Sevens Report: 10-Year Yield Drop Below 4% Could Break ‘Bad News Is Good’ Trade

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Tom Essaye warns a fast move lower would signal economic anxiety, not relief

A sudden move below 4% on 10-year Treasury note yield could kill the ‘bad news is good’ market vibe

Lower yields can be a positive for stocks, foremost by making equities more attractive in comparison. But context matters, and a sudden drop could serve to unnerve investors who have largely continued to view negative economic news as a positive because it reinforces expectations for the Federal Reserve to resume cutting interest rates later this month, said Tom Essaye, founder of Sevens Report Research, in a note.

“The 4.00% level on the 10-year yield is important and if we move quickly through that level, it will signal more economic anxiety and that will further undercut the ‘bad-is-good’ narrative around weak data and Fed rate cuts (point being, if the 10-year yield falls quickly through 4.00% and heads lower, bad data will be bad for stocks because it’ll signal rising chances of an economic slowdown),” he wrote.

Also, click here to view the full article published in MarketWatch on September 9th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Sevens Report: ‘Bearish Wheels in Motion’ for Oil as Supply Rises, Demand Wanes

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Tyler Richey says crude risks a deeper slide with $61.50 key support level

‘Bearish wheels are in motion’ for oil after a three-session climb

Crude oil is on track for its first loss in four sessions as supply builds and demand softens, according to Tyler Richey, co-editor at Sevens Report Research.

“OPEC+ is re-engaging in a fight to reclaim market share from non-member producers, while demand faces pressure from rising stagflation risks,” Richey said. He noted the dynamic is “straight out of the economic 101 textbook” and has set the “bearish wheels in motion” for crude.

On the charts, $61.50 a barrel is the key near-term support for WTI. A break below that could accelerate losses toward the $57–$58 range, Richey warned. October WTI recently traded at $62.49, down 1.9% on Thursday.

Also, click here to view the full article published in MarketWatch on September 11th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Sevens Report: U.S. Labor Market Stable, But Cracks Emerging

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Thresholds in claims and unemployment could trigger sharp equity declines

What does a soft jobs market mean for markets?

Sevens Report said U.S. labor conditions remain broadly stable despite recent weak data, citing jobless claims below 250,000, continued positive payrolls, and JOLTS near 7 million.

The firm warned, however, that momentum is fading: hiring is slowing even as layoffs remain limited. Key thresholds include jobless claims above 260,000, a four-week average above 300,000, unemployment over 4.5%, and JOLTS falling under 6.5 million. Each would signal real deterioration.

On market impact, Sevens cautioned that a sharp labor downturn could drive a 15%–30% equity drop, with the S&P 500 potentially sliding 500–700 points initially. Defensive sectors such as staples, utilities, and healthcare would likely outperform, alongside lower-volatility ETFs and mega-cap tech if the AI trade holds.

“Bottom line, the labor market is not bad; however, it is losing momentum and this is something we need to watch carefully,” the report said.

Also, click here to view the full article published in Investing.com on September 8th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Tom Essaye: Jobs Report Needs Stronger Beat to Derail Fed Rate-Cut Hopes

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Different payroll scenarios could spark sharp swings in stocks and yields

It will take a doozy of a jobs report to derail investor expectations for a September rate cut

Tom Essaye, founder of Sevens Report Research, said it would take a much stronger payrolls beat to derail rate-cut expectations and pressure equities.

He outlined several scenarios:

  • Best case: Payrolls rise around 150,000 with steady unemployment and tame wage growth. This would ease growth worries while keeping a September cut in play.

  • Hot surprise: Payrolls of 250,000+ and unemployment at 4% or below could spark a 1%+ S&P 500 drop and a sharp rise in 10-year Treasury yields.

  • Weak reading: Payrolls below 25,000 with unemployment at 4.4% could trigger a short-term rally on “bad-is-good” rate-cut optimism, but Essaye warned it would ultimately weigh on stocks as growth fears mount.

“A bounce in the S&P 500 initially shouldn’t be a total surprise, but beyond the short term this outcome would not be positive,” Essaye wrote.

Also, click here to view the full Market Watch article published in Morningstar on September 4th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Sevens Report’s Tyler Richey: AI Stock Stumble Signals Bearish Exhaustion

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Mega-cap tech weakness poses broader risks to equity markets

AI stock boom starts to stumble as investors increase bets against sector

A recent stumble in AI-related stocks “highlights some degree of bearish exhaustion in the underlying AI narrative,” said Tyler Richey, co-editor at Sevens Report Research.

“There are signs the market is turning on AI stocks,” Richey warned, adding that a meaningful and lasting rethinking by investors could pose significant risks for the broader equity market. The concern stems from the heavy concentration of mega-cap tech stocks such as NVIDIA, Microsoft, and Meta within the S&P 500 and other major indexes.

“This could be extremely detrimental to even the most vanilla index strategies,” Richey said. With a record amount of U.S. personal wealth tied to equities, a major AI-driven drawdown could create a negative wealth effect, fueling a bear market in stocks and risk assets while pushing investors toward safe havens amid a weakening economy.

Also, click here to view the full article published in S&P Global on September 3rd, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Tom Essaye Interviewed on Yahoo Finance as the Fed Faces Twin Pressures

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Tom Essaye: Fed Faces Twin Pressures of Rising Inflation and Weakening Jobs

Fed is in the ‘worst possible’ position, analyst says

Central bank policy outlook grows more complicated heading into fall

The Federal Reserve is under mounting pressure as inflation shows signs of picking up while the labor market begins to soften, according to Tom Essaye, founder of Sevens Report Research.

Speaking on Opening Bid, Essaye explained that this combination leaves the Fed in a difficult policy position heading into the fall. The central bank must balance the risk of tightening too little against the danger of tightening too much at a time when economic growth is already showing cracks.

“The Fed is caught between two mandates,” Essaye noted, adding that rising producer and consumer price data alongside weakening job gains increases the likelihood of a policy dilemma in the coming months.

Also, click here to view the full video on Yahoo Finance published on August 30th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Tom Essaye: Ethereum’s Outperformance Over Bitcoin Carries Equity Market Signals

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ETH/BTC rallies have historically preceded stock market peaks

Bitcoin Vs. Ethereum: Why I’m Closely Watching Their Trading Relationship

Since early July, a noteworthy shift has emerged in the crypto space, with Ethereum meaningfully outperforming Bitcoin, according to Tom Essaye, president of Sevens Report Research. The long-ETH/short-BTC trade has accelerated rapidly as both cryptocurrencies surged toward record highs.

At first glance, investors might dismiss the move as noise. But Essaye noted that past accelerations in the ETH/BTC ratio often aligned with powerful equity rallies that eventually gave way to broader market peaks.

“In prior cases over 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. However, he cautioned that once the momentum faded from those rallies, equity investors who did not raise their guard often faced sharp pullbacks.

Bottom line: While the latest ETH/BTC surge reflects strong demand for Ethereum, it may also serve as an early warning indicator for stock markets if the historical relationship holds true.

Also, click here to view the full article on Moneyshow.com published on September 29th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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.

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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.

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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.

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