Three Key Market Variables to Watch

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What’s in Today’s Report:

  • Three Key Market Variables to Watch
  • Thoughts on the Appellate Court Decision (Why It’s Not a Positive for Stocks)
  • Weekly Economic Preview: “The Big Three” Reports Are Due This Week

U.S. stock futures are tracking global equity markets lower this morning as bond yields rise and gold hit fresh record highs amid a fresh sense of macroeconomic uncertainty.

Economically, the EU’s Narrow Core HICP Flash (CPI equivalent) held steady at 2.3% vs. (E) 2.2% in August which was not a big “miss” but is continuing to keep inflation worries elevated.

Looking into today’s session, there are no Fed officials scheduled to speak but two economic reports to watch with the ISM Manufacturing PMI (E: 48.7) and Construction Spending (E: +0.1%) data both due to be released.

Additionally, the Treasury will hold 6-Week, 3-Month, 6-Month and 52-Week Bill auctions simultaneously at 11:30 a.m. ET. The wide range of Bill durations being auctions could shed fresh light on the market’s outlook for Fed policy between now and yearend as well as H1’26.

Finally, some late season earnings continue to be released with quarterly reports due from both ZS (-$0.02 and SIG ($1.21) today.

Bottom line, if economic data is “Goldilocks” and supports the case for a soft-landing and Treasury auctions go smoothly (healthy demand), pointing to a September Fed rate cut, equities could recover early losses as focus turns to labor market data due out later in the week. If not, we could see a volatile start to September today, but follow-through selling is unlikely ahead of the key jobs report Friday.

 

Tom Essaye: Rising ETH/BTC Ratio Could Signal Stock Market Volatility

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Tom Essaye: Rising ETH/BTC Ratio Could Signal Stock Market Volatility

Why the S&P 500 could be at risk of a 10% to 20% pullback if ether falls behind bitcoin again

History suggests that a resurgence by Bitcoin in which it underperforms Ethereum could be a warning sign that stock-market volatility is about to increase, with the S&P 500 potentially facing a decline of 10% to 20%, according to Tom Essaye, founder and president of Sevens Report Research.

Since early July, Ether has outpaced Bitcoin by a wide margin, rising 44% compared with Bitcoin’s 4% gain after trailing the world’s largest cryptocurrency for months. Historically, a rising ETH/BTC ratio has often coincided with sharp, short-lived rallies in equities that eventually gave way to market peaks, Essaye wrote in a Thursday note.

“In the last 10 or so years, every time we have seen such a robust and pronounced rise in the ETH/BTC crypto-pair, stocks have been sprinting higher in lockstep,” Essaye said. Strong bursts in ETH/BTC have historically lined up with important turning points in equities, among them the “low-volatility” rally of 2017 that preceded the 2018 selloffs, the spike in late 2019 ahead of the 2020 pandemic crash, and the 2021 rally that gave way to the 2022 bear market, he noted.

The ETH/BTC ratio has also surged 130% from its five-year low in April this year, moving in step with the strong tech-led rebound in stocks from their early April 2025 lows, Essaye added.

The one exception came in 2023 and 2024, when Bitcoin consistently outperformed Ether even as stocks remained strong, a departure from the earlier pattern. That contrast makes the current setup especially notable. With ETH/BTC rising again, investors should watch closely in case the historical relationship reasserts itself, Essaye said.

On Aug. 24, the ETH/BTC ratio touched 0.043, its highest level since September 2024, according to FactSet. Ether has gained 38.5% year to date, including a 75.9% surge in the past three months, compared with Bitcoin’s 20.3% year-to-date rise and 6.3% gain over the past three months.

“The risk of the long-ETH/short-BTC trade becoming exhausted appears underappreciated,” Essaye warned, pointing to signs that the momentum has slowed. The uptrend in place since August could soon be tested from the technical perspective, he added.

Also, click here to view the full article published in MarketWatch on August 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.

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.

Sevens Report: Ethereum’s Rally vs. Bitcoin Raises Red Flags

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ETH/BTC rallies have historically aligned with equity blowoff tops

Why the long-ETH/short-BTC trade matters

According to the latest Sevens Report, Ethereum has “meaningfully outperformed Bitcoin with the Long-ETH/Short-BTC trade accelerating rapidly as both cryptos surged towards record highs.” While many traditional investors might dismiss the shift, Sevens emphasized that “there is a key underlying takeaway sourced in cross-asset analysis.”

Historically, sharp ETH/BTC rallies have coincided with “squeezy yet powerful rallies in equity markets preceding near-term blowoff tops.” Examples include the 2017 ETH/BTC surge ahead of the 2018 equity drawdown, a 2020 spike before the pandemic selloff, and a 2021 rally that foreshadowed the “Double Bear Market” of 2022.

Sevens noted that the latest 130% ETH/BTC rally off April lows “has obviously coincided with the resilient tech-led rally in stocks off the 2025 lows.” Unlike 2023–2024, when ETH lagged while equities climbed, the current setup suggests stocks may be vulnerable if crypto momentum fades.

“Bottom line, in prior cases over the last 10 years, every time we have seen such a robust and pronounced rise in the ETH/BTC crypto-pair, stocks have been sprinting higher in lockstep. However, once the upside momentum faded from ETH/BTC rally, it would have been prudent for equity investors to put their guard up,” Sevens concluded.

Also, click here to view the full article on Yahoo Finance published on August 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.

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.

Breakeven Inflation Rates: Powell Has a “Price Problem”

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What’s in Today’s Report:

  • Breakeven Inflation Rates:  Powell Has a “Price Problem”

Futures are modestly lower following a night of underwhelming earnings.

Earnings overnight were bad as tech companies DELL (–6% pre-market) and MRVL (-15% pre-market) both posted disappointing results, as did retailer GAP.

Economically, German retail sales missed expectations (-1.5% vs. (E) 0.0%) but that isn’t moving markets.

Today focus will be on inflation via the Core PCE Price Index (E: 0.3% m/m, 2.9% y/y) and to keep things simple, if this number is “hot” (so Core PCE Price Index above 3.0% y/y) that will increase inflation concerns, push back on rate cut hopes and, likely, pressure stocks further.  The other notable economic report today is Consumer Sentiment (E: 58.6) and focus will be on the inflation expectations inside the report.  The less they rise from last month, the better.

 

Market Technical Assessment: Bitcoin vs. Ethereum

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What’s in Today’s Report:

  • Market Technical Assessment:  Bitcoin vs. Ethereum

Futures are flat following very slightly underwhelming NVDA earnings amidst an otherwise quiet night of news.

NVDA beat earnings and revenue estimates but guidance didn’t meet very elevated expectations.  NVDA is down –2% pre-market but results weren’t disappointing enough to shake broader AI enthusiasm (so the slightly underwhelming NVDA earnings shouldn’t impact the broader market).

Today focus will be on economic data and the key report is Weekly Jobless Claims (E: 230K).  Claims jumped last week and if that continues this week we’ll see a small uptick in labor market anxiety ahead of next Friday’s jobs report (which could put a headwind on markets today).  Other economic reports today include Revised Q2 GDP (E: 3.1%) and Pending Home Sales (E: 0.2%) while we also have one Fed Speaker, Waller at 6:00 p.m. ET.  However, barring a major negative surprise, all of that is unlikely to move markets.

On the earnings front, the reports continue and important results we’re watching today include: BBY ($1.22), MRVL ($0.51) and DELL ($2.09).

 

Why NVDA Earnings Are So Important

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What’s in Today’s Report:

  • Why NVDA Earnings Are So Important
  •  Why Markets Shrugged Off the Trump-Cook Drama
  • Durable Goods and Case-Shiller Data Takeaways

Futures are flat after a mostly quiet night of news as global traders await AI-behemoth NVDA’s quarterly earnings (due out after the close today).

Economically, Australian CPI jumped from 1.9% to 2.8% vs. (E) 2.3% in July, the latest global inflation release to surprise to the upside which is adding to concerns about a resurgence in price pressures across major economies as a result of the trade war.

There are no noteworthy economic releases in the U.S. today and just one Fed official scheduled to speak: Barkin (12:00 p.m. ET).

There is a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s solid 2-Yr auction results added a tailwind to the afternoon equity rally) with investors looking for more signs of strong demand.

With the limited list of catalysts today, markets should be quiet and trade with a positioning-style tone as investors await earnings from KSS ($0.33), ANF ($2.27), RY ($2.36), NVDA ($0.94), SNOW (-$0.57), HPQ ($0.75), and CRWD (-$0.19).

NVDA’s results will clearly be the primary focus as the chip-making giant accounts for roughly ~8% of the entire S&P 500; a miss could spark meaningful volatility while a positive surprise would likely see the major indexes make a run at all-time highs.

 

Is the NOB Spread Signaling a “Run Hot” Economy?

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What’s in Today’s Report:

  • Is the NOB Spread Signaling a “Run Hot” Economy?

Futures are in the red but off their overnight lows as traders digest President Trump’s latest efforts to “fire” Fed Governor Cook, rekindling “Fed independence” concerns.

Economically, French Consumer Confidence fell 2 points to 87 vs. (E) 89 in August while Prime Minister Bayrou has called for a confidence vote on September 8, surrounding budget concerns which introduces a renewed sense of market uncertainty in Europe.

Looking into today’s session there are multiple noteworthy economic reports to watch today including Durable Goods (E: -4.0%), Case-Shiller Home Price Index (E: 2.6%), FHFA House Price Index (E: 0.0%), and likely most importantly, Consumer Confidence (E: 96.4).

There is one Fed official scheduled to speak: Barkin (8:30 a.m. ET) as well as a 2-Yr Treasury Note auction at 1:00 p.m. ET, both of which could impact Treasuries and impact equity market trading today.

Finally, a handful of late season earnings releases are due out including: BMO ($2.12), BNS ($1.28), and OKTA ($0.33), but the main earnings catalyst this week will be NVDA’s release later in the week.

 

Were Powell’s Comments Really That Bullish?

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What’s in Today’s Report:

  • Were Powell’s Comments Really That Bullish?
  • Weekly Market Preview: Does the Tech Pullback Continue? (NVDA Earnings on Wednesday)
  • Weekly Economic Cheat Sheet: More Focus on Inflation (Core PCE Price Index on Friday)

Futures are modestly lower mostly on digestion of Friday’s big rally and following a quiet weekend of news.

Economically, the only notable report was German IFO Business Expectations, which jumped to a one year high (91.6 vs. (E) 90.8).

There was no notable geopolitical news over the weekend.

Today there are two economic reports, Chicago Fed (Prior: -0.10), New Home Sales (E: 628K) and two Fed speakers, Logan (3:15 p.m. ET) and Williams (7:15 p.m. ET), but none of that should move markets as the economic reports shouldn’t change the outlook for growth while Powell largely acknowledged a likely rate cut in September (making other Fed commentary less important).

On earnings, there are two reports to watch today: PDD ($1.69) and HEI ($1.12).

 

Sevens Report: Tech Valuations Look Stretched Despite AI-Driven Leadership

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Massive demand for semiconductors and AI infrastructure fuels gains, but valuations raise sustainability concerns.

Tech Valuations Stretch as AI Boom Meets Investor Caution

According to the latest Sevens Report, “massive demand for semiconductors and AI infrastructure combined with the promise of AI driven leaps in profitability” have made technology the undisputed leader of the S&P 500’s advance.

But valuations now appear difficult to justify. Sevens highlighted Palantir as “the most obvious example,” calling it “a stock that is the best performer in the S&P 500 YTD but also trades at a quasi-absurd 212X forward earnings!” Even broad-based exchange-traded funds such as XLK are trading at “above 29X earnings, a level that hasn’t proven historically sustainable.”

Recent declines in AI-related names, driven by disappointing reactions to earnings at CoreWeave, Applied Materials and Cisco, provided a small relief to valuations. But Sevens warned that “the ‘bar’ to impress investors in the AI names is high.”

With rate cuts expected next month, investors are also rotating into more cyclical sectors such as utilities, industrials and financials. Still, finding value in technology remains a challenge for new money. “The reality is that finding value in the tech space is a challenge, especially for new money that needs to be allocated but doesn’t want to chase sky-high valuations,” Sevens said.

The report suggested that investors can still participate in the AI-driven rally while managing risk by using alternative ETF strategies. These include equal-weight and smart beta approaches, as well as income-focused ETFs that “boost yield, and in doing so lower the aggregate valuation of the ETF.”

“Alternative tech strategies that can complement core tech holdings can lower overall tech valuations in a client portfolio, yet still provide exposure to the key names in the space,” concluded Sevens.

Also, click here to view the full article published in Investing.com on August 21st, 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.

Sevens Report Analysts Weigh Bitcoin Risks Amid Bullish Momentum

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Some see corrections as healthy for long-term growth

Bitcoin’s Resilience: Why Bearish Predictions Fail to Dampen Institutional Adoption and Real-World Growth

Skeptics often lean on traditional economic models that overlook Bitcoin’s unique traits: its fixed supply, programmability, and role as a hedge against fiat devaluation.

Tyler Richey of The Sevens Report and veteran trader Peter Brandt have both issued bearish targets, though framed more as risk assessments than certainties.

Brandt, for instance, assigns only a 25% probability to a pullback toward $55,000–$57,000. He notes that such corrections, while sharp, could ultimately strengthen Bitcoin’s long-term trajectory.

Also, click here to view the full article on Ainvest.com published on August 21st, 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.