Sentiment Update (A Shocking Discovery)

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What’s in Today’s Report:

  • Sentiment Update (A Somewhat Shocking Discovery)
  • Empire State Manufacturing Survey Takeaways

U.S. stock futures are in the red this morning with tech leading to the downside after the U.S. announced new export restrictions on AI chip exports to China.

Economically, Chinese GDP missed (1.2% vs. E: 1.5% q/q) but Retail Sales beat (5.9% vs. E: 4.2%) while EU HICP (CPI equivalent) was inline with estimates at 2.2% y/y.

Looking ahead to today’s session, there are several important economic reports due to be released in the U.S. including: Retail Sales (E: 1.4%), Industrial Production (E: -0.2%), and the Housing Market Index (E: 38).

Additionally, there are two Fed officials scheduled to speak: Hammack (12:00 p.m. ET) and Schmid (7:00 p.m. ET) and the Treasury will hold a 20-Yr Bond auction at 1:00 p.m. ET.

Finally, earnings season continues with quarterly results due from ASML ($6.12), USB ($0.99), PGR ($4.72), CFG ($0.75), AA ($1.73), and CSX ($0.37) today.

What Happens If Markets Tire of Trade Headlines?

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What’s in Today’s Report:

  • What Happens If Markets Tire of Trade Headlines
  • NY Fed Inflation Expectations (Chart)

Futures are slightly higher on news that President Trump is considering a “tariff pause” for automobile imports which offset reports that China is halting U.S. aircraft imports.

Economically, the German ZEW Survey was mixed as Current Conditions were better than feared at -81.2 (E: -86.0), while Economic Sentiment badly missed at -14 (E: 10.0) which underscores the still broad sense of global economic uncertainty.

Today, focus will be on economic data early with the Empire State Manufacturing Index (-10.0) and Import & Export Prices data (E: 0.0% m/m, 0.1% m/m) due to be released before the bell.

Additionally, there is one Fed speaker to watch mid-day: Barkin (11:35 a.m. ET) and earnings season continues with several important companies reporting quarterly results including BAC ($0.81), C ($1.84), JNJ ($2.57), and UAL ($0.80).

Three Important Takeaways from Last Week

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What’s in Today’s Report:

  • Three Important Takeaways from Last Week
  • Weekly Market Preview:  Can Trade War De-escalation Continue?
  • Weekly Economic Cheat Sheet:  Is Growth Still Solid? (First April Readings This Week)

Futures are sharply higher on further de-escalation of the global trade war over the weekend.

The Trump Administration exempted most electronics from Chinese and reciprocal tariffs, reducing the tariff headwind on the economy and further de-escalating the trade war.

This week has several important economic reports looming but today the calendar is quiet.

So, focus will stay on trade headlines while we also get several Fed speakers including Barkin (12:00 p.m. ET), Waller (1:00 p.m. ET), Harker (6:00 p.m. ET) and Bostic (7:40 p.m. ET).

Finally, earnings season continues to heat up and reports we’re watching today include GS ($12.71) and MTB ($3.41).

The Biggest Takeaway from Trump’s Tariff Reversal

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What’s in Today’s Report:

  • The Biggest Takeaway from Trump’s Tariff Reversal
  • Why Are the Dollar and Treasuries Falling? (Not Good)
  • Monthly Bitcoin Update

Futures are modestly higher as markets bounce from Thursday’s declines, despite further trade war escalation.

China increased tariffs on U.S. goods to 125%, further escalating the global trade war, although markets, for now, are digesting the move.

Today focus will remain on economic data via PPI (E: 0.02% m/m, 3.4% y/y) and Consumer Sentiment (E: 55.0).  Like Thursday, better than expected numbers won’t help stocks in the near term (they are totally dominated by trade and global macro trends right now) but it will push back on stagflation fears (which is an underlying positive).

Looking at the Fed, there are several speakers again today, including Collins (9:00 a.m. ET), Musalem (10:00 a.m. ET) and Williams (11:00 a.m. ET), although they shouldn’t move markets.

Finally, earnings season begins in earnest and important reports today include:  JPM ($4.62), BLK ($10.43), WFC ($1.23), and MS ($2.23).

Sevens Report founder and president Tom Essaye joins Yahoo Finance to discuss recent events

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Why short sellers are ‘very nervous’ as markets stay volatile: Tom Essaye Interviewed on Yahoo Finance

Why short sellers are ‘very nervous’ as markets stay volatile

The Sevens Report founder and president Tom Essaye joins Catalysts to discuss how recent events are shifting market sentiment, his current bullish stance on bonds, and the outlook for both stocks and bonds amid ongoing volatility.

Tom Essaye Interview - Yahoo Finance

Also, click here to view the full interview featured on Yahoo Finance, published on April 10th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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MMT Chart: A Rare Oversold Condition

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What’s in Today’s Report:

  • Market Multiple Table Chart:  A Rare Oversold Condition

Futures are moderately lower (down around 1%) as investors take profits following Wednesday’s massive rally.

There was no new tariff or trade news overnight and investors digested the good news/bad news of no punitive global reciprocal tariffs (positive) but still-in-place 125% tariffs on China and 10% tariffs on most U.S. imports (negative).

Today focus will turn back towards economic data and the two key reports are CPI (E: 0.1% m/m, 2.6% y/y) and Jobless Claims (E: 225K).  A weaker than expected CPI and lower than expected jobless claims will push back against stagflation concerns and help stocks potentially extend yesterday’s rebound.

Turning to the Fed, there are multiple speakers today but they are unlikely to move markets (the Fed is in “wait and see” mode like the rest of us).  Speakers today include:  Barkin (8:30 a.m. ET), Logan (9:30 a.m. ET), Schmid & Bowman (10:00 a.m. ET), Goolsbee & Harker (12:00 p.m. ET).

April Market Multiple Table Update

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What’s in Today’s Report:

  • April Market Multiple Table Update
  • Chart – March Small Business Optimism Turns Sharply Lower

Futures are recovering from overnight losses as investors await China’s reaction to the latest wave of tariffs that went into effect overnight amid otherwise quiet news flow.

Economically, there were no market-moving reports overnight, however the Reserve Bank of New Zealand did cut their policy rate by 25 bp (3.75%), meeting expectations.

There are no notable economic reports today which will leave investors largely focused on trade war developments and tariff headlines today.

Outside of tariff news, traders will be watching a 10-Yr Treasury Note auction at 1:00 p.m. ET as well as the March FOMC meeting minutes which will be release at 2:00 p.m. ET.

Finally, there is one Fed officials scheduled to speak: Barkin (12:30 p.m. ET). Any less discouraging commentary will be welcomed by markets today.

What Makes It Better & What Makes It Worse

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What’s in Today’s Report:

  • What Makes It Better & What Makes It Worse

U.S. equity futures are stabilizing and market volatility is easing modestly thanks to some positive tariff news overnight.

On the trade war front, optimism about tariff negotiations between the U.S. and Japan sent the Nikkei higher by 6%+ while Chinese shares rallied after the PBOC pledged stimulus efforts to shore up financial markets amid recent volatility.

Economically, the NFIB Small Business Optimism Index fell to a new post-election low of 97.4 vs. (E) 98.9 in March, the latest report to highlight deteriorating business confidence (dovish for Fed policy outlook).

There are no notable economic reports today however the Treasury will hold a 3-Yr Note auction at 1:00 p.m. ET. A strong auction will reiterate last week’s dovish shift in Fed policy outlook amid growing economic uncertainty and add to prospects that a sustainable relief rally is taking shape.

Finally, there is one Fed official scheduled to speak today: Daly (2:00 p.m. ET) and investors will be looking for more encouraging commentary about the outlook for the economy (but without taking a hawkish tone).

 

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

Market volatility has surged in the wake of tariffs and clients are nervous.  If you are behind, please let us help! Our Q1 ’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!

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Bull vs. Bear: Which Argument Makes More Sense?

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What’s in Today’s Report:

  • Bull vs. Bear:  Which Argument Makes More Sense?
  • Weekly Market Preview:  Will There Be Any Tariff Relief?
  • Weekly Economic Cheat Sheet:  Focus Turns to Inflation (CPI on Thursday)

Futures are sharply lower again (down close to 2%) as there was no meaningful tariff relief over the weekend while administration officials reiterated their support for the current tariff policy.

Trump, Bessent and Lutnick all downplayed the market declines and doubled down on the current tariff policy.

On tariff relief, Vietnam, Japan, the UK and others expressed a desire to negotiate tariffs lower, but nothing concrete occurred.

Today focus will remain on tariff headlines and any headlines that imply tariff relief could cause a sharp rebound, given the intensity of the recent declines.  There is one Fed speaker today, Kugler (10:30 a.m. ET), but she shouldn’t move markets.

This could spark a selloff in oil

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This could spark a selloff in oil: Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch

U.S. oil supplies rise sharply, and trade-war ‘angst’ may be to blame for a drop in demand

“If that drop in demand is being fueled by tariff worries and trade-war angst … then that marks the start of what could be a crippling trend of declining demand that would, barring supply-side surprises, spark a selloff in oil,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. 

Also, click here to view the full article featured on MarketWatch.com published on April 4th, 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.