What “Frontier” AI Slowing Means for the Market

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What’s in Today’s Report:

  • What “Frontier” AI Slowing Means for the Market
  • Fed Day

Futures are modestly higher on a bounce ahead of this afternoon’s Fed decision, following a quiet night of news.

Geopolitically there were no new negative headlines overnight and that lack of more bad news is prompting a mild bounce in oil (Brent crude down 1%).

Economic data was solid overnight as UK CPI met expectations (core CPI 2.6% y/y) while Euro Zone Industrial Production beat estimates (-0.1% vs. (E) -0.5% m/m).

Focus today will be on the Fed and the best case for markets is a rate hike with a “one or two hikes and done” message.  Outside of the Fed, geopolitics stay important and any positive headlines (again, even in tone) will likely cause a drop in oil/rates and help lift stocks.  Finally, we also get August Retail Sales (E: 0.7%) and markets will want to see consumer spending holding up despite growing price headlines.

 

FOMC Preview (It’s Not Just About a Rate Hike)

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What’s in Today’s Report:

  • FOMC Preview (It’s Not Just About a Rate Hike)

Futures are extending Monday’s losses and are modestly lower as there were no positive headlines in the Mid-East and oil (and yields) rallied further as a result.

Brent crude is up another 1% as there was no improvement in the trifecta of concerns in the Mid-East: Hormuz traffic, Houthis seizing Yemeni coast and the continued shutdown of the Saudi East-West pipeline.

Economic data was mixed as UK unemployment slightly beat while the German ZEW Biz Expectations missed.

Today focus will remain on the Mid-East and any positive headlines (even just in tone) should pressure oil and yields and help stocks lift. However, if there are more negative headlines, expect the opposite: Higher oil, higher yields and even lower stocks.  Outside of geopolitics, we do get the first look at September economic activity via Empire Manufacturing (14.1) and the more Goldilocks the number (solid headline but stable or declining price indices) the better for markets.

 

The Biggest Reason Behind the Pullback

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What’s in Today’s Report:

  • The Biggest Reason Behind the Pullback
  • Weekly Market Preview: Ceasefire hopes and the Fed (It’s Potentially a Critical Week)
  • Weekly Economic Cheat Sheet: Fed Decision on Wednesday is the Key

Futures are moderately lower on a rebound in oil prices as tensions in the Gulf worsened over the weekend.

The Gulf states/Iran meeting about Hormuz, which was the main catalyst for Friday’s rally, was postponed while the Houthis continued to seize land on the Red Sea coast and the Saudi East-West pipeline was shut due to damage.

All three events are raising concerns about the supply of oil exiting the Persian Gulf and oil is 2% higher as a result.

Today there are no notable economic reports nor any Fed speakers so focus will stay on geopolitics. Any hints of progress towards a ceasefire (including scheduling meetings) will be an immediate positive, while any reports of further fighting will push oil and Treasury yields higher and stocks lower.

 

Putting New or Idle Cash to Work During Volatility Season

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What’s in Today’s Report:

  • Putting New or Idle Cash to Work During Volatility Season

Futures are higher as lower oil prices and retreating bond yields support stocks ahead of today’s CPI report.

Geopolitically, reports that Gulf states may meet with Iranian officials next week are easing concerns surrounding the Strait of Hormuz and weighing on oil prices.

Economically, UK monthly GDP rose 0.4% vs. (E) 0.0% in July.

Today, market focus will be almost exclusively on inflation data before the bell with CPI (E: 0.4% m/m, 3.4% y/y) and Core CPI (E: 0.2% m/m, 2.4% y/y) due out at 8:30 a.m. ET, followed by Consumer Sentiment (E: 51.2).

Finally, only one notable earnings report is due today, KR ($1.05), so markets will focus primarily on economic data and geopolitics.

 

Monthly Bitcoin & Crypto Update (September)

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What’s in Today’s Report:

  • Can AI Continue to Support This Market?
  • Monthly Bitcoin & Crypto Update (September)

Futures are mixed as investors monitor rising oil prices and ongoing Middle East tensions ahead of key inflation data.

Geopolitically, Iran-backed Houthis reported airstrikes in Yemen, adding to concerns about a broader Middle East conflict.

Economically, German Final CPI met estimates at 0.2% m/m in August.

Today, focus will be on PPI (E: 0.4% m/m, 5.3% y/y) ahead of Friday’s CPI report. A cooler PPI print would be welcomed by stocks, while a hot print could push yields and oil higher. Jobless Claims (E: 208K) and Existing Home Sales (E: 3.97M) are also due today.

Finally, the Treasury will hold 4-Week and 8-Week Bill auctions at 11:30 a.m. ET and a 30-Yr Bond auction at 1:00 p.m. ET. Notable earnings include ORCL ($1.40), ADBE ($4.86), and M ($0.37).

 

Alpha Webinar: When Does Rising Oil Become a Problem?

Oil prices are moving markets again, but the real question isn’t simply whether crude goes higher—it’s when rising oil becomes a meaningful problem for inflation, bond yields and stocks.

That’s the focus of today’s Sevens Report Alpha webinar, live at 1:30 p.m. ET.

We’ll examine the Strait of Hormuz and actual oil flows, alternative routes for Persian Gulf supply, why diesel markets matter, and, importantly, the oil-price levels that could signal conditions are becoming materially worse—or beginning to improve.

The goal isn’t to predict the next move in crude. It’s to give you a practical framework for understanding when oil is a manageable market risk and when it becomes a sustained headwind for stocks and bonds.

Click here to learn more and join today’s Alpha webinar.

September MMT: Headwinds Present but Earning Growth a Major Positive

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What’s in Today’s Report:

  • September Market Multiple Table (MMT): Headwinds Present but Earnings Growth a Major Positive

Futures are modestly lower as the U.S. and Iran again exchanged reciprocal strikes overnight, sending oil prices higher.

Brent crude rose above $100/bbl for the first time since May after the U.S. and Iran traded strikes on oil tankers and naval vessels, further diminishing any near term hopes for ceasefire progress.

Economically, the only notable report was Chinese CPI which beat expectations (0.8% y/y vs. (E) 0.4% y/y).

Today there are no notable economic reports (the key reports this week come Thursday/Friday via PPI/CPI) so focus will stay on geopolitics and the story remains the same:  Any hint of the U.S. or Iran seeking a ceasefire will push oil lower and help stocks rebound, while more reciprocal strikes will only further boost oil prices and pressure stocks.

Beyond oil, we need to watch treasury yields.  So far this week they haven’t rallied despite higher oil prices (the looming CPI is likely keeping them stable) but if that changes and yields start to rise on higher oil prices, the downward pressure on stocks will increase.

 

Recipe for a Rally (Three Ingredients)

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What’s in Today’s Report:

  • Recipe for a Rally (Three Ingredients)
  • Weekly Market Preview: Yields Remain Key (Geopolitics and Inflation in Focus)
  • Weekly Economic Cheat Sheet: CPI (Friday) is the Key Report This Week

Futures are modestly lower on higher oil prices as geopolitical risks rose over the long weekend.

Oil prices hit multi-month highs and that’s directly weighing on global stocks as Iran launched an unsuccessful attack on a U.S. Naval vessel and the U.S. sunk three Iranian tankers in response, keeping tensions elevated and the prospect of a near term ceasefire low.

In Russia, there was no progress on a Russia/Ukraine ceasefire despite U.S./Russian meetings over the weekend.

Today there are no notable economic reports nor any major Fed speakers so focus will remain on geopolitical headlines, oil and Treasury yields.  As has been the case for the past few weeks, any headlines that push oil and yields lower will help stocks rally (and if oil and yields keep rising, stocks will continue their decline).

 

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).