A Gutsy Contrarian Call

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Today’s Report is attached as a PDF.

What’s in Today’s Report:

  • A Gutsy Contrarian Call

It is a mixed start to Q4 today as U.S. stock futures are modestly higher, Asian shares rallied overnight following a rate cut by the RBA (although Chinese markets are notably closed for a holiday), while European markets declined on soft economic data.

September Manufacturing PMI data remained decidedly weak in Europe with Germany’s headline index notably falling from 43.5 to 41.7, the lowest since June 2009. Inflation in the Eurozone meanwhile remains weak with the core HICP figure meeting estimates at 1.0% year-over-year.

Looking into today’s session, there are three economic reports to watch this morning: PMI Manufacturing Index (E: 51.0), ISM Manufacturing Index (E: 50.0), and Construction Spending (E: 0.3%) and a busy schedule of Fed speakers: Clarida (8:50 a.m. ET), Bullard (9:15 a.m. ET), and Bowman (9:30 a.m. ET).

Beyond those potential catalysts in the morning, markets will remain focused on the political drama surrounding the impeachment proceedings by the House against Trump as well as any further updates on the U.S.-China trade war as the latter continues to be the single most important influence on global markets right now.

Tyler Richey Quoted in MarketWatch on September 30, 2019

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“Those comments about Saudi oil production and capacity by Al-Buainain were certainly a bearish catalyst for today’s price weakness. Speculation that production would be back online much quicker than initially thought was the main driver of…” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Oil Rig

Tom Essaye Quoted in Yahoo Finance on September 27, 2019

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“The fact that the repos are still ongoing is a bit troubling for me. It makes me think that the Fed somehow or other has misjudged the liquidity needs…” Tom Essaye, who publishes investment newsletter The Sevens Report, told Yahoo Finance’s The First Trade. Click here to read the full article.

Tom Essaye Quoted in Barron’s on September 27, 2019

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“U.S./China trade talks are officially scheduled for October 10 and 11th and rhetoric from both sides remains positive ahead of the event. “At this point, a pretty comprehensive…” writes The Sevens Report’s Tom Essaye. Click here to read the full article.

Tom Essaye Interviewed with Yahoo Finance on September 27, 2019

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“I think I would stay away from it [Peloton] for now, that’s for sure. That was not a successful deal for anyone other working at Peloton in the beginning,” said Sevens Report Research founder Tom Essaye on Yahoo Finance’s The First Trade.

Essaye added, “I think part of the failure of some of these high-flying IPOs is making me a little nervous. I don’t have any hard or fast…” Click here to watch the full video.

Repo Market Update (Not Fixed Yet)

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What’s in Today’s Report:

  • Repo Market Update (Not Fixed Yet)

Futures are modestly higher on more U.S./China optimism following a quiet night of actual news.

U.S./China trade talks are officially scheduled for October 10th and 11th and rhetoric from both sides remains positive ahead of the event.  At this point, a pretty comprehensive U.S./China trade truce is fully expected by the market.

Economically, EU Economic Sentiment and Chinese Industrial Profits both slightly missed estimates although neither number is moving markets.

Today there are two notable economic reports, Durable Goods (E: -1.2%) and Core PCE Price Index (E: 0.2% m/m, 1.8% y/y) and we need to see a “Goldilocks” result of solid Durable Goods (to ease fears about business spending and investment) and tame inflation (Core PCE Price Index is the Fed preferred measure of inflation and it needs to print sub 2%).

There are also two Fed speakers today, Quarles (8:30 p.m. ET) and Harker (12:00 p.m. ET), but neither should move markets.

Tom Essaye Interviewed with WPTV Channel 5 on September 25, 2019

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Economic expert Tom Essaye with Sevens Report Research said this type of ‘voluntourism’ might be what it takes to make a difference in the Bahamas.

“Anything we can do now to help get them started is important,” he said. “We’ve got to break the idea that, ‘Hey I’m just not going to the Bahamas for a year or two.’ Because if everyone says that, it’s just going to make things worse…” Click here to watch the full interview.

Tom Essaye

Tom Essaye Quoted in Barron’s on September 26, 2019

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In fact, the market seems to be worrying more about China and the state of the U.S. economy than impeachment, according to Sevens Report’s Tom Essaye. U.S./China trade remains the singular most important issue facing this market, and as long as markets have ‘hope’ of a U.S./China trade ‘truce,’ it’ll be hard to…” he writes.

Trump

Tyler Richey Interviewed with Mid-day Movers with TD Ameritrade on September 25, 2019

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Tyler Richey interviewed with Mid-Day Movers from TD Ameritrade discussing Nike, Foot Locker, Under Armour earnings, markets, and more…Click here to watch the full video.

Tyler Richey Interview

Tyler Richey Quoted in MarketWatch on September 25, 2019

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U.S. supplies rose more than expected last week, though was “largely offset by the less-bearish to mildly bullish inventory statistics for the refined products…” said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full report.

Oil Tanks