Market Multiple Table: August Update

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What’s in Today’s Report:

  • Market Multiple Table: August Update
  • Chart: JOLTS Hit New Record

Stock futures are little changed this morning as investors digest Monday’s hawkish Fed chatter and continue to monitor the status of the Delta variant outbreak around the globe.

Economically, Germany’s August ZEW Survey was moderately disappointing while domestically, the NFIB Small Business Optimism Index came in at 99.7 vs. (E) 103.3, however neither report is materially moving markets given the recent focus on the very strong July jobs report in the U.S.

On infrastructure, the $1.2T bipartisan bill is expected to pass a final vote in the Senate later this morning but that has largely been priced into markets already.

Today, there is one economic report to watch: Productivity and Costs (E: 3.5%, 1.2%) and one Fed speaker: Evans (2:30 p.m. ET).

Additionally, there is a 3-Year Treasury Note auction at 1:00 p.m. ET, and a soft outcome could result in another wave of hawkish money flows like we saw on Monday (yields higher, dollar higher, mixed price action in equities).

Tom Essaye Quoted in Crain’s Cleveland Business on August 6, 2021

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Wall Street is watching where you’re going to make some big bets

Rising COVID cases will only hurt the market if they result in a change in…Tom Essaye, a former Merrill Lynch trader who writes the “Sevens Report” newsletter, wrote in a note. Click here to read the full article.

Tom Essaye Quoted in The Byron Review on August 6, 2021

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Jobs increased by 943,000 in July; Unemployment rate drops to 5.4%

The July jobs report reinforces the fact that the Fed will reduce its quantitative easing over the…Tom Essaye, founder and chairman of Sevens Report Research said. Click here to read the full article.

 

Tom Essaye Quoted in India’s Investing.com on August 6, 2021

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Copper: As Bears Claw The Red Metal, Could It Slip Below $4?

The point to watch is whether the price falls to $4.20…Tom Essaye, founder of Sevens Report Research, said in a note. Click here to read the full article.

Tom Essaye Quoted in CNBC on August 5, 2021

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10-year Treasury yield tops 1.2% after weekly jobless claims data matches expectations

Negatively, there remain aggressive buyers on Treasury dips and it’s going to take a real, impactful headline…Tom Essaye of Sevens Report said in a note. Click here to read the full article.

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Tom Essaye Quoted in Market Watch on August 5, 2021

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Treasury yields end higher as jobless claims fall

The 10-year yield bounced off the 1.13% level (which seems to be support) and clearly the 10-year can react…Tom Essaye, founder of the Sevens Report Research, said in a note. Click here to read the full article.

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The Bullish Recipe (Why Stocks Are So Resilient)

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What’s in Today’s Report:

  • The Bullish Recipe (Why Stocks Are So Resilient)
  • Weekly Market Preview:  Will COVID Weigh on the Recovery?
  • Weekly Economic Cheat Sheet:  Key Inflation Data This Week

Futures are slightly lower following a mostly quiet weekend of news as there were no major changes to the COVID outlook or the economic recovery.

Economic data was solid as German and Chinese exports for July both beat estimates.

Chinese CPI rose 1% vs. (E) 0.8% and that may reduce the amount of stimulus officials unleash on the economy (so potentially negative for global growth).

Today focus will be on JOLTS (E: 9825M) and on Fed commentary following the jobs report (Bostic at 10:10 a.m. ET and Barkin at 11:20 a.m. ET).  But, unless JOLTS are a major surprise or Fed officials are shockingly hawkish, these events shouldn’t move markets.  As such, the tenor of COVID headlines (and whether we are seeing behavior changes) will continue to drive markets in the near term.

Tom Essaye Quoted in CNBC on August 2, 2021

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Dow tumbles nearly 100 points after late-day sell-off in stocks

At the end of the day, the stock market is driven by two things: 1) Earnings and…Tom Essaye, founder of Sevens Report, said in a note. Click here to read the full article.

Is Stagflation Possible? Yes.

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What’s in Today’s Report:

  • Is Stagflation Possible?  Yes.

Futures are little changed ahead of this morning’s jobs report.

Economic data underwhelmed overnight with Japanese Household Spending falling –3.2% while German Industrial Production missed estimates (-1.3% vs. (E) 0.5%).

On COVID, headlines remain net negative as cases continue to rise and analysts look for any signs of a loss of economic momentum (so far there’s nothing concrete).

Today the focus is on the jobs report and expectations are as follows:  Job Adds:  900K, UE Rate:  5.7% and Wages: 0.3% m/m and 3.8% y/y.  Again, the biggest risk to markets is for a “Too Hot” jobs number that shifts the tapering timeline, and if that occurs we should brace for volatility.

Tom Essaye Quoted in The Byron Review on August 3, 2021

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Analysts increase third and fourth quarter estimates after second quarter blowout

On the earnings front, most of the systemically important companies are behind…wrote Tom Essaye in a recent memo. Click here to read the full article.