October Bitcoin & Cryptocurrency Update

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What’s in Today’s Report:

  • Monthly Bitcoin & Crypto Update (October)

U.S. equity futures are flat while most overseas stock markets traded lower overnight as global investors book profits amid historically high valuations and an uncertain macroeconomic outlook given the ongoing government shutdown.

Economically, Japanese PPI held steady at 2.7% vs. (E) 2.5% in September, a slightly “warm” print that supported a modest rally in the yen overnight.

Looking into today’s session, there is one noteworthy private sector economic report to watch today: Consumer Sentiment (E: 54.0, 1-Yr Inflation Expectations: 4.5%) and the results could move markets as the government shutdown has resulted in a prolonged void in official growth/inflation data this week (the better the headline and cooler the inflation outlook, the better for stocks).

Additionally, there are two notable Fed speakers today: Goolsbee (9:45 a.m. ET) and Musalem (1:00 p.m. ET), and the more dovish the commentary, the better for risk assets.

Signs of an AI bubble and an increasingly stressed consumers could dampen enthusiasm for stocks, says Tom Essaye.

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Signs of an AI bubble and an increasingly stressed lower-income consumer could dampen investors’ enthusiasm for stocks, says Tom Essaye

Three scenarios that could spook stocks in October, according to a Wall Street veteran

Signs of an AI bubble and an increasingly stressed lower-income consumer could dampen investors’ enthusiasm for stocks, says Tom Essaye, founder of the Sevens Report.

There are a few things that could spook investors in October, or the coming months.

As Halloween decorations start to appear in storefronts and on front porches across the U.S., one Wall Street veteran has decided to take a closer look at three scenarios that could spook markets as the fourth quarter gets underway.

“Over the weekend, my family and I decorated our house and yard for Halloween. While doing so, it dawned on me that much of the financial media and analyst community isn’t accurately portraying this market reality: The outlook for stocks and risk assets remains positive, but if things start to turn bad, the situation becomes downright scary from a return standpoint,” said Tom Essaye, founder and president of Sevens Report Research, in commentary shared with MarketWatch.

Also, click here to view the full article featured on Barron’s published on October 3rd, 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.

The Latest on AI Bubble Discussions

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What’s in Today’s Report:

  • The Latest on AI Bubble Discussions

Futures are little changed following a generally quiet night of news as there was no progress on resolving the shutdown and as investor attention turns to earnings.

Economically, the only notable report was German exports which declined modestly (down –3.9%).

Today there are no notable economic reports but there are several Fed speakers including, most importantly, Powell (8:30 a.m. ET).  Other Fed speakers today include Bowman (8:35 a.m. & 3:45 p.m. ET), Barr (12:45 p.m. ET), Daly (6:40 p.m. ET).  The key for markets here is clear:  If Powell (and others) reiterate their concern about the labor market and hint at more rate cuts, that should help support stocks amidst this absence of economic data.

Earnings season also kicks off this week, although next week is when results begin in earnest.  Some reports to watch today include: DAL ($1.52), PEP ($2.27), HELE ($0.34), LEVI ($0.31).

Tom Essaye Warns of “Horror-Movie” Market Scenario if AI Bubble and Consumer Stress Collide

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Essaye cautions that a deflating AI bubble, weakening consumers, and a softening labor market could trigger a 30% S&P 500 drop.

Three scenarios that could spook stocks in October, according to a Wall Street veteran

Tom Essaye, founder of Sevens Report Research, warns that the stock market could face a “horror-movie scenario” if three key risks hit at once — an AI bubble burst, worsening consumer strain, and a weakening labor market. He points to OpenAI’s $500 billion valuation and stretched tech prices as signs of speculative excess. Meanwhile, rising delinquencies at companies like CarMax show lower-income consumers are increasingly pressured.

Essaye cautions that while the economy still looks stable on the surface, markets are ignoring the potential for rising unemployment and slowing growth. If AI optimism fades and consumer spending weakens, the S&P 500 could fall 20–30%, mirroring the drawn-out collapse of the early 2000s tech bubble.

Also, click here to view the full article published in MarketWatch on October 7th, 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.

October MMT Chart and a Caution Signal From the VIX

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What’s in Today’s Report:

  • October MMT Levels – S&P 500 Chart
  • Technical Observation: VIX vs. SPX Caution Signal

Futures turned higher with Treasuries overnight after the Bank of New Zealand cut policy rates by -50 bp to 2.50% vs. (E) -25 bp, a dovish surprise aimed at spurring growth.

Economically, Taiwan’s CPI remained low at 1.25% y/y while German Industrial Production plunged -4.3% vs. (E) -1.0% but the downbeat data is bolstering dovish central bank policy bets and buoying both bond and equity markets this morning.

Looking ahead to today’s session, the void of government economic data continues and there are no notable private sector releases today which will leave markets continuing to focus on Treasury auctions and Fed speak.

Regarding the first of those two topics, the Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a (more important) 10-Yr Note auction at 1:00 p.m. ET.

Regarding the second topic, the Fed’s Musalem (9:20 a.m. ET), Barr (9:30 a.m. & 5:45 p.m. ET), Kashkari (3:15 p.m. & 4:30 p.m. ET), and Goolsbee (7:15 p.m. ET) are all scheduled to speak today.

And finally, the September FOMC meeting minutes will be released at 2:00 p.m. ET, and any evidence that pushes back on the thesis that the Fed will cut two more times in 2025 could send the dollar and yields (potentially sharply) higher and weigh meaningfully on equities.

 

It’s Not Too Late to Send Clients a Quarterly Letter!

Our Q3 ’25 Quarterly Letter was delivered to subscribers last week, complete with compliance backup and citations.

We continue to get feedback about how it is saving advisors time and helping them communicate with their clients in this volatile environment!

You can view our Q2 ’25 Quarterly Letter here. To learn more about the product (including price), please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

October Market Multiple Table

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What’s in Today’s Report:

  • October Market Multiple Table Update

Stock futures are trading back to flat after overnight weakness amid mostly quiet news flow.

Economically, German Manufacturing Orders fell -0.8% vs. (E) +1.3% in August but the news is being digested as modestly dovish (market positive) rather than a fresh source of growth concern.

Today, data on International Trade in Goods (E: $-61.0B) and Consumer Credit (E: $13.5B) were due to be released but both are likely to be impacted/delayed due to the government shutdown which will leave focus on Fed speak and Treasury auction results.

On those fronts, it is a relatively busy day with Bostic (10:00 a.m. ET), Bowman (10:05 a.m. ET), Miran (10:30 a.m.), and Kashkari (11:30 a.m. ET) all due to speak over the course of the day before there is a 3-Yr Treasury Note auction at 1:00 p.m. ET. Investors are pricing in a dovish Fed between now and yearend so anything that doesn’t support that outlook could prompt volatility.

Finally, there is one late season earnings release worth noting: MKC ($0.81).

 

AI Rally Fades as OpenAI’s $500B Valuation Fuels Bubble Concerns – Tom Essaye

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Sevens Report president says stagflation or fading AI enthusiasm are key risks

Open AI’s Valuation: Sign of AI Confidence or Froth?

The tech sector—especially semiconductors and anything AI-related—caught a solid morning bid yesterday following reports that OpenAI’s latest secondary stock sale valued the company near $500 billion. The $10 billion employee share sale sparked fresh enthusiasm across the AI complex, fueling a wave of early risk-on momentum in big-tech names.

However, the initial surge quickly faded. Key AI leaders like NVDA gave back early gains, and while the SOX (semiconductor index) still finished higher, it closed below its open—suggesting growing reluctance among investors to chase AI stocks at historically rich valuations.

The takeaway: While the OpenAI valuation reinforced confidence in the long-term AI narrative, it also underscores how frothy sentiment has become. If investor expectations begin to recalibrate or AI momentum stalls, the risk of a meaningful profit-taking pullback in tech—and potentially the broader market—is rising.

Also, click here to view the full article featured on Barron’s published on October 3rd, 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.

Sevens Report: OpenAI’s $500B Valuation Rekindles AI Bubble Debate

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Employee confidence strong, but lofty revenue multiples raise caution

Is OpenAI’s stock sale the latest evidence we’re in an AI bubble?

The Sevens Report said Friday that OpenAI’s latest secondary stock sale, which valued the company at around $500 billion, has reignited debate over whether surging enthusiasm for artificial intelligence reflects confidence or a brewing bubble.

The sale allowed employees to offload up to $10 billion in equity, though only $6.6 billion was ultimately offered — a sign that insiders remain confident in OpenAI’s growth trajectory. Sevens noted that the transaction was a liquidity event, not new fundraising, underscoring strong investor appetite after OpenAI’s first-half 2025 revenue already surpassed full-year 2024 totals.

Still, the valuation implies 25 times expected 2025 revenue of $20 billion, which the firm said demands rapid monetization to justify. “Leadership will have to prove the ability to translate growth into profitability sooner rather than later,” analysts cautioned.

Sevens also warned that fading intraday strength in AI-linked names like Nvidia shows rising risk that the AI narrative could be challenged, potentially triggering profit-taking across tech and the broader equity market.

Also, click here to view the full investing.com article featured on Yahoo Finance published on October 3rd, 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.

Acknowledging the Negative Outcome

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What’s in Today’s Report:

  • Acknowledging the Negative Outcome
  • Weekly Market Preview: Does Fed Commentary Back-up Rate Cut Expectations?
  • Weekly Economic Cheat Sheet: Fed speak the key with no government data this week.

Futures are solidly higher thanks to strength in Japanese stocks following a surprise election outcome and despite no progress on resolving the U.S. government shutdown.

The Nikkei surged more than 4% after the ruling Liberal Democratic Party elected Sanae Takaichi to be the new Prime Minister, a mildly surprising outcome that’s seen as positive for more economic stimulus from the BOJ.

Politically, there was no progress on resolving the U.S. government shutdown over the weekend, although markets are continuing to ignore the shutdown (and likely will for another two weeks or so, should it last that long).

Today there are no economic reports so focus will remain on any progress on resolving the shutdown.  There is also one Fed speaker today, Schmidt at 5:00 P.M. ET, but his comments come after the close and shouldn’t move markets.

10-Year Treasury Yield Dips to 4.1% After ADP Miss

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Soft jobs data reignited slowdown concerns, keeping the 10-year yield locked in its 2025 trading range.

TNX: My Technical Take on 10-Year Treasury Yields

Treasury yields eased moderately following this week’s weaker-than-expected ADP jobs report. The 10-year Treasury Note yield (^TNX) slipped five basis points to 4.1% on Wednesday, extending its pattern of tight range trading that has persisted through most of 2025. Tom Essaye, president of Sevens Report, noted that the 10-year yield remains technically neutral until a new extreme is reached. He added that the decline was driven more by growth and inflation expectations than Fed policy, as the benchmark yield tends to track economic momentum rather than short-term rate decisions. If the upcoming government jobs report echoes ADP’s weakness, Essaye cautioned that renewed slowdown fears could push investors back toward the safety of long-dated Treasuries—“just as they always do, despite fiscal concerns.”

Also, click here to view the full article on Moneyshow.com published on October 3rd, 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.