Tom Essaye Quoted in Benzinga on August 12, 2021
3 Things That Could Send The S&P 500 Down 20%
The consensus expectations for the Federal Reserve monthly asset purchasing is that the Fed…Essaye said. Click here to read the full article.
Inflation Update (Post CPI/PPI)
What’s in Today’s Report:
- Inflation Update (Post CPI/PPI)
Futures are again little changed following another generally quiet night of news.
Economic data was minimal as the only notable report was EU exports, which missed expectations falling –0.7% vs. (E) 0.6%, but that’s not moving markets.
On the COVID front, there were mixed headlines. ABNB said it has seen a small slowdown in bookings because of Delta (a negative), but COVID cases have potentially peaked in China (a positive). In sum, the headlines were mixed enough that they aren’t moving markets, but we will continue to watch for more evidence that the Delta variant is altering consumer behavior.
Today the key report will be the inflation expectations in Consumer Sentiment (E: 81.4) but as long as that doesn’t spike higher, it shouldn’t move markets. Instead, COVID headlines will continue to move markets and if there is more evidence the Delta variant is impacting travel/leisure, that will be a headwind on stocks.
Yield Curve Update (Reflation vs. Stagflation)
What’s in Today’s Report:
- Yield Curve Update (Reflation vs. Stagflation)
- EIA and Oil Market Update
Futures are little changed following a generally quiet night of news.
Economic data was slightly underwhelming as UK Industrial Production (-0.7% vs. (E) 0.3%) and Euro Zone IP (-0.3% vs. (E) -0.2%) both missed estimates, although neither is weighing materially on markets.
Covid headlines remained largely unchanged, although Hawaii is reimposing restrictions on social gatherings. But, that headline isn’t enough to weigh on markets broadly, as the broad response to rising cases remains mask mandates and increased vaccinations (which aren’t material headwinds on the recovery yet).
Today focus will be on Jobless Claims (E: 378K) and markets will want to see the number continue to gradually decline (but not drop so fast that it makes the Fed taper more quickly). We also get Final PPI (E: 0.6% m/m, 7.3% y/y) but given yesterday’s CPI wasn’t hotter than expected, PPI shouldn’t move markets.
Market Multiple Levels: S&P 500 Chart
What’s in Today’s Report:
- Market Multiple Levels: S&P 500 Chart
- NFIB Small Business Optimism Index: Labor Market Issues Remain a Headwind
Futures are slightly lower while global shares extended recent gains overnight ahead of key inflation data and more progress on U.S. infrastructure and spending plans.
After passing the bipartisan $1.2T infrastructure bill yesterday, the Senate narrowly passed a $3.5T spending plan aimed at fighting climate change and poverty overnight however neither of the bills is likely to be taken up in the House until after the summer recess in September.
Economically, German CPI met estimates of 0.9% in July which did not have a material impact on markets.
Today, the focus will be on economic data early with the July CPI report due out ahead of the bell (E: 0.5% m/m, 5.5%y/y).
Then after the open, there are a couple of Fed speakers to watch: Bostic (10:30 a.m. ET) and George (12:00 p.m. ET). The narrative has been shifting slightly more hawkish recently so look for a continuation of that trend in the speeches which may cause a further rise in Treasury yields today.
Finally, in the early afternoon, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. If the outcome is weak (tails) expect a continued move higher in longer maturity yields that will have some degree of hawkish impact across asset classes while a strong auction would likely see yields pull back from their recent gains which would likely offer a boost to growth/tech stocks.
Tom Essaye Quoted in CNBC on August 9, 2021
Crude falls on surging Covid cases, following worst week since October for oil
The oil market is likely to remain rangebound here as the physical market is poised to…said Tom Essaye, editor of the Sevens Report. Click here to read the full article.
Market Multiple Table: August Update
What’s in Today’s Report:
- Market Multiple Table: August Update
- Chart: JOLTS Hit New Record
Stock futures are little changed this morning as investors digest Monday’s hawkish Fed chatter and continue to monitor the status of the Delta variant outbreak around the globe.
Economically, Germany’s August ZEW Survey was moderately disappointing while domestically, the NFIB Small Business Optimism Index came in at 99.7 vs. (E) 103.3, however neither report is materially moving markets given the recent focus on the very strong July jobs report in the U.S.
On infrastructure, the $1.2T bipartisan bill is expected to pass a final vote in the Senate later this morning but that has largely been priced into markets already.
Today, there is one economic report to watch: Productivity and Costs (E: 3.5%, 1.2%) and one Fed speaker: Evans (2:30 p.m. ET).
Additionally, there is a 3-Year Treasury Note auction at 1:00 p.m. ET, and a soft outcome could result in another wave of hawkish money flows like we saw on Monday (yields higher, dollar higher, mixed price action in equities).
Tom Essaye Quoted in Crain’s Cleveland Business on August 6, 2021
Wall Street is watching where you’re going to make some big bets
Rising COVID cases will only hurt the market if they result in a change in…Tom Essaye, a former Merrill Lynch trader who writes the “Sevens Report” newsletter, wrote in a note. Click here to read the full article.
Tom Essaye Quoted in The Byron Review on August 6, 2021
Jobs increased by 943,000 in July; Unemployment rate drops to 5.4%
The July jobs report reinforces the fact that the Fed will reduce its quantitative easing over the…Tom Essaye, founder and chairman of Sevens Report Research said. Click here to read the full article.
Tom Essaye Quoted in India’s Investing.com on August 6, 2021
Copper: As Bears Claw The Red Metal, Could It Slip Below $4?
The point to watch is whether the price falls to $4.20…Tom Essaye, founder of Sevens Report Research, said in a note. Click here to read the full article.
Tom Essaye Quoted in CNBC on August 5, 2021
10-year Treasury yield tops 1.2% after weekly jobless claims data matches expectations
Negatively, there remain aggressive buyers on Treasury dips and it’s going to take a real, impactful headline…Tom Essaye of Sevens Report said in a note. Click here to read the full article.
