Geopolitical factors remain the primary influence on the oil market

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Geopolitical factors remain the primary influence on the oil market: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Oil prices fall, but settle above lows, as traders monitor Middle East risks

Geopolitical factors remain the “primary influence on the oil market,” and news that Israel was withdrawing some troops from parts of Gaza was seen as a step toward de-escalation in its military conflict with Hamas, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

However, reports on Monday indicated that there has been no progress toward a cease-fire agreement between the sides.

Also, Israeli Prime Minister Benjamin Netanyahu reportedly announced that a date has been set for an invasion of Rafah, which has been a “hotly contested issue in the ongoing talks between Israel and Hamas,” said Richey.

“The initial perception of improving geopolitical dynamics between Israel and Hamas initially weighed on oil prices [Monday], but renewed uncertainties about the potential for the military conflict to intensify” saw much of the early losses recovered before the close, Richey noted.

Also, click here to view the full MarketWatch article published on Morningstar on April 9th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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The CPI report has the potential to either push the S&P 500 index to new highs

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The CPI report has the potential to either push the S&P 500 index to new highs: Sevens Report, Quoted in MarketWatch

Fed-funds futures point to doubts over June rate cut as inflation data looms

Investors this week are waiting for a reading on inflation in March due out on Wednesday from the closely watched consumer-price index. The CPI report has the potential to either push the S&P 500 index to new highs or extend the U.S. stock market’s drop last week, according to a Sevens Report Research note on Monday.

Also, click here to view the full MarketWatch article published on April 8th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Investors are on edge that the Fed may delay rate cuts

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Investors are on edge that the Fed may delay rate cuts: Tom Essaye Quoted in Forbes

Jobs Report: Unemployment Hits 3.8% As Job Growth Pops

How the jobs report impacts market expectations for an eagerly anticipated cut to interest rates, a move which would stimulate economic growth and which is currently priced in to come in June. “Investors are on edge [that] the Fed may delay rate cuts from June until later in the summer (or late in 2024) if we get another hot employment report,” Sevens Report founder Tom Essaye explained ahead of the release.

Also, click here to view the full Forbes article published on April 5th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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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Investors are on edge the Fed may delay rate cuts

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Investors are on edge the Fed may delay rate cuts: Sevens Report Founder, Tom Essaye, Quoted in MarketWatch

A ‘too hot’ jobs report poses biggest risk to stock-market rally: strategist

The setup for the stock market heading into the release of the Labor Department’s April employment report at 8:30 a.m. Eastern time is a bit out of the ordinary, Tom Essaye, founder of Sevens Report Research, said in a Thursday note.

While either a “too hot” or “too cold” jobs figure is often sufficient to spark a market selloff, the biggest danger on Friday is firmly tilted toward a stronger-than-expected reading, he said.

“Investors are on edge the Fed may delay rate cuts from June until later in the summer (or late in 2024) if we get another hot employment report,” Essaye wrote. “If that occurs, expect a partial repeat of Tuesday,” when the Dow Jones Industrial Average fell nearly 400 points, or 1%, for its worst performance since March 5, while the S&P 500 lost 0.7% and the Nasdaq Composite declined 1%.

Also, click here to view the full MarketWatch article published on April 4th, 2024. 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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CPI Preview: Good, Bad, Ugly

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CPI Preview: Good, Bad, Ugly: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, Ugly
  • Where to Find Rate Cut Probabilities

Stock futures are modestly higher this morning as the bond market steadies ahead of tomorrow’s key inflation data while financial newswires were mostly quiet overnight.

Overseas, Taiwan’s headline CPI fell sharply from 3.1% to 2.1% vs (E) 2.5% in March. Domestically, the NFIB Small Business Optimism Index dropped to 88.5 vs. (E) 89.9.

Looking ahead to today’s session, there are no economic reports today and no Fed officials are scheduled to speak which is setting up a fairly quiet morning in the markets.

The one potential catalysts on the calendar today is the 3-Yr Treasury Note auction at 1:00 p.m. ET. Equity markets are watching yields closely here, so if today’s auction is weak and yields move higher this afternoon that will weigh on stocks and other risk assets. However, moves should be limited as traders position into tomorrow’s inflation data.

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The Most Important Short-Term Market Indicator

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The Most Important Short-Term Market Indicator: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Most Important Short-Term Market Indicator
  • Weekly Market Preview:  Will CPI Decline Further?
  • Weekly Economic Cheat Sheet:  Inflation in Focus This Week (And It Needs to Keep Falling)

Futures are flat following a mostly quiet weekend as markets digest Friday’s rally and look ahead to Wednesday’s CPI.

Geo-political tensions eased slightly and that’s weighing modestly on oil prices as Iran said it would not retaliate again Israel if a cease-fire in Gaza is reached.

Economically, German Industrial Production solidly beat estimates (2.1% vs. (E) 0.3%).

Today will be a mostly quiet day as there are no notable economic reports and just one Fed speaker, Kashkari (7:00 p.m. ET), but he speaks after the close.  So, digestion of Friday’s rebound and positioning ahead of Wednesday’s CPI will likely drive trading today.

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Why Did Stocks Drop Again?

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What’s in Today’s Report:

  • Why Did Stocks Drop Again?
  • How High Can Gold Go?

Futures are bouncing modestly from Thursday’s afternoon selloff, following a quiet night of news and as investor look ahead to today’s jobs report.

Economic data overnight (German Manufacturers’ Orders and Euro Zone retail sales) slightly missed expectations but the numbers aren’t increasing growth worries.

Today the focus will be on the jobs report and expectations are as follows: 200K Job Adds, 3.9% Unemployment Rate, 4.1% y/y Wage Growth.  The risk for this market remains for a “Too Hot” report that shows strong job adds, low unemployment and hot wages, while a number modestly below expectations would be welcomed as “Goldilocks” and likely spur a rebound in stocks and bonds.

In addition to the jobs report, we also have several Fed speakers including Collins (8:30 a.m. ET), Barkin (9:15 a.m. ET), Logan (11:00 a.m. ET) and Bowman (12:15 p.m. ET). If their tone is hawkish, it could reduce June rate cut chances and increase volatility.

Sevens Report Quarterly Letter 

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Jobs Report Preview (An Important One)

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What’s in Today’s Report:

  • Jobs Report Preview (An Important One)
  • Is the Short-Vol Trade Starting to Unwind?
  • EIA Analysis and Oil Market Update

Futures are modestly higher as economic data and corporate earnings were slightly better than expected.

Economically, Euro Zone and UK Composite PMIs were above 50 and that’s pushing back on EU recession worries.

On earnings, Levi Strauss (LEVI) posted strong results (stock up 9% pre-market) and that’s helping to counter soft retailer earnings from PVH and ULTA.

Markets are still sensitive to hawkish data or commentary that reduces June rate cut chances, so the focus today will be on Jobless Claims (E: 213K) and on several Fed speakers including Barkin (12:15 p.m. ET), Mester (2:00 p.m. ET) and Kugler (7:30 p.m. ET).  Tomorrow’s jobs report should keep volatility somewhat subdued, but if there are any hawkish surprises from the data or Fed speak, don’t be surprised if there’s more volatility.

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A Four Way Assault on the Bullish Mantra

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What’s in Today’s Report:

  • Why Did Stocks Drop and What’s It Mean for Markets? (Four Reasons)
  • JOLTS Data Takeaways – “Solid Enough” for Now
  • Chart: The S&P 500 Violated It’s 2024 Uptrend Yesterday
  • Chart: The “Short-Vol Trade” Is Beginning to Unravel (More to Come)

Stock futures are lower again this morning as the hawkish money flows of early Q2 continue with the 10-Yr yield at YTD highs ahead of Powell’s speech on the economy today.

Economically, China’s Composite PMI met estimates at 52.7 while the EU’s “Narrow Core HICP” (their Core-CPI equivalent) favorably fell from 3.1% to 2.9% vs. (E) 3.0%.

Today, there are two important economic reports due out: The ADP Employment Report (E: 150K) before the open and then the ISM Services Index (E: 52.7). Good economic news has been bad for markets lately, so softening growth numbers and low/falling inflation metrics in today’s data are the best case scenario for stocks today.

Beyond the data this morning, there are several Fed officials scheduled to speak: Bowman (9:45 a.m. ET), Goolsbee (12:00 p.m. ET), Powell (12:10 p.m. ET), and Barr (1:10 p.m. ET).

Powell’s speech at Standford shortly after 12:00 p.m. (ET) will get the most attention as traders look for him to reiterate the key takeaways from the March FOMC meeting (likely summer rate cut, three cuts in 2024 expected). Any hints at “higher for longer” will add to the hawkish money flows that have been weighing on stocks so far in Q2.

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The key for the ISM manufacturing survey is stability

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The key for the ISM manufacturing survey is stability: Tom Essaye Quoted in Barron’s

Stock Futures Point to Record Highs as Investors Mull Cuts to Interest Rates

“The key for the ISM manufacturing survey is stability. An in-line or better than expected result will further reinforce that growth is resilient and likely support the early rally,” said Tom Essaye, founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on April 1st, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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.