Tom Essaye Quoted in Barrons on May 7, 2021
Roku Pops, Peloton Jumps, and Tech Is on a Tear
“Today’s focus will be on the Employment…” writes Tom Essaye, founder of Sevens Report, before the jobs report emerged. Click here to read the full article.
Tom Essaye Interviewed with Yahoo Finance on May 6, 2021
New jobless claims fall to fresh pandemic-era lows
Sevens Report Research Founder & President Tom Essaye joins Yahoo Finance Live to discuss the latest market action following better-than-expected jobless claims. Click here to watch the full interview.
Jobs Report Preview (Too Hot is the Risk)
What’s in Today’s Report:
- Jobs Report Preview (Too Hot Is the Risk)
- EIA Analysis and Oil Market Update
Futures are modestly higher as markets digest yesterday’s dovish Fed rhetoric while data overnight was solid.
German Manufacturers’ Orders and Euro Zone Retail Sales both beat estimates, again implying the economic recovery in Europe is gaining momentum (this is positive for European stocks).
Fed officials repeated their dovish stance yesterday with Vice Chair Clarida reinforcing it’s not time to think about tapering despite rising inflation and strong growth.
Today focus will be on weekly Jobless Claims (E: 533K) and again markets will want to see them hold the gains of the past few weeks. We also get numerous Fed speakers including (in order of importance): Williams (9:00 a.m. ET), Mester (1:00 p.m. ET), Bostic (1:00 p.m. ET) and Kaplan (10:00 a.m. ET) but we don’t expect any of them to materially move markets.
Market Multiple Levels: S&P 500 Chart
What’s in Today’s Report:
- Market Multiple Levels: S&P 500 Chart
- What to Make of Yellen’s “Rate Hike” Comments
U.S. stocks futures are recovering some of yesterday’s losses after Treasury Secretary Janey Yellen walked back earlier comments about interest rates after the close yesterday while trader focus shifts to jobs data today.
The Eurozone Composite PMI slightly topped estimates o/n (53.8 vs. E: 53.7) helping EU shares lead global markets higher today.
Looking into today’s session, there are two notable economic reports to watch: the April ADP Employment Report (E: 763K) which will offer the first look at the health of the labor market from last month, and the ISM Services index (E: 64.2). Investors will be looking for a solid ISM Services number today following the disappointing manufacturing print earlier in the week.
There are also three Fed speakers today: Evans (9:30 a.m. & 3:00 p.m. ET), Rosengren (11:00 a.m. ET), and Mester (12:00 p.m. ET) as well as a few notable companies reporting earnings: GM ($1.01), PYPL ($1.01), UBER (-$0.56).
Bottom line, if yesterday’s rate hike/higher interest rate concerns continue to subside this morning, then stocks should be able to stabilize led by a recovery in tech names however any negative surprises in economic data or hawkish comments from any of the Fed speakers could lead to renewed selling pressure today.
Market Multiple Table: May Update
What’s in Today’s Report:
- Market Multiple Table: May Update
- ISM Manufacturing PMI Takeaways
- Is the Bank of England About to Become the Second Large Central Bank to Taper QE?
Stock futures are modestly lower this morning after a mostly quiet night of news as investors continue to digest the equity market’s latest run to record highs and technology shares lag.
Economically, the U.K.’s Manufacturing PMI was 60.9 vs. (E) 60.7 in April, helping the FTSE outperform this morning.
Today, there are a few economic reports to watch early in the day including: Motor Vehicle Sales (E: 17.5M), International Trade in Goods (E: -$74.0B), and Factory Orders (E: 1.3%) however none of them should materially move markets.
There are no Fed officials scheduled to speak today and no Treasury auctions.
Earnings season is still underway with a few notable companies reporting Q1 results today including: CVS ($1.72), PFE ($0.79), and LYFT (-$0.53).
What’s Going To Move This Market Higher?
What’s in Today’s Report:
- What’s Going to Move This Market Higher?
- Weekly Market Preview: How Strong is the Global Recovery (The Stronger, the Better)
- Weekly Economic Cheat Sheet: What Happens if Friday’s Jobs Report is “Too Hot?”
Futures are modestly higher as markets bounce back from Friday’s decline thanks to solid global economic data.
Economically, German Retail Sales beat estimates, surging 7.7% vs. (E) 3.0% while the final EU manufacturing PMI slightly missed estimates at 62.9 vs. (E) 63.3. But, that’s still a strong number in an absolute sense and implies the EU economy is rebounding from COVID.
Politically, President Biden signaled support for a bipartisan infrastructure plan, which means it will be smaller than proposed but also more likely to pass and become law.
Today the key number will be the ISM Manufacturing PMI (E: 65.0) and markets will want to see continued strength in the U.S. recovery. We also get one Fed speaker, Williams at 2:10 p.m. ET, and it will be interesting to see if he acknowledges that it’s time to “talk about, talking about” tapering QE, like Dallas Fed President Kaplan did on Friday. If so, that could push the 10 year yield slightly higher.
Tom Essaye Quoted in Barron’s on April 30, 2021
Amazon Rises, Clorox Dips, and Stocks Are Down
“Futures are modestly lower on disappointing economic data…” wrote Tom Essaye, founder of Sevens Report Research in a note. Click here to read the full article.
Inflation Expectations Dashboard
What’s in Today’s Report:
- Introducing the Sevens Report Inflation Expectations Dashboard
Futures are modestly lower on disappointing economic data and despite continued strong earnings (AMZN was the latest tech company to post blow out numbers).
China’s April Manufacturing PMI surprisingly dropped to 51.1 vs. (E) 51.7 while German flash Q1 GDP also missed estimates, falling –1.7% vs. (E) 1.5%. Those two numbers imply the global economic recovery may have lost some positive momentum, and that’s why futures are lower this morning.
Today focus will be on inflation via the Core PCE Price Index (1.8%) and the inflation component of the Michigan Consumer Sentiment Index (E: 87.1). But, because the Fed is so committed to inflation being transitory, the numbers will have to be very high (well above 2% in the Core PCE Price Index) to further pressure stocks. We also get one Fed speaker, Kaplan (9:45 a.m. ET), but he shouldn’t move markets.
Finally, earnings season continues and some notable reports today include: XOM ($0.59), ABBV ($2.85), CLX ($1.47), CVX ($0.92), CL ($0.80%).
What the Fed Decision Means for Markets
What’s in Today’s Report:
- What the Fed Decision Means for Markets
- EIA Takeaways and Oil Market Update
Futures are moderately higher thanks to strong earnings from AAPL and FB combined with the market digesting the Fed’s still dovish message from yesterday. Economic data was sparse overnight as German Unemployment met expectations at 6.0% and isn’t moving markets.
Today focus will be on important earnings and economic data. Economically, the key report will be weekly Jobless Claims (E: 558K) and markets will want to see that number keep most of the gains of the past two weeks. We also get Advanced Q1 GDP (E: 6.5%) and that will generate a lot of headlines, but remember it’s an “old” number by now (it measures activity from Jan-Mar). Pending Home Sales (E: 3.8%) will also be released and there are two Fed speakers: Quarles (11:00 a.m. ET) and Williams (2:00 p.m. ET), but they shouldn’t move markets.
Regarding earnings, there are several important reports today including AMZN ($9.75) after the close. Other reports we’re watching today include: MCD ($1.81), RCL ($-4.54), MA ($1.55), CAT ($1.93), and TWTR ($0.14).
Why Does It Matter When the Fed Tapers QE?
What’s in Today’s Report:
- Why Does It Matter When the Fed Tapers QE?
- A Strong Rebound in Consumer Confidence
- Chart: Copper Hits Near-Decade Highs
U.S. stock futures are little changed this morning as a sense of “Fed paralysis” continues to grip the markets ahead of today’s FOMC announcement.
Investors are also awaiting details of Biden’s “American Families” plan and earnings from several big tech companies.
This morning, investors will be watching one economic release: International Trade in Goods (E: -$87.5B) but the report should not materially move markets given focus will largely be on the afternoon Fed events: FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET).
Although the Fed will be the main driver of markets today, there are several notable companies reporting earnings that could impact individual stock and sector trade including BA (-$1.17), GD ($2.31), and YUM ($0.85) before the open and heavyweights AAPL ($0.99), FB ($2.36), QCOM ($1.67), and F ($0.16) after the closing bell.