the moves are viewed as realistically increasing the chances of a ceasefire, they shouldn’t move markets (and oil remains the key indicator to watch).