What Makes The Pullback Worse?

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What Makes The Pullback Worse? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Makes The Pullback Worse?
  • Weekly Market Preview:  Will Earnings and Growth Data Stabilize Stocks?
  • Weekly Economic Cheat Sheet:  Growth focus early in the week, important inflation report on Friday.

Futures are enjoying a modest rebound following a quiet weekend of news and ahead of an important week of earnings (especially in tech).

There are major tech earnings this week (TSLA, META, GOOG, MSFT) and tech stocks are bouncing this morning ahead of those reports.

There was no notable economic or geo-political news over the weekend.

This is a potentially busy week of economic data and earnings but it starts slowly, as today there’s only one economic report,  Chicago Fed National Activity Index (E: 0.05), and that’s unlikely to move markets.

On earnings, the importance of the results increases this week.  Results we’re watching today include:  VZ ($1.12), TFC ($0.78), NUE ($3.62).

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What Has Really Changed In This Market?

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What Has Really Changed In This Market? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Thoughts on the Israeli Strike in Iran
  • What Has Really Changed In This Market?
  • Oil Market:  Technicals vs. Fundamentals

Futures are moderately lower as Israel conducted a limited strike in Iran while NFLX guidance disappointed.

Israel struck an Iranian military base in response to the weekends’ drone attack, but the operation was small and viewed as an effort to de-escalate the situation.

NFLX posted strong earnings but mixed guidance and the stock is down 6% pre-market.

Today there are no economic reports and only one Fed speaker, Goolsbee at 10:30 a.m. ET, and on the dovish side of the spectrum so barring a hawkish tone from him, he shouldn’t move markets.

On the earnings front, results early in the season have been a bit disappointing and focus on earnings will increase (especially next week).  This market needs better results to help stabilize.  Earnings we’re watching today include:  AXP ($2.97), PG ($1.42) and SLB ($0.74).

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Did Powell Really Get More Hawkish on Tuesday?

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Did Powell Really Get More Hawkish on Tuesday? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Did Powell Really Get More Hawkish on Tuesday?
  • EIA Update and Oil Market Analysis

Futures are slightly higher on better-than-expected earnings and following a generally quiet night of news.

Taiwan Semi-Conductor (TSMC) posted solid earnings and that’s helping to offset yesterday’s disappointing ASML report and giving tech stocks (and global stocks) a mild boost.

Looking forward, today is a busy day of data, Fed speak and earnings.

Starting with the economic data, the market needs Goldilocks reports to help stocks and bonds stabilize, which means readings at or below expectations, especially on the price indices in the Philly Fed survey.  Key reports today include:  Jobless Claims (E: 215K), Philly Fed (E: 0.0) and Existing Home Sales (E: 4.18 M).

Turning to the Fed, there are three speakers today:  Bowman (9:05 a.m. ET), Williams (9:15 a.m. ET) and Bostic (11:00 a.m. ET).  Williams is the most important of the three, but if the commentary reinforces there are no near-term rate cuts coming, that will be an incremental headwind on stocks and bonds.

Finally, on the earnings front, the calendar continues to heat up and key reports today include:  TSMC ($1.29), NFLX ($4.51), PPG ($1.86), WAL ($1.70).

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The political hope is meeting a financial reality, Tyler Richey told ABC News.

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The political hope is meeting a financial reality: Sevens Report Analyst, Tyler Richey, Quoted in ABC News

Why is Trump’s Truth Social stock plummeting?

“The political hope is meeting a financial reality,” Tyler Richey, an analyst at Sevens Report Research, told ABC News.

“The valuation is just astronomical,” Richey said. “So it’s coming back to Earth.”

Supporters of Trump could seek to reverse the company’s declining stock price, Richey said.

“You may have some die-hard supporters come in and support the stock,” Richey said, noting that such a move could elicit a response from skeptics of Trump or the company.

“In this political environment, there’s just as many people that would bet against the stock as would be for it,” Richey said.

Also, click here to view the full ABC News article published on April 16th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Fed Expectations has hopes for a June rate cut dashed by the hot CPI report

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Fed Expectations has hopes for a June rate cut dashed by the hot CPI report: Tom Essaye Quoted in Blockworks

Cryptos slip as Powell doubles-down on delaying rate cuts

“Fed Expectations has hopes for a June rate cut dashed by the hot CPI report and now the market must deal with the possibility of just two — or even fewer — rate cuts in 2024,” Tom Essaye, founder of Sevens Report Research, said. “Remember the market started the year expecting seven cuts.”

Also, click here to view the full Blockwork article published on April 16th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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“Intraday market movement matters,” Tom Essaye says.

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“Intraday market movement matters”: Tom Essaye Quoted in Barron’s

The S&P 500 Keeps Starting Strong But Finishing Down

“That’s not what you want to see because what it tells you is you have a bunch of people who own stocks who are looking for an excuse to sell them,” Sevens Report Research’s Tom Essaye told Barron’s. “And the higher price gives them that excuse early.”

We’re only halfway through the month, so there are plenty of opportunities to top that figure. The most it’s happened in a month going back to 2008 was in December 2012, when it occurred 8 different times.

“Intraday market movement matters,” Essaye says. “The ideal scenario is you open lower and you climb out of the hole. We’re doing the opposite here. … It does speak to further technical weakness, and that’s why I believe we aren’t done yet. We probably need to go a bit lower.”

Also, click here to view the full Barron’s article published on April 16th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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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Over the past two weeks, we’ve seen deterioration on multiple fronts

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Over the past two weeks, we’ve seen deterioration on multiple fronts: Tom Essaye Quoted in Barron’s

Nasdaq Off Lows as Bond Yields Pull Back

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that markets had a rosy outlook two weeks ago as traders bet on solid growth, stable yields, and hopes of near-term rate cuts.

“Over the past two weeks, we’ve seen deterioration on multiple fronts,” Essaye says. “Yields are now much higher, the Fed is not going to cut nearly as much as expected, and geopolitical risks are now bubbling up again.”

Essaye believes higher yields and worries that the Federal Reserve will turn to fewer rate cuts than expected has been the biggest problem for markets.

“The market was extremely aggressive on valuation, and central to that valuation is the idea of Fed rate cuts and lowered yields,” Essaye says. “Because that has been removed, the valuation for markets must come down. And that’s exactly what’s happening.”

Also, click here to view the full Barron’s article published on April 16th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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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Tensions remain elevated between Israel and Hamas

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Tensions remain elevated between Israel and Hamas: Sevens Report Analysts, Quoted in MarketWatch

Oil prices finish higher on talk of potential for Iran strike on Israel

“Bottom line, tensions remain elevated between Israel and Hamas and while ceasefire talks are as close as they have been yet, there remain risks of further escalation and a contagion effect in the region, particularly with Iran who recently threatened to close the Strait of Hormuz, which sees about 1/5th of the world’s seaborne oil trade flow through it,” said analysts in Sevens Report Research’s Wednesday newsletter.

Also, click here to view the full MarketWatch article published on April 10th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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The surging Vix briefly pushed the value of front-month Vix futures contracts

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The surging Vix briefly pushed the value of front-month Vix futures contracts: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Iran-Israel fears sink stocks as traders rush to gold, Treasury bonds

The surging Vix briefly pushed the value of front-month Vix futures contracts expiring later this month above that of contracts expiring in May, causing the Vix futures curve to become inverted for the first time since February, according to Tyler Richey, co-editor of Sevens Report Research.

An inverted Vix futures curve is a sign that traders are bracing for stocks to continue sliding in the weeks ahead, Richey said.

Also, click here to view the full MarketWatch article published on April 12th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Sevens Report founder Tom Essaye explains the gold rally

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Investors piled into a new refuge as the U.S. dollar lost value and interest rate expectations dwindled: Tom Essaye Quoted in Forbes

What’s Up With Gold? Here’s Why Everyone From Costco To Central Banks Is Rushing In.

Sevens Report founder Tom Essaye explains the rally initially began late last year, as investors piled into a new refuge as the U.S. dollar lost value and interest rate expectations dwindled before getting a further bump from renewed concerns in 2024 about the potential for lingering inflation. And despite the Costco mania, it’s actually institutional investors and central banks, especially those coming from China, driving much of the surging demand for gold, as investors and bankers from China and other largely non-Western countries look to hedge against an economic downturn scenario while simultaneously lessening their dependence on the American dollar.

Also, click here to view the full Forbes article published on April 10th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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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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.