How Bad Was the News Last Week?

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What’s in Today’s Report:

  • How Bad Was the News Last Week?
  • Weekly Market Preview:  Can Democrats Close the Gap?
  • Weekly Economic Cheat Sheet:  Jobs Report Friday.

Futures are modestly lower following a mostly quiet weekend of news as investors digested last week’s volatility.

On the Debt Ceiling and other Washington issues, there was no major progress over the weekend although Democrats continue to narrow the gap and progress is occurring towards a compromise deal between liberals and moderates (the compromise is likely at $1.5 trillion and the current negotiations are just above $2 trillion, down from $3.5 trillion).

Trade will be in focus again today as the Biden Administration gives a China trade and tariff update at 10:00 a.m. although no new tariffs are expected.

Today there are no notable economic reports although there are two Fed speakers, Bullard and Rosengren, both at 10:00 a.m. ET.  So, focus will be on the trade speech at 10:00 and on the Democrat’s ongoing negotiations.  Any signs of further progress towards a deal could help extend Friday’s rally.

Dow Theory Update

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What’s in Today’s Report:

  • Dow Theory Update

Futures are modestly lower to start the fourth quarter as House Democrats failed to pass infrastructure legislation, while economic data was better than expected.

House Democrats remain divided about the size of the infrastructure and reconciliation bills, and the Debt Ceiling can’t be increased until a compromise is found.

EU and UK global final PMIs slightly beat estimates while EU Core HICP (their CPI) was slightly hot (1.9% yoy vs. (E) 1.8% yoy), implying the global recovery remains on track and that inflation pressures are still firm.

Today’s focus will be on important economic reports.  First, the Core PCE Price Index (E: 0.2%, 3.6%) is the Fed’s preferred measure of inflation and if it’s much hotter than expectations, that will push yields higher and be another headwind on stocks.  Also, the ISM Manufacturing PMI (E: 59.8) gets released and markets will want to see stability there.  We also get Consumer Sentiment (E: 71.0) and the inflation expectations component will be closely watched.  Finally, there are two Fed speakers today, Harker (11:00 a.m. ET) and Mester (1:00 p.m. ET) but neither should move markets.

 

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Tom Essaye Quoted in Barron’s on September 29, 2021

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Why Higher Bond Yields Are Bad News for Tech Stocks Like Amazon and Zoom

Bottom line, the stock market is being driven by the bond market this week and if we see…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Yahoo Finance on September 29, 2021

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Time to Short Nasdaq With These Inverse ETFs?

Really what you’re seeing is, across asset classes, the market is adopting a pro-cyclical view, which means better growth in the future…Tom Essaye, The Sevens Report Research Founder, told Yahoo Finance Live. Click here to read the full article.

The Real Risk to Stocks

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What’s in Today’s Report:

  • The Real Risk to Stocks
  • EIA Analysis and Oil Market Update

Futures are higher following news a government shutdown will be avoided and despite mixed economic data.

Senate Majority Leader Schumer announced a deal to fund the government and avoid a shutdown tomorrow, although this was always expected (and this does not address the Debt Ceiling).

Economic data was mixed as the Chinese manufacturing PMI fell below 50 (49.6 vs. (E) 50.1) while UK GDP handily beat estimates at 5.5% vs. (E) 4.8%, but the data isn’t moving markets.

Today the key report will be Jobless Claims (E: 335K) and markets will want to see them drop back towards 300k.  We also get the Final Q2 GDP (E: 6.7%) but at this point, that’s a very “old” number. There are also numerous Fed speakers today including more Powell/Yellen testimony along with Williams (10:00 a.m. ET), Bostic (11:00 a.m. ET), Harker (11:30 a.m. ET), Evans (12:30 p.m. ET), Bullard (1:05 p.m. ET), and Daly (2:30 p.m. ET).

Finally, today is the last trading day of the month and quarter so some additional volatility on month/quarter-end positioning shouldn’t be a surprise.

Tom Essaye Quoted in OPTO on September 28, 2021

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Why the Evergrande crisis is causing global market jitters

There really isn’t a global contagion risk with Evergrande because in the end, and as far as we know, the loans…wrote Tom Essaye, the founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in The Madison Leader Gazette on September 28, 2021

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Dow skids around 400 points lower as rising bond yields spark equity selloff

Bottom line, the stock market is being driven by the bond market this week and if we see bonds…said Tom Essaye, founder and president of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Shouzy on September 27, 2021

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Stock futures opened little changed after cyclical-led session

Really what you’re seeing is, across asset classes, the market is adopting a…Tom Essaye, The Sevens Report Research Founder, told Shouzy Finance Live on Monday. Click here to read the full article.

Tom Essaye Quoted in CNBC on September 28, 2021

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10-year yield continues rapid climb, hits the highest since June

The 10-year is now trading at a key level that could prove to be an inflection point for…according to Tom Essaye of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Forbes on September 28, 2021

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Dow Sinks 500 Points As Spiking Treasury Yields Drive Forceful Tech Stock Sell-Off

Yields on the 10-year Treasury shot up 3.5 basis points on Tuesday to their…market analyst Tom Essaye, president of Sevens Report Research, said in a note. Click here to read the full article.