Tom Essaye Interviewed with TD Ameritrade Network on April 21, 2021

Tom Essaye Talks Airline Stocks

Tom Essaye takes a look at some of the travel stocks as the market is getting a little bit of a dose of reality being too optimistic about the end of the pandemic. The cruise lines are weak due to CDC guidelines against sailing in 80% of pre pandemic regions. United airlines gave disappointing 2021 guidance after missing…Click here to watch the full video.

Are Higher Taxes a Risk to the Rally?

What’s in Today’s Report:

  • What the Capital Gains Tax Headline Means for Markets

WatFutures are modestly higher thanks to better than expected global economic data.

Economic data was good overnight as global flash manufacturing PMIs beat estimates in Japan (53.3 vs. (E) 52.7), the EU (63.3 vs. (E) 62.3) and the UK (60.7 vs. (E) 59.1).  Additionally, UK Retail Sales also beat expectations (7.2% vs. (E) 4.2%), and in sum the data implies the global economic recovery is gaining momentum (which is a positive).

Today the key report will be the April Flash Composite PMI (E: 59.5), but markets will also be looking for more clarity on proposed tax increases from the Biden administration.  We also get New Home Sales (E: 887K) but that shouldn’t move markets.

On the earnings front, some reports we’re watching today include:  AXP ($1.68), SLB ($0.19), HON ($1.80).

Tom Essaye Quoted in CNBC on April 19, 2021

Dow closes 250 points lower for back-to-back losses, reopening plays lead decline

“By now, we are all used to companies beating analyst estimates,” said Tom Essaye, founder of Sevens Report. “The key …” Click here to read the full article.

Tom Essaye Interviewed with Yahoo Finance on April 16, 2021

Tom Essaye, Founder and President of Sevens Report Research, joins Yahoo Finance’s Kristin Myers and Alexis Christoforous to discuss market outlook, bank earnings, and the latest economic data and more…Click here to read the full article.

Why Do Indian COVID Cases Matter to Markets?

What’s in Today’s Report:

  • Why Do Indian COVID Cases Matter to Markets?
  • S&P 500 Chart: A Long Way to the 200 DMA

Stock futures are wavering between gains and losses this morning as a spike in COVID-19 cases in several global “hot spots” is raising concerns about the future of the economic recovery while NFLX earnings disappointed yesterday.

A sharp rise in COVID cases in Japan and India caused Asian markets to decline overnight amid the threat of new lockdowns and ultimately a slower than expected economic normalization process.

There are no economic reports or Fed speakers today but there is a 20-Year T-Bond auction at 1:00 p.m. ET that could move Treasury markets.

Aside from coronavirus developments, market focus will remain on earnings today following yesterday’s disappointing results by NFLX. Notable companies releasing Q1 results today include: VZ ($1.29), NEE ($0.61), CMG ($4.88), DFS ($2.88), LVS (-$0.28), and CP ($3.46).

Earnings Season Update

What’s in Today’s Report:

  • Earnings Season Update: Are Upside Risks Building?

U.S. stock futures are trading lower with most overseas markets as investors digest the recent run to fresh records amid rising COVID-19 cases and mostly upbeat earnings.

German PPI was hotter than expected o/n with a headline of 0.9% (E: 0.5%) but the report is not materially moving markets.

Looking into the U.S. session today, there are no economic reports and no Fed officials are scheduled to speak. There is a 52 Week T-Bill Auction at 11:30 a.m. ET, however, that could influence bond yields and ultimately stocks if the results are far from expectations.

Earnings season will continue to pick up today with JNJ ($2.31), LMT ($6.32), PG ($1.19), and TRV ($2.44) releasing Q1 results ahead of the bell while NFLX ($2.98), CSX ($0.95), and IBKR ($0.90) will report after the close.

Bottom line, markets have been trading with a risk-off tone so far this week amid a resurgence in COVID-19 cases in several global hotspots. And if the news flow regarding the latest regional outbreaks continues to deteriorate, stocks could continue to decline, potentially sharply, as the health of the recovery will come into question.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on April 19, 2021

Oil prices gain as traders mull demand cues, supply prospects

There is some chatter about demand concerns “with new lockdown measures being imposed in India and other COVID-19 hotspots around the globe, however…” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Tom Essaye Quoted in Barron’s on April 16, 2021

Bond Yields Plunged and Stocks Rose. Here’s What’s Next.

The yield fell to 1.55% from 1.63%. Once it fell below 1.60%, those who were short the bonds rushed to buy them back, according to Sevens Report Research. That sent the price higher and…Click here to read the full article.

Stock Market Graph

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What’s Driving this Rally in Stocks?

What’s in Today’s Report:

  • What’s Driving This Rally in Stocks?
  • Weekly Market Preview:  Can Yields Stay Low (And Push Stocks Higher?)
  • Weekly Economic Cheat Sheet:  Flash PMIs on Friday are the Key Report This Week

Futures are modestly lower as markets digest last week’s rally following a quiet weekend of news.

There was no notable domestic or international economic data or central bank speak over the weekend.

Bitcoin volatility is weighing slightly on some momentum stocks like TSLA as Bitcoin fell more than 19% at the lows this weekend, although it’s since recovered somewhat.  However, the decline came on very low trading volumes.

Today there are no economic reports and no notable Fed speak, so focus will be on Treasury yields and if they can continue to stay low, and in doing so help support this rally in stocks.  Earnings season also continues to move forward, with some notable reports today: KO ($0.50), IBM ($1.67), UAL (-$6.97).

April Economic Breaker Panel: Is the Economy Set to Overheat?

What’s in Today’s Report:

  • April Economic Breaker Panel: Is the Economy Set to Overheat?
  • EIA Analysis and Oil Update

Futures are moderately higher following a solid start to earnings season (GS/WFC/ABB/TSMC/LVMH all posted good results) and ahead of a lot of economic data later today.

Speaking of today’s data, the key reports to watch today are (in order of importance):  Jobless Claims (E: 695K), Empire State Manufacturing Index (E: 17.0), Philadelphia Fed Manufacturing Index (E: 43.0), Retail Sales (E: 5.6%) and Industrial Production (E: 2.8%).  As has been the case, markets will want to see solid activity to imply the economic recovery is on-going, but also no hints of building inflation pressures.

There are also several Fed speakers including Bostic (11:30 a.m. ET), Daly (2:00 p.m. ET) and Mester (4:00 p.m. ET).  Yesterday Vice Chair Clarida got more forcefully dovish, so we’ll see if that sentiment is echoed by other Fed members today.

Finally, earnings season continues to roll on and we get several notable reports this morning including: BAC ($0.65), C ($2.56), TSM ($0.95), PEP ($1.12), UNH ($4.41), DAL (-$2.94), AA ($0.48), PPG ($3.67).