Powell Speech Preview

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Powell Speech Preview (Good, Bad & Ugly): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Powell Speech Preview:  Good, Bad & Ugly
  • EIA Update and Oil Market Analysis

Futures are slightly higher following a quiet night of news as investors await Fed Chair Powell’s speech later today.

Earnings overnight were mixed with TSLA (down 5% after hours) missing estimates while NFLX (up 14% after hours) posted strong results.

Today will be a very busy day of data and Fed speak.  The key event today is Powell’s speech at noon, and to keep things simple, if Powell repeats the sentiment that the spike in Treasury yields has done the Fed’s job for it and, as such, another rate hike is unlikely, that should be positive for stocks and bonds.  If he does not repeat that sentiment and leaves the door open for another hike in 2023, that will be a negative.

Outside of Powell, we get several important economic reports today including:  Jobless Claims (E: 211K), Philadelphia Fed Manufacturing (E: -7.0) and Existing Home Sales (E: 3.900M) and markets will want to see Goldilocks data to support a bounce.

Back to the Fed, there are multiple speakers today other than Powell, including Jefferson (9:00 a.m. ET), Goolsbee (1:20 p.m. ET), Barr (1:30 p.m. ET), Bostic (4:00 p.m. ET); Harker (5:30 p.m. ET) and Logan (7:00 p.m. ET) although their comments will be overshadowed by Powell, so they shouldn’t move markets.

Finally, earnings continue and important reports today include:  T ($0.63), TSM (1.16), AAL (0.26), WAL ($1.91) and CSX ($0.42).

Powell Speech Preview

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Treasury Yields Are Rising Back Towards Cycle Highs

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Treasury Yields Are Rising Back Towards Cycle Highs: Tom Essaye Quoted in Barron’s

Stocks Open Lower as Retail Sales, Middle East Conflict Overshadow Earnings

Sevens Report Research’s Tom Essaye noted prior to the retail sales report that markets appeared to react to news President Joe Biden will visit Israel on Wednesday.

“Treasury yields are rising back towards cycle highs on news that President Biden will travel to Israel tomorrow to try and ease tensions in the region,” Essaye wrote.

Earnings season is kicking into full gear, but so far the reports have been overshadowed by the Israel-Hamas war and economic developments.

Also, click here to view the full Barron’s article published on October 17th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Treasury Yields Are Rising

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Yields Are Rising – Tom Essaye Quoted in Barron’s

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Yields Are Rising: Tom Essaye Quoted in Barron’s

Stocks Gain as Concerns About Conflict in Middle East Ease

Sevens Report Research’s Tom Essaye told Barron’s that reports President Joe Biden is weighing a visit to Israel have sent stocks higher and oil prices lower. WTI crude oil futures were down 0.7%, to $86.93 a barrel.

“Yields are higher but that’s likely by nervous investors reversing ‘fear based’ positions. That came last week as a result of the Israel/Hamas conflict,” Essaye wrote. “Point being, yields are rising as investors get more comfortable with the geo-political environment.”

Also, click here to view the full Barron’s article published on October 16th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Yields Are Rising

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Hard Landing vs. Soft Landing Scoreboard Update

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Hard Landing vs. Soft Landing Scoreboard Update: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Didn’t Stocks Drop On Yesterday’s Yield Spike?
  • Hard Landing vs. Soft Landing Scoreboard Update

Stock futures are lower and oil is up 3% as tensions in the Middle East remain elevated despite President Biden’s visit to Israel.

Chinese economic data topped estimates across the board overnight. But an imminent default by embattled property developer Country Garden weighed on sentiment in Asian markets.

In Europe, U.K. CPI came in hot as it held steady at 6.7% vs. (E) 6.5% in September.  While the Eurozone HICP “Narrow Core” met estimates at 4.5%.

Looking into today’s session, there will remain considerable focus on the conflict between Israel and Hamas amid Biden’s visit to the region and if no progress is made towards a ceasefire, rising oil prices will continue to act as a headwind on risk assets.

Domestically, there is just one economic report today: Housing Starts (E: 1.394 million) that should not meaningfully move markets. There are aslo multiple Fed officials scheduled to speak: Waller, Williams, Bowman, and Harker.

Earnings season also continues today with: MS ($1.27), ALLY ($0.80), CFG ($0.92), WGO ($1.32), TRV ($2.93), and PG ($1.71) and reporting ahead of the bell, while TSLA ($0.75) and NFLX ($3.46) will release results after the close.Hard Landing vs. Soft Landing

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An Invasion of Gaza by Israel Remains Imminent

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An invasion of Gaza: Tom Essaye Quoted in Barron’s

Stocks Are Rising Ahead of Big Week for Earnings

The Dow Jones Industrial Average was up 215 points, or 0.6%, shortly after the market opened on Monday. The S&P 500 was up 0.5%. The Nasdaq Composite rose 0.4%.

“Futures are slightly higher as the weekend brought no major changes to the current macro-economic set up,” wrote Sevens Report Research’s Tom Essaye earlier Monday morning. “Geopolitically, an invasion of Gaza by Israel remains imminent but so far the conflict hasn’t expanded regionally and oil is little changed as a result.”

Also, click here to view the full Barron’s article published on October 16th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Israel Readies For A Potential Invasion

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How to Explain the Israel-Hamas Conflict to Clients

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How to Explain the Israel-Hamas Conflict to Clients: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • How to Explain the Israel-Hamas Conflict to Clients (How It Matters to Markets)
  • Empire State Manufacturing Index Takeaways (More Goldilocks Data)

Stock futures are modestly lower this morning as Treasury yields are rising back towards cycle highs. This is on news that President Biden will travel to Israel tomorrow to try and ease tensions in the region.

Economic data was largely shrugged off overnight. There were more signs of disinflation as wage pressures eased in the latest U.K. Labour Report. While New Zealand’s latest CPI report undershot estimates at 5.6% vs. (E) 5.9% year-over-year.

Today is lining up to be a busy session news-wise as we get several economic reports in the U.S. including: Retail Sales (E: 0.3%), Industrial Production (E: 0.0%), Business Inventories (E: 0.3%), and the Housing Market Index (E: 45). Investors will want to see more Goldilocks data supporting both peak-Fed-hawkishness and prospects for a soft economic landing in order for stocks to continue to rally.

There are also multiple Fed speakers to watch: Williams, Bowman, Barkin, and Kashkari. Markets will be looking for more commentary that suggests the FOMC is done with rate hikes for the cycle.

Finally, earnings season continues to ramp up with: BAC ($0.80), GS ($5.32), JNJ ($2.52), and LMT ($6.66) reporting results before the bell. While UAL ($3.40) and JBHT ($1.87) will report after the close. A drop-off in earnings is not priced into markets at these levels so investors will be looking for positive quarterly results and upbeat guidance.

How to Explain the Israel-Hamas Conflict to Clients

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Israel Readies For A Potential Invasion

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Israel Readies For A Potential Invasion: Tom Essaye Quoted in Barron’s

Energy Stocks Gain as Oil Prices Rise

The Middle East is a critical region for crude supply. The ongoing war between Israel and Hamas poses a risk to oil supply, and the escalation does not look likely to ease anytime soon.

“Israel warned more than one million residents to evacuate southern Gaza in the next 24 hours as it readies for a potential invasion and oil is rallying 3% as a result,” Tom Essaye, founder of the Sevens Report, wrote Friday.

Also, click here to view the full Barron’s article published on October 13th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Israel Readies For A Potential Invasion

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.

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.

Why Markets Are Resilient Despite Geopolitical Risks

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Why Markets Are Resilient Despite Geopolitical Risks: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Markets Are Resilient Despite Geopolitical Risks
  • Weekly Market Preview:  Will Powell Signal Rate Hikes Are Over?
  • Weekly Economic Cheat Sheet:  Can Economic Growth Stay Strong?

Futures are slightly higher as the weekend brought no major changes to the current macroeconomic set up.

Geo-politically, an invasion of Gaza by Israel remains imminent but so far the conflict hasn’t expanded regionally and oil is little changed as a result.

Economically, inflation in India declined –0.25% vs. (E) 0.50%, reinforcing that inflation is declining globally.

Today focus will be on the October Empire Manufacturing Survey (E: -5.0) and markets will want to see “Goldilocks” data that largely meets expectations combined with declines in the price indices.  We also get one Fed speaker today, Harker (10:30 a.m. ET & 4:30 p.m. ET), and one notable earnings report, SCHW ($0.75), but barring any major surprises they shouldn’t move markets.

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Market Multiple Levels Chart (October Edition)

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Market Multiple Levels Chart (October Edition): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Levels Chart (October Edition)

Futures are modestly lower following mixed economic data and as the Israel and Hamas war appeared set to escalate.

Economically, E.U. Industrial Production beat while Chinese CPI was flat y/y, increasing deflation concerns.

Israel warned more than one million residents to evacuate southern Gaza in the next 24 hours as it readies for a potential invasion and oil is rallying 3% as a result.

Earnings season starts today and there are several large banks that are reporting results.  In addition to the earnings, markets will want to hear positive commentary on consumer spending on the earnings calls.  Important reports today include:  JPM ($3.89), UNH ($ 6.33), BLK ($8.52), C ($1.26), WFC ($1.25).

Economically, the only notable report today is Consumer Sentiment (E: 67.5) and it would take a spike in inflation expectations for that to move markets.

Market Multiple Table - October Edition

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Market Multiple Table – October Edition

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Market Multiple Table – October Edition: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – October Edition
  • Why Didn’t a Hot PPI Report Weigh on Markets?

Futures are modestly higher on more reports of global disinflation combined with additional Chinese stimulus.

Japanese PPI rose less than expected (2.0% vs. (E) 2.5%). And, that added to the recent list of inflation data points that imply ongoing global disinflation.

China’s sovereign wealth fund bought shares in the nation’s largest banks, boosting Asian markets.

Today the focus will be on the CPI report and expectations are as follows: Headline CPI:  0.3% m/m, 3.6% y/y, Core CPI: 0.3% m/m, 4.1% y/y.  Bottom line, a CPI Report under expectations should pressure yields and fuel a continued rally in stocks while a hot CPI should lift yields and likely weigh on stocks.

Away from the CPI report we also get Jobless Claims (E: 209K) and have multiple Fed speakers: Bostic & Collins.

Market Multiple Table - October Edition

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