Tom Essaye Quoted in Barron’s on October 2, 2020
For now, though, all eyes are on Washington. “For the next several days reports of President Trump’s health will…” writes The Sevens Report’s Tom Essaye. Click here to read the full article.
Tom Essaye Quoted in Yahoo Finance on September 30, 2020
“Futures are lower amid rising concerns that the outcome of the presidential election may be contested following…” remarked Sevens Report Research founder Tom Essaye in an early morning note to clients. Click here to read the full article.
What Trump’s COVID-19 Diagnosis Means for Markets
What’s in Today’s Report:
- What the Trump COVID-19 Diagnosis Means for Markets
Futures are sharply lower following the Trump COVID-19 diagnosis.
President Trump and the First Lady tested positive for COVID-19 on Thursday, and have begin their quarantine process. However, the White House has said it expects the President to continue in his duties as he recovers.
There was minimal economic data overnight.
For the next several days reports of President Trump’s health will drive markets, and obviously if he becomes very sick that will hit stocks in the short term.
Beyond the COVID diagnosis, we still have the jobs report today, and estimates are as follows: Job adds: 894K, UE Rate: 8.2%.
Finally, we also get Consumer Sentiment (E: 79.0) and have two Fed speakers, Harker (9:00 a.m. ET) and Kashkari (1:00 p.m. ET), but none of that should move markets.
Jobs Report Preview
What’s in Today’s Report:
- Jobs Report Preview
- EIA Takeaways and Oil Data
Futures are moderately higher on more stimulus hopes combined with solid economic data.
Positive chatter regarding a potential stimulus deal continued overnight with whispers implying the deal may be worth more than $1.5T. But, I want to again caution that many hurdles remain to get a deal done by the election (most important of all being if it can pass the Senate, and that remains unclear).
Economic data was solid overnight as Final Sept. EU manufacturing PMIs met expectations at 53.7.
Stimulus headlines will drive trading today and there’s an outside chance we get an announcement of a deal between Treasury Secretary Mnuchin and Speaker Pelosi. But, while the market will embrace that, as mentioned, it remains to be seen if the Senate will pass something prior to the election.
Outside of stimulus, we get two important reports on growth (Jobless Claims (E: 850K and ISM Manufacturing PMI (E: 56.3)) and one on inflation (Core PCE Price Index (1.4%)) and the market will want to see solid numbers across the board to imply the economic recovery is not plateauing. Finally, there are two Fed speakers today, Williams (11:00 a.m. ET) and Bowman (3:00 p.m. ET), but neither should move markets.
Tom Essaye Interviewed with Yahoo Finance on September 29, 2020
Tom Essaye, Sevens Report Research Founder, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss what’s moving the markets on Monday morning. Click here to watch the full interview.
Election Preview Part II
What’s in Today’s Report:
- Stimulus Update
- Election Preview Part II (What’s the Probability of a Contested Election?)
Futures are lower amid rising concerns that the outcome of the presidential election may be contested following last night’s debate while there has been little to no progress on fiscal stimulus (at home or abroad) in the face of quickly rising new COVID-19 cases.
Economically, China’s official Manufacturing PMI rose to 51.5 vs. (E) 51.2 in September thanks to strong export orders which helped ease concerns about the health of the global economic recovery.
Looking to today’s calendar, we will receive our first look at September labor market data via the ADP Employment Report (E: 650K) as well as Final Q2 GDP (E: -31.7%), both ahead of the open while the Pending Home Sales report (E: 3.1%) will be released shortly after the bell.
Additionally, there are three Fed speakers today: Kashkari (9:30 a.m. ET), Bowman (1:40 p.m. ET), and Kaplan (6:00 p.m. ET) and the market expects all of them to maintain a very dovish tone.
Bottom line, investors will remain focused on two main factors today: 1) Will speaker Pelosi and Treasury Secretary Mnuchin pull off a last minute stimulus deal before the election (not expected)? And 2) what are the chances the presidential election is contested (the higher the chances the more negative for markets)?
Tom Essaye Quoted in Fintech Zoom on September 24, 2020
“By giving the market a lot lodging … the Fed has primarily created a spoiled youngster the place nothing’s sufficient…” Tom Essaye, founder and president of Sevens Analysis, tells Axios. Click here to read the full article.
Election Preview
What’s in Today’s Report:
- Thoughts on the Friday/Monday Rally
- Election Preview
Stock futures are flat following a mostly quiet night of news as traders begin to look ahead to tonight’s debate between President Trump and former VP Biden.
The only economic release o/n was Eurozone Economic Sentiment which beat on the headline (91.1 vs. E: 89.5) but had soft details which is weighing modestly on EU shares.
House Democrats presented a $2.2T relief bill late yesterday but realistically it will not be passed before election day, and therefore is not having a significant impact on markets this morning.
Today, there are two economic reports, the latter of which will be more important to watch: Case-Shiller House Price Index (E: -0.1%) and Consumer Confidence (E: 88.8) while there is just one Fed official scheduled to speak (twice): Williams (9:15 a.m. & 1:00 p.m. ET).
With the debate looming tonight, the focus will be on politics and the latest attempt at a stimulus bill by Congress. And barring any unexpected progress on getting a stimulus deal done in the very near term, markets are lining up to have a relatively quiet session today.
Has the Market Reached “Fair” Value Yet?
What’s in Today’s Report:
- Pullback Update: Have We Reached “Fair Value” Yet?
- Weekly Economic Cheat Sheet: Jobs Friday, PMI’s Thursday (It’s an Important Week)
- Weekly Market Preview: Coronavirus and stimulus hopes are the near term divers of stocks.
Futures are sharply higher thanks mostly to momentum from Friday’s rally, although there were incrementally positive headlines on stimulus and coronavirus over the weekend that are also helping stocks rally this morning
Speaker Pelosi made optimistic comments on a pre-election stimulus deal, but nothing specific was mentioned.
On the coronavirus front, cases keep rising, but news that Florida was fully reopening and European countries were planning more surgical shutdowns both helped sentiment.
Today there are no notable economic reports and no Fed speakers, so markets will be focused on whether the S&P 500 can hold Friday and this mornings’ gains. From an influence standpoint, in the near term coronavirus cases and stimulus hopes are driving markets, and any incrementally negative headlines on either topic will risk seeing Friday’s gains given back.
How Much Further Can the Correction Go?
What’s in Today’s Report:
- How Much Further Can the Correction Go?
- Oil Update and EIA Analysis
- Flash PMIs: More Signs of a Plateau in the Recovery?
Futures are little changed as markets digest Wednesday’s selloff following a quiet night of news.
Economic data was mixed as German Ifo Business Expectations slightly missed estimates (97.7 vs. (E) 98) while British Distributive Trades (retail sales) beat (10% vs. (E) -11%).
Today the key report will be weekly Jobless Claims, which are forecast to move up to 880K. If weekly claims are worse than expectations, concerns will grow that the economic recovery is indeed plateauing (and remember we’re almost certainly not getting stimulus until late November/early December, at the earliest). We also get the latest look at New Home Sales (E: 875K).
Finally, there is a veritable parade of Fed speakers today: Kaplan (8:50 a.m. ET), Bullard (12:00 p.m. ET), Barkin (1:00 p.m. ET), Evans (1:00 p.m. ET), Williams (2:00 p.m. ET), Bostic (2:00 p.m. ET), Powell (10:00 a.m. ET). Of those speaking, Powell is clearly the most important, but we don’t expect him to say anything new (and as such the market should ignore pretty much all of it).