Tom Essaye: Markets Expect ‘Cooler Heads’ to Prevail in U.S.-China Trade Tensions

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Sevens Report says tariff threats are unlikely to weigh heavily on stocks unless a full-scale trade war erupts.

Markets believe U.S., China will find trade compromise – Sevens Report Research

According to Sevens Report Research, investors remain largely unfazed by renewed U.S.-China trade tensions, with markets betting that both sides will ultimately compromise. Tom Essaye noted that while President Trump’s tariff threats and Beijing’s export limits on rare earths have raised concerns, optimism ahead of a planned meeting between Trump and Xi Jinping has kept sentiment stable. Essaye said “scary headlines” are unlikely to drive markets lower as long as traders believe a full-blown trade war can be avoided. For now, stock direction remains more influenced by economic growth and AI enthusiasm.

Also, click here to view the full article published in Investing.com on October 21st, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

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Are Rare Earth Materials the New AI?

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What’s in Today’s Report:

  • Are Rare Earth Materials the New AI?
  • Precious Metals Update – Is the Gold Rally Over?

Futures are steady this morning amid a mostly quiet macroeconomic backdrop with tech shares lagging after NFLX (-6.5%) and TXN (-7.7%) missed on earnings after the close yesterday.

Economically, U.K. CPI was unchanged at 3.8% vs. (E) 4.0% y/y in September, further easing global inflation worries.

There are no economic reports today and just one Fed official scheduled to speak later in the day: Barr (4:00 p.m. ET).

The Treasury will hold auctions for 4-Month Bills (11:30 a.m. ET) and 20-Yr Bonds (1:00 p.m. ET) which could impact fixed income markets and subsequently move equities amid an otherwise mostly quiet day today.

Finally, on the earnings front, we will get quarterly results from GEV ($1.78), T ($0.55), TMO ($5.50), TSLA ($0.41), IBM ($2.43), KMI ($0.28), and CME ($2.63) today with TSLA being in the spotlight as the first Mag-7 member to release earnings this season.

 

Are Negative Trade War Headlines a Risk to the Rally?

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What’s in Today’s Report:

  • Are Negative Trade Headlines a Risk to the Rally

Futures are modestly lower amid light profit taking after a mostly quiet night of news as traders await more important earnings releases due out this week.

There were no notable economic reports overnight and no material developments on either the U.S.-China trade front or the government shutdown negotiations.

There are no economic reports today, however the Treasury will hold 4-Week, 6-Week, 8-Week, and 4-Month T-Bill auctions between 11:00 and 11:30 a.m. ET. Bill auctions typically do not warrant much attention, but yesterday’s strong short-term Treasury auctions did coincide with a slowdown in the S&P 500’s intraday advance as economic angst seems to be building in the absence of major data recently.

There is one Fed speaker to watch today with next week’s October FOMC meeting coming into view: Waller (9:00 a.m. & 3:30 p.m.) and anything less than the dovish-leaning tone of recent could weigh on stocks.

Finally, earnings season continues with: KO ($0.78), GE ($1.46), LMT ($6.33), MMM ($2.10), NFLX ($6.89), ISRG ($1.99), and COF ($4.20) all due to report today, and investors will want to continue to see net positive surprises on both the top and bottom line to support optimism surrounding strong and resilient corporate financials in H2’25.

 

Tom Essaye: 10-Year Yield Recovery Key for Stock Market Stability

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Sevens Report says credit fears at regional banks are unlikely to sustain yield declines unless they worsen.

10-year Treasury yield edges up after falling below 4% on regional-bank worries

The 10-year Treasury yield hovered near 4% Friday after dipping below that level amid renewed concern over regional bank loans. Tom Essaye of Sevens Report Research said that while credit fears briefly drove yields lower, they are unlikely to keep falling unless the issue becomes a broader economic problem. He added that a move back above 4% would be a positive signal for stocks, reflecting easing market anxiety.

Also, click here to view the full article published in MarketWatch on October 17th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Jamie Dimon’s “Cockroach” Warning Puts Credit Markets on Watch

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Recent bankruptcies raise concern over broader economic stress, with Sevens Report highlighting the Baa-over-Treasuries spread as a key risk gauge.

What to Watch for Signs of Broader Credit Market Stress

Jamie Dimon’s remark that “when you see one cockroach, there’s probably more,” referencing the bankruptcy of subprime auto lender Tricolor Holdings, has sparked new worries about hidden credit-market stress. Alongside the collapse of auto-parts maker First Brands, investors are questioning whether these cases are isolated or signs of broader weakness. According to Sevens Report analysis, the key metric to monitor is the Baa-over-Treasuries spread, a measure of risk in high-yield credit. A move toward 2.00% from the current 1.72% would signal rising systemic stress and increased downside risk for equities.

Also, click here to view the full article published in Barron’s on October 17th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.

Should We Really Be Worried About Banks/Credit?

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What’s in Today’s Report:

  • Should We Really Be Worried About Banks/Credit?
  • Weekly Market Preview:  Focus Shifts to Earnings (And Tech Earnings Need to Be Strong)
  • Weekly Economic Cheat Sheet:  Flash PMIs on Friday the Key Report

Futures are modestly higher on China optimism and as investors look ahead to an important week of earnings.

Chinese GDP beat estimates (1.1% vs. (E) 0.8%) implying that global growth is stable, while a meeting between Treasury Secretary Bessent and Chinese Vice Premier Lifeng on Friday could lower U.S./China trade tensions.

Politically, there was no substantive progress towards ending the shutdown over the weekend.

Today there is only one economic reading, Leading Indicators (E: 0.01%) but it shouldn’t move markets.

Turning to earnings, there are two notable reports today, CLF ($-0.48) and CCK ($1.98), but the key reports come later this week (NLFX, TSLA and INTC all report this week among other notables).

 

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist

Futures are moderately lower mostly on continued concerns about loan quality for U.S. banks, although nothing new happened overnight to specifically pressure stocks.

Economically, the only notable report was EU HICP (their CPI) and it was a bit hot, as Core HICP rose 0.2% vs. (E) 0.1% m/m and 2.4% vs. (E) 2.3% y/y.

Today there are some economic reports, including Housing Starts (1.315M), Import & Export Prices (E: -0.2% m/m, 0.0% m/m) and Industrial Production (E: 0.1%).    There is also one Fed speaker, Musalem (12:15 p.m. ET).

However, they are unlikely to move markets.  Instead, focus on credit and loan quality at banks will be the main market driver and any headlines that imply TriColor and First Brands are isolated incidents (which they likely are) will help stocks rebound.

Finally, earnings season rolls on and some reports to watch today include:  SLB ($0.67), AXP ($3.96), STT ($2.62).

 

Are Tri-Color and First Brands “Cockroaches?”

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What’s in Today’s Report:

  • Are Tricolor and First Brands “Cockroaches?”

Futures are solidly higher following better than expected Taiwan Semiconductor earnings (TSM).

TSM beat earnings and raised guidance, as chip demand is still very strong while the AI cap-ex boom remains in force.

Today there are two notable economic reports, Philly Fed (E: 7.5) and the Housing Market Index (E: 33) along with numerous Fed speakers.  From a data standpoint, given the lack of economic reports lately, solid readings from both reports will be welcomed by investors as it will help reinforce that growth is stable.

Turning to the lineup of Fed speakers today, Waller at 8:00 a.m. ET is likely the only potential market mover because he’s in the running to be the next Fed chair.  Other Fed speakers today include Barkin (8:00 a.m., 12:45 p.m. & 4:30 p.m. ET), Miran (9:00 a.m. & 4:15 p.m. ET), Bowman (10:00 a.m. ET), Kashkari (6:00 p.m. ET).

Finally, earnings season continues to gain momentum and some reports we’ll be watching today include:  TSM ($2.59), SCHW ($1.23), BK ($1.76), USB ($1.11), TRV ($5.88), IBKR ($0.50), CSX (0.42).

Credit Spreads: Are We Seeing Liquidity Tightening?

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What’s in Today’s Report:

  • Credit Spreads: Are We Seeing Liquidity Tightening?

U.S. futures are solidly higher with European equity markets thanks to strong earnings from LVMH and ASML.

Economically, Eurozone Industrial Production fell -1.2% vs. (E) -1.6% m/m in August.

Today, there is one economic release to watch: the Empire State Manufacturing Index (E: -0.9) and a 4-Month Treasury Bill auction at 11:30 a.m. ET that could move short duration yields.

Additionally, today will be a busy day of Fed Speak with Miran (9:30 a.m. & 12:30 p.m. ET), Bostic (12:10 p.m. ET), Waller (1:00 p.m. ET), and Schmid (1:35 p.m. ET) all scheduled to deliver comments over the course of the day.

Finally, investors will remain keenly focused on earnings with quarterly reports due from ASML ($6.36), BAC ($0.94), MS ($2.08), PGR ($5.08), ABT ($1.30), UAL ($2.64), and JBHT ($1.48) today.

 

Oil Prices Hover Near Key Support as Downside Bias Persists Says The Sevens Report

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Sevens Report’s Tom Essaye says WTI crude remains technically bearish, with $60–$61 marking a crucial line for oil bulls.

Oil: Ceasefire Deal Reinforces Bearish Technical Trend

Commodities have maintained a downside bias as easing Middle East tensions weigh on oil markets, according to Tom Essaye, president of the Sevens Report. He notes that WTI crude has been in a bearish trend since August 2024, with $60–$61 per barrel serving as a critical technical support zone. A decisive break below could spark a drop toward $57. Rising global supply from OPEC+ and near-record U.S. production, combined with softer demand expectations, keep risks tilted lower. Still, Essaye cautions that with sentiment crowded to the bearish side, oil remains vulnerable to a short-covering rally on any bullish surprises.

Also, click here to view the full article on Moneyshow.com published on October 13th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.

Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.