New S&P 500 High Built on Confidence Not Complacency | Sevens Report Cautions What’s Next

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Markets rise on policy optimism, but slowing growth could still derail momentum

New S&P 500 high raises questions on longevity – Sevens Report

The S&P 500 has surged back to its February highs, but according to Sevens Report Research, that strength may be on shakier ground than it appears.

The rally is being driven in part by confidence that the Trump administration won’t materially damage the economy, despite aggressive rhetoric and growing tariff pressures.

“That belief is the foundation upon which the Q2 rebound was built,”
— Sevens Report

Another factor supporting the market: stagflation fears are fading, as falling housing and energy prices help offset inflation from tariffs. Meanwhile, strong economic indicators—like June’s flash PMIs beating expectations—have added to the positive sentiment.

The report also noted that while valuations appear stretched based on 2025 earnings, 2026 estimates suggest a more reasonable 20.8× forward P/E for the S&P 500.

“Analysts are quickly pivoting to using 2026 earnings estimates of $290–$300/share.”

Tech stocks, particularly AI-driven names, remain central to the rally, but Sevens Report warns that not all signals are bullish.

“There are growing signs that the labor market is losing momentum… and this market is making no allowances for a growth scare.”

Mixed jobless claims and the potential for weak PMI data in the week ahead could quickly shift the narrative. With a shortened holiday week ahead, the resilience of this rally may soon be tested.

Also, click here to view the full article featured on Investing.com published on June 30th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Is This Rally Sustainable?

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What’s in Today’s Report:

  • Is This Rally Sustainable? It Depends on What You Think About Growth.
  • Chart – The Latest Chicago PMI Points to a Loss of Economic Momentum

Futures are lower, led by TSLA shares and big tech after the latest social-media rift between President Trump and Elon Musk offsets mostly upbeat economic data from overnight while the strong Q2’25 gains are digested.

Economically, China’s Caixin Manufacturing PMI rose from 48.3 to 50.4 vs. (E) 49.0 in June while the EU’s final manufacturing PMI edged up from 49.4 to 49.5 vs. (E) 49.4. On the inflation front, the Eurozone HICP Flash (CPI equivalent) rose 0.1% to 2.0% as expected.

Looking into today’s session, there are three noteworthy economic reports to watch: The ISM Manufacturing PMI (E: 48.8), Construction Spending (E: 0.1%), and May JOLTS (E: 7.3 million). Investors will be looking for further evidence of resilience in growth metrics amid tame inflation pressures in order to short up rally-supporting soft landing hopes.

Finally, Fed Chair Powell will speak as part of a panel at an ECB Economic Forum in Portugal at 9:30 a.m. ET and any while he is unlikely to stray from the narrative that the FOMC is in “wait-and-see” mode, any insight on the future policy path could move markets today.

 

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Wall Street Braces for Fallout But Markets May Already Be Looking Past It

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Sevens Report’s Tom Essaye on Why the U.S. Strike on Iran Might Not Be a New Market Negative

Wall Street Braces for Market Fallout After the U.S. Bombed Iran

Following news that the United States launched a targeted military strike on Iran, global markets reacted with caution. Investors immediately began pricing in higher oil prices, potential stock market volatility, and a stronger U.S. dollar.

Yet not all analysts see the event as a reason to panic.

In comments to Opening Bell Daily, Sevens Report founder Tom Essaye shared why this development may not derail markets—so long as the situation doesn’t escalate further.

“In some ways, this removes a potential unknown from the markets because it was unclear whether the U.S. would strike or not,”
— Tom Essaye, Sevens Report

Essaye added that unless there’s retaliation or broader conflict, the market may now begin to stabilize. With the decision made and priced in, investor focus may shift back to fundamentals like earnings, Fed policy, and inflation.

Also, click here to view the full article featured on Inc.com, published on June 23rd, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Why Did the S&P 500 Hit A New High? (And Is It Sustainable?)

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What’s in Today’s Report:

  • Why Did the S&P 500 Hit A New High?  (And Is It Sustainable?)
  • Weekly Market Preview:  Does the Big, Beautiful Bill Pass and Further Support Growth?
  • Weekly Economic Cheat Sheet:  The Big Three Reports This Week:  Jobs Report (Thurs), ISM Manufacturing & Services PMIs

Futures are modestly higher on further progress on passing the “Big, Beautiful Bill” (which would extend and increase ta cuts, further supporting economic growth).

The “Big Beautiful Bill” passed a key procedural vote over the weekend and passage out of the Senate is expected later today (and it could be law by the end of the week).

Economically, the June Chinese manufacturing and service PMIs were slightly better than expected.

Today there is one economic report (Chicago PMI (E: 42.7)) and two Fed speakers, Bostic (10:00 a.m. ET) and Goolsbee (1:00 p.m. ET) but they shouldn’t move markets.  Instead, focus will remain on Washington and if passage of the Big, Beautiful Bill becomes even more likely (meaning it passes the Senate and there’s no major pushback from House members) that should further add to the upward momentum in the market.

The Rally Broadens Beyond Big Tech — Sevens Report Highlights the FOMO Trade

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Tom Essaye says improved breadth shows this market may still have plenty left in the tank

The Stock-Market Rally Is Moving Beyond Big Tech and Investors Are Thrilled

The stock market rally is no longer just a tech story. Recent gains in financial and industrial stocks have pushed one key measure of market breadth to a new high—signaling rising participation across sectors.

That’s a good sign, according to Tom Essaye, founder of Sevens Report Research, who believes the bull run may have room to run—as long as economic stability holds.

“As long as things can stay stable, then this market is not exhausted by any stretch of the imagination.”
— Tom Essaye, Sevens Report

Essaye attributes the surge in non-tech names to classic FOMO trading—as investors who missed out on AI and Big Tech now rotate into other sectors.

“Market breadth has improved as investors search for new opportunities in different industries… It’s the FOMO trade.”

Broader participation often strengthens the sustainability of a rally, making this shift in leadership a potentially bullish signal for the months ahead.

Also, click here to view the full article featured on The Wall Street Journal published on June 28th, 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.

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Tech Leads the Rally, But Breadth Signals Are Flashing | Sevens Report Weighs In

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Tom Essaye says the rally looks healthy—but it’s not without warning signs

Tech stocks are powering this record-setting rally on Wall Street – but how long can it last?

RECORD HIGHS GET SUPPORT FROM NYSE BREADTH, BUT 200-DAY INDICATORS TELL A DIFFERENT STORY

Wall Street’s rally to new highs continues to be led by tech stocks, but according to Tom Essaye, founder of Sevens Report Research, the strength may be broader than it looks—though not without its risks.

“The recent advance is broad-based… historically healthy and likely sustainable.”
— Tom Essaye, Sevens Report

Essaye pointed to new highs in the NYSE Advance/Decline (A/D) line, a key signal that the rally has expanded beyond just megacap names.

But there’s a catch: only about 50% of S&P 500 stocks are trading above their 200-day moving averages, according to Sevens Report data—well below May’s 55% high.

“The divergence… is a source of concern,” Essaye wrote. “Some areas show real strength, while others may just be staging bear-market rallies.”

For bulls, Essaye says confirmation would come from more S&P names clearing their 200-DMAs—surpassing the May threshold of 55% would help validate the rally’s staying power.

Also, click here to view the full article published in MarketWatch on June 28th, 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.

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Tom Essaye Says PCE Report Could Make or Break Rate Cut Hopes

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Markets need a tame report to keep the soft landing story alive: Tom Essaye Quoted in Morningstar

EMEA Morning Briefing: Investors Await Fed’s Preferred Inflation Gauge

Investors are closely watching the PCE inflation report, set for release today, as it remains the Federal Reserve’s preferred inflation metric.

According to Tom Essaye, founder of Sevens Report Research, the market is hoping for a quiet reading to preserve the case for two rate cuts later this year.

“Markets are counting on inflation to stay subdued to keep expectations for two rate cuts in 2025 intact.”
— Tom Essaye, Sevens Report

While recent CPI and PPI data have come in light, any surprise to the upside in today’s PCE could push Treasury yields higher and pressure equity markets, Essaye warned.

“If inflation surprises to the upside… that will push yields higher and pressure stocks.”

With stocks near all-time highs and rate cut optimism priced in, a hotter-than-expected inflation print could shift sentiment quickly.

Also, click here to view the full Dow Jones article published in Morningstar on June 27th, 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.

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Mixed Messages from Market Breadth

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What’s in Today’s Report:

  • Mixed Messages from Market Breadth

Futures are modestly higher mostly on momentum and continued optimism on trade/tariffs.

The U.S. and China officially signed the recently negotiated trade agreement and Commerce Secretary Lutnick teased 10 more trade deals that could be announced soon.

Economically, Euro Zone Economic Sentiment was slightly weaker than expected (94.5 vs. (E) 95.0).

Today focus will turn to inflation via the Core PCE Price Index (E: 0.1% m/m, 2.6% y/y).  Tame inflation readings have underwritten this slightly dovish shift in rate cut expectations, so this number needs to be in-line or weaker than expected to keep those more dovish expectations intact (and support this week’s rally).

In addition to the data, there are two Fed speakers, Williams (7:30 a.m. ET) and Hammack (9:15 a.m. ET) but they shouldn’t move markets.

 

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Investor Sentiment Remains Cautious — And That’s Bullish, Says Sevens Report

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Tom Essaye explains why wariness may be just what keeps the rally going

Investors Are Still Wary of the Stock Rally. Five Things That Could Prove Them Right.

Despite stocks pushing higher, investors haven’t gone all-in—and that’s a good thing, according to Tom Essaye, president of Sevens Report Research.

Citing multiple sentiment measures, Essaye noted that investor optimism is still muted compared to historical averages:

  • AAII Investor Sentiment Survey shows just 33.2% bullish, below its long-term average of 37.5%

  • Investors Intelligence Bulls/Bears spread stands at a cautious 10.2%

  • The CNN Fear & Greed Index sits at 60%, barely in “Greed” territory and trending lower in recent weeks

“It would be much more concerning if every reading were overwhelmingly bullish.”
— Tom Essaye, Sevens Report

Essaye says this balance is actually healthy—it prevents bubbles and leaves room for the market to rise further as sentiment gradually improves.

“Investor sentiment is much more balanced and neutral than the price action would imply.”

In his view, the continued skepticism could fuel further upside, so long as macro headwinds like tariffs, geopolitics, and economic growth don’t deteriorate.

Also, click here to view the full article featured on Barron’s published on June 26th, 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.

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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.

If inflation surprises to the upside then that will pressure yields and stocks

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Markets are counting on inflation to stay subdued: Sevens Report President, Tom Essaye Quoted in MarketWatch

What’s up with inflation? PCE likely to show a small rise in prices despite tariffs.

“Markets are counting on inflation to stay subdued to keep expectations for two rates cuts in 2025 intact,” wrote Tom Essaye of Sevens Report Research. “If inflation surprises to the upside — which is unlikely given CPI and PPI were light — then that will push yields higher and pressure stocks.”

Also, click here to view the full MarketWatch article, published on June 26th, 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.