An Important Few Weeks for Bonds

/in , /by

What’s in Today’s Report:

  • Why The Next Few Weeks Are Critical for the Bond Market
  • Weekly Market Preview:  Earnings Season Starts
  • Weekly Economic Cheat Sheet:  Inflation This Week

Futures are slightly lower following a very quiet weekend of news as markets wait for the start of earnings this week along with updated inflation data.

G-20 finance ministers agreed to move forward with a plan for a global minimum tax, but this remains a very, very long way from actual implementation.

China’s reserve requirement ratio cut remained top of the news but it’s unlikely to provide major stimulus and as such it’s not a material bullish catalyst for global stocks.

Today there are no economic reports and just two Fed speakers: Williams (9:30 a.m. ET) and Kashkari (12:00 p.m. ET).  As was the case last week, we expect yields to dictate trading in stocks, so if Treasury yields continue to bounce, stocks should extend Friday’s rally.

Inflation Expectations Dashboard

/in , /by

What’s in Today’s Report:

  • Inflation Expectations Dashboard
  • EIA Data Takeaways and Oil Update

U.S equity futures are rebounding with European shares this morning while bond yields are rising from multi-month lows as investors digest a volatile week amid economic uncertainty and renewed COVID-19 concerns.

Economically, Chinese inflation data was “cooler” than expected with June CPI falling from 1.3% to 1.1% vs. (E) 1.4%, helping solidify the idea that inflation has peaked.

Looking ahead to today’s session, the calendar is quiet as there are no notable economic reports and no Fed officials are scheduled to speak.

That will likely leave investors to focus on any developments regarding the Delta variant of COVID-19 and any subsequent lockdown measures as well as price action in the bond market. As long as coronavirus headlines are not materially negative and bond yields extend this morning’s bounce, stocks should be able to claw back more of yesterday’s losses.

Market Multiple Levels: S&P 500 Chart

/in , /by

What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart
  • May JOLTS Report Takeaways

Stock futures are sharply lower along with most international equity markets this morning while bond yields are extending recent declines amid new COVID-19 concerns.

Japanese Prime Minister, Yoshihide Suga, issued a state of emergency for Tokyo overnight and the latest reports suggest spectators will be banned from the summer Olympics which is weighing heavily on investor sentiment today.

10-Year yields are down another 7 basis points in early trade while travel and leisure shares are leading markets lower in the pre-market, underscoring concerns about the state of the economic recovery and emerging concerns surrounding the Delta variant of COVID-19.

Today, there is just one economic report: Jobless Claims (E: 353K) and no Fed officials are scheduled to speak.

Investors will be looking for a continued drop in the weekly jobless claims data but focus will likely be on COVID-19 trends and the latest lockdown developments as the health of the economic recovery is reassessed.

Market Multiple Table: July Update

/in , /by

What’s in Today’s Report:

  • Market Multiple Table: July Update
  • OPEC+ Update

U.S. stock futures are trading modestly higher with tech shares outperforming (Nasdaq futures are at a fresh record) as bond yields continue to fall to multi-month lows ahead of the Fed Minutes release this afternoon.

Economically, German Industrial Production fell -0.3% vs. (E) +0.5% in May, adding to a recent string of disappointing global economic data that has been pressuring bond yields.

Today, there is just one economic report to watch: May JOLTS (E 9.30M), and while it’s a dated release, some components of the report could shed some new light on the current trends of the labor market.

Looking to the Fed, the release of the June FOMC Meeting Minutes (2:00 p.m. ET) will be the main focus today as investors look for further clarity on the Committee’s taper timeline and eventual plans for raising rates. Additionally, Atlanta Fed President Raphael Bostic speaks at 3:30 p.m. ET.

Tom Essaye Interviewed by Yahoo Finance on July 1, 2021

/in , /by

Why a ‘too hot’ jobs number could spell trouble for markets.

As I said in my morning report, for the first time in years, I’m actually worried about a too…said Tom Essaye, founder of Sevens Report Research. Click here to read the full interview.

Tom Essaye Quoted in Barron’s on July 1, 2021

/in , /by

Stocks Close Up. The S&P 500 Hits Another High.

Markets will want ‘Goldilocks’ data to start the quarter, in that the numbers show solid…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Second Half Outlook

/in , /by

What’s in Today’s Report:

  • Second Half Outlook
  • Weekly Economic Cheat Sheet

Stock futures are little changed with investors focused on OPEC+’s failure to reach a new output policy agreement yesterday while economic data was mixed overnight.

OPEC+ called off a follow-up meeting yesterday after the UAE would not agree to extending production cuts through 2022 which drove oil to new multi-year highs in overnight trading as current cuts will remain in place by default, deepening supply deficit expectations for the second half of the year.

Economically, Final Composite PMI reports were mostly as expected while EU Retail Sales topped estimates but none of the data materially moved markets overnight.

Today, there is just one notable economic report to watch: ISM Services Index (E: 63.5), and no Fed officials are scheduled to speak. That will leave investors focused on the oil market in the wake of the OPEC+ developments as well as awaiting any news on infrastructure as the calendar is otherwise fairly quiet as we start the holiday-shortened trading week today.

Tom Essaye Quoted in Yahoo News on June 30, 2021

/in , /by

Welcome to a new era of eating habits

This is the first quarter where we can honestly say it looked more like the…says Tom Essaye, a former trader who writes the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Barron’s on July 1, 2021

/in , /by

Walgreens Dips, Micron Falls, and Stocks Are Steady After Jobless Claims Data

Markets will want ‘Goldilocks’ data to start the quarter, in that the numbers show solid activity, but…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Jobs Day

/in , /by

What’s in Today’s Report:

  • Why Inflation Might Not Be As Temporary as the Fed Thinks
  • OPEC Update and Oil Outlook

Futures are slightly higher ahead of the jobs report following a quiet night of news.

The only notable economic report overnight was Eurozone PPI, which rose 9.6% yoy vs. (E) 9.5% yoy.  That report isn’t moving markets, but it’s the second inflation report in two days to imply inflation pressures haven’t peaked.

There were no new developments on infrastructure.

Today the jobs number is key and expectations are as follows: Job Adds 675K, UE Rate 5.7%, Wages yoy 3.1%.  As long as the headline job adds number isn’t close to 1 million and the wages number doesn’t spike well above expectations, markets should be able to generally digest this report, even if it is a mild surprise.

Other economic indicators today include International Trade in Goods (E: -$71.2B) and Factory Orders (E: 1.3%) but we don’t expect them to move markets.