Jamie Dimon’s “Cockroach” Warning Puts Credit Markets on Watch

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Recent bankruptcies raise concern over broader economic stress, with Sevens Report highlighting the Baa-over-Treasuries spread as a key risk gauge.

What to Watch for Signs of Broader Credit Market Stress

Jamie Dimon’s remark that “when you see one cockroach, there’s probably more,” referencing the bankruptcy of subprime auto lender Tricolor Holdings, has sparked new worries about hidden credit-market stress. Alongside the collapse of auto-parts maker First Brands, investors are questioning whether these cases are isolated or signs of broader weakness. According to Sevens Report analysis, the key metric to monitor is the Baa-over-Treasuries spread, a measure of risk in high-yield credit. A move toward 2.00% from the current 1.72% would signal rising systemic stress and increased downside risk for equities.

Also, click here to view the full article published in Barron’s on October 17th, 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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Should We Really Be Worried About Banks/Credit?

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What’s in Today’s Report:

  • Should We Really Be Worried About Banks/Credit?
  • Weekly Market Preview:  Focus Shifts to Earnings (And Tech Earnings Need to Be Strong)
  • Weekly Economic Cheat Sheet:  Flash PMIs on Friday the Key Report

Futures are modestly higher on China optimism and as investors look ahead to an important week of earnings.

Chinese GDP beat estimates (1.1% vs. (E) 0.8%) implying that global growth is stable, while a meeting between Treasury Secretary Bessent and Chinese Vice Premier Lifeng on Friday could lower U.S./China trade tensions.

Politically, there was no substantive progress towards ending the shutdown over the weekend.

Today there is only one economic reading, Leading Indicators (E: 0.01%) but it shouldn’t move markets.

Turning to earnings, there are two notable reports today, CLF ($-0.48) and CCK ($1.98), but the key reports come later this week (NLFX, TSLA and INTC all report this week among other notables).

 

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist

Futures are moderately lower mostly on continued concerns about loan quality for U.S. banks, although nothing new happened overnight to specifically pressure stocks.

Economically, the only notable report was EU HICP (their CPI) and it was a bit hot, as Core HICP rose 0.2% vs. (E) 0.1% m/m and 2.4% vs. (E) 2.3% y/y.

Today there are some economic reports, including Housing Starts (1.315M), Import & Export Prices (E: -0.2% m/m, 0.0% m/m) and Industrial Production (E: 0.1%).    There is also one Fed speaker, Musalem (12:15 p.m. ET).

However, they are unlikely to move markets.  Instead, focus on credit and loan quality at banks will be the main market driver and any headlines that imply TriColor and First Brands are isolated incidents (which they likely are) will help stocks rebound.

Finally, earnings season rolls on and some reports to watch today include:  SLB ($0.67), AXP ($3.96), STT ($2.62).

 

Are Tri-Color and First Brands “Cockroaches?”

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What’s in Today’s Report:

  • Are Tricolor and First Brands “Cockroaches?”

Futures are solidly higher following better than expected Taiwan Semiconductor earnings (TSM).

TSM beat earnings and raised guidance, as chip demand is still very strong while the AI cap-ex boom remains in force.

Today there are two notable economic reports, Philly Fed (E: 7.5) and the Housing Market Index (E: 33) along with numerous Fed speakers.  From a data standpoint, given the lack of economic reports lately, solid readings from both reports will be welcomed by investors as it will help reinforce that growth is stable.

Turning to the lineup of Fed speakers today, Waller at 8:00 a.m. ET is likely the only potential market mover because he’s in the running to be the next Fed chair.  Other Fed speakers today include Barkin (8:00 a.m., 12:45 p.m. & 4:30 p.m. ET), Miran (9:00 a.m. & 4:15 p.m. ET), Bowman (10:00 a.m. ET), Kashkari (6:00 p.m. ET).

Finally, earnings season continues to gain momentum and some reports we’ll be watching today include:  TSM ($2.59), SCHW ($1.23), BK ($1.76), USB ($1.11), TRV ($5.88), IBKR ($0.50), CSX (0.42).

Credit Spreads: Are We Seeing Liquidity Tightening?

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What’s in Today’s Report:

  • Credit Spreads: Are We Seeing Liquidity Tightening?

U.S. futures are solidly higher with European equity markets thanks to strong earnings from LVMH and ASML.

Economically, Eurozone Industrial Production fell -1.2% vs. (E) -1.6% m/m in August.

Today, there is one economic release to watch: the Empire State Manufacturing Index (E: -0.9) and a 4-Month Treasury Bill auction at 11:30 a.m. ET that could move short duration yields.

Additionally, today will be a busy day of Fed Speak with Miran (9:30 a.m. & 12:30 p.m. ET), Bostic (12:10 p.m. ET), Waller (1:00 p.m. ET), and Schmid (1:35 p.m. ET) all scheduled to deliver comments over the course of the day.

Finally, investors will remain keenly focused on earnings with quarterly reports due from ASML ($6.36), BAC ($0.94), MS ($2.08), PGR ($5.08), ABT ($1.30), UAL ($2.64), and JBHT ($1.48) today.

 

Oil Prices Hover Near Key Support as Downside Bias Persists Says The Sevens Report

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Sevens Report’s Tom Essaye says WTI crude remains technically bearish, with $60–$61 marking a crucial line for oil bulls.

Oil: Ceasefire Deal Reinforces Bearish Technical Trend

Commodities have maintained a downside bias as easing Middle East tensions weigh on oil markets, according to Tom Essaye, president of the Sevens Report. He notes that WTI crude has been in a bearish trend since August 2024, with $60–$61 per barrel serving as a critical technical support zone. A decisive break below could spark a drop toward $57. Rising global supply from OPEC+ and near-record U.S. production, combined with softer demand expectations, keep risks tilted lower. Still, Essaye cautions that with sentiment crowded to the bearish side, oil remains vulnerable to a short-covering rally on any bullish surprises.

Also, click here to view the full article on Moneyshow.com published on October 13th, 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.

Powell’s Tone Could Add Pressure to Fragile Markets, Says Essaye

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Sevens Report’s Tom Essaye warns that even a mildly hawkish stance from the Fed chair could weigh further on equities.

Stocks Fall as China Retaliation Rattles Traders: Markets Wrap

“Any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today,” said Tom Essaye at The Sevens Report.

Also, click here to view the full article published in Bloomberg on October 13th, 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.

The Declines Could be Sharp and Painful – Tom Essaye Quoted in Bloomberg

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The declines could be sharp and painful warns Tom Essaye

US Stocks Bounce as Waning Trade Fears, AI Deal Fuel Dip Buying

“As long as the AI capex enthusiasm lasts, stocks can hold on,” said Tom Essaye of the Sevens Report. However, “if doubts emerge about the stimulative power of AI for the entire economy and market, then investors will have to face this less-than-ideal reality and the declines could be sharp and painful.”

Also, click here to view the full article published in Bloomberg on October 13th, 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.

AI Now the “Lynchpin” Holding Up Stocks, Warns Tom Essaye

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Sevens Report’s Tom Essaye cautions that AI enthusiasm is masking deeper market risks from tariffs, a cooling labor market, and government dysfunction.

‘AI is becoming a larger and larger lynchpin’ for stock market, analyst warns

Tom Essaye, founder of Sevens Report Research, warns that the stock market could face a “horror-movie scenario” if three key risks hit at once — an AI bubble burst, worsening consumer strain, and a weakening labor market. He points to OpenAI’s $500 billion valuation and stretched tech prices as signs of speculative excess. Meanwhile, rising delinquencies at companies like CarMax show lower-income consumers are increasingly pressured.

Essaye cautions that while the economy still looks stable on the surface, markets are ignoring the potential for rising unemployment and slowing growth. If AI optimism fades and consumer spending weakens, the S&P 500 could fall 20–30%, mirroring the drawn-out collapse of the early 2000s tech bubble.

Also, click here to view the full article published in MarketWatch on October 13th, 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.

Volatility Reset or New Volatility Cycle?

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What’s in Today’s Report:

  • “Volatility Reset” or the Start of a New “Volatility Cycle?”
  • Silver Joins Gold at All-Time Highs

Markets are trading with a clear risk-off tone this morning amid a reescalation in trade tensions between the U.S. and China ahead of a slew of big bank earnings releases today.

Economically, the NFIB Small Business Optimism Index fell to 98.8 vs. (E) 100.5 in September but the Employment Subindex favorably rose for a fourth straight month which should help ease some labor market angst.

Looking ahead to today’s session, focus will remain on the trade war, specifically tensions between the U.S. and China, however, there are also two Treasury auctions (for 3-Month and 6-Month Bill at 11:30 a.m. ET) that could impact yields/Fed policy expectations and subsequently move equities.

Additionally, there are two Fed speakers on the calendar today: Bowman (8:45 a.m. ET) and Powell (12:20 p.m. ET). Obviously, any less-dovish tone from Fed Chair Powell has the potential to add pressure to an already fragile and heavy equity market today.

Finally, today marks the unofficial start of Q3 earnings season with several big banks/financials reporting quarterly results including: BLK ($11.25), JPM ($4.83), GS ($10.93), WFC ($1.55), and C ($1.83) as well as other notables: JNJ ($2.77), DPZ ($4.00).