Copper Could Recover And Signal A Relief Rally

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Copper Could Recover: Tom Essaye Quoted in Barron’s

Copper Prices Have Tumbled. Is a Global Recession Coming?

That’s why, for copper, “there is key 2023 support between $3.57 and $3.62 [per pound] that will be in focus near term,” wrote Sevens Report’s Tom Essaye. “If it holds, copper could recover and signal a relief rally developing in risk assets more broadly but a violation would be a negative signal for global markets.” 

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 28th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Copper Could Recover

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Stock Futures Waver With Bond Yields

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Encouraging Inflation Data: Tom Essaye Quoted in Barron’s

Stock Futures Waver With Bond Yields, Oil in Focus

U.S. stock futures wavered on Thursday, whipsawing after the release of economic data, though sentiment remained under pressure from a surge in bond yields and the price of oil amid ongoing concerns over interest rates and inflation.

“Encouraging inflation data from Europe was partially offset by ongoing government shutdown and labor strike worries,” said Tom Essaye, the founder of Sevens Report Research.

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 28th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Encouraging Inflation Data

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What the Near Government Shutdown Means for Markets

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What’s in Today’s Report:

  • What the Near Government Shutdown Means for Markets (Higher Yields)
  • ISM Manufacturing Index Takeaways – Better Than Feared

Futures are little changed this morning. More evidence of cooling inflation was offset by global central bankers continuing to threaten more rate hikes.

Economically, Swiss CPI came in at 1.7% vs. (E) 1.8% y/y in September. The Core figure fell to 1.3% from 1.5% previously which was the latest report to confirm the ongoing trend of global disinflation.

The RBA held policy rates steady at 4.10% overnight. But joined the growing chorus of ECB and Fed officials who have reiterated future hikes on the table. Global yields edged higher in early trade which is keeping a lid on equity futures this morning.

Looking into today’s session, we will receive data on Motor Vehicle Sales (E: 15.3 million). But more importantly, jobs week kicks off with today’s JOLTS release which is expected to show 8.9 million job openings.

An inline or modestly lower-than-expected JOLTS headline would be welcomed as it would help dial back some of the recent hawkish money flows. While an unexpected increase could spark a continued rise in yields, adding pressure to equity markets.

Finally, there is a 52-Wk Treasury Bill auction at 11:30 a.m. ET and while we typically do not monitor Bill auctions too closely, stocks came for sale and yields rose right at 11:30 a.m. yesterday. When the results of a 3-Month and 6-Month Bill auction hit the wires with higher yields than previous (hawkish). So if we see weak demand and higher yields in the late morning auction today, that could be a drag on equities and other risk assets.

What the Near Government Shutdown Means for Markets (Higher Yields)

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Seeing the Forest for the Trees in Today’s Market

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What’s in Today’s Report:

  • Seeing the Forest for the Trees in Today’s Market
  • Weekly Market Preview:  Do Expectations for a Soft-Landing Shift This Week?
  • Weekly Economic Cheat Sheet:  An Important Week:  ISM PMIs and the Jobs Report Friday

Futures are little changed as Congress passed a short-term funding bill and avoided a shutdown while global manufacturing data largely met expectations.

The House passed the Senate’s “continuing resolution” to fund the government over the weekend, avoiding a shutdown.  However, funding only lasts until November 17th.

The Chinese Sept. Manufacturing PMI rose to 50.2 vs. (E) 50.0 while EU and UK readings were in-line with estimates.

Today focus will be on economic data and Fed speak.  The key report today is the ISM Manufacturing PMI (E: 47.8) and markets will want to see this number move closer to 50 and hint at an end to the manufacturing recession.  A further drop from here would be an incremental negative.  On the Fed, we hear from Powell & Harker at 11:00 a.m. and Williams at 1:30 p.m. and any hints from them that the Fed is likely done with rate hikes will be welcomed by markets.

Sevens Report Quarterly Letter Delivered Today

Our Q3 ’23 Quarterly Letter will be released today.

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Stock Futures Are Bouncing

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Improvement in Chinese Economic Data: Sevens Report Analysts Quoted in Barron’s

Stock Futures Rebound After Selloff

“Stock futures are bouncing back modestly and bonds are stable this morning amid improvement in Chinese economic data,” said Tom Essaye, the founder of Sevens Report Research.

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 27th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Stock Futures Are Bouncing

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Government Shutdowns Impact

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Government Shutdowns Impact: Tom Essaye Quoted in Forbes

Government Shutdown Would Slow U.S. Economy

Sevens Report’s Tom Essaye wrote to clients last week despite the “ominous” nature of the term, government shutdowns “don’t impact enough people or last long enough to have a lasting macroeconomic impact,”.

Also, click here to view the full Forbes article published on September 27th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Government Shutdowns Impact:

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Sectors To Hide In The Current Market

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Tom Essaye Joins BNN Bloomberg

Healthcare, consumer staples, and utilities are best sectors to hide in current market: Essaye

Tom Essaye, president of Sevens Report Research, shares why Anthropic investment is good for Amazon, tech sector will continue to lead markets, and defensive sectors such as Healthcare, consumer staples, and utilities are sectors to hide in the current market.

Also, click here to watch the full BNN Bloomberg video published on September 26th, 2023. However, to see Tom’s full comments on the current market environment in our daily report sign up here.

sectors to hide in the current market.

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What’s the VIX Saying About This Market?

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What’s in Today’s Report:

  • What’s the VIX Saying About This Market?

Futures are solidly higher as Thursday’s bounce extended overnight following additional reminders that global disinflation is still on going.

The EU Flash HICP (their CPI) rose 4.3% vs. (E) 4.6% and Core HICP increased 4.5% vs. (E) 4.8%, sending an important reminder that disinflation is still on going.

There was no material progress in avoiding a government shutdown overnight (which at this point is likely).

Today focus will be on the Core PCE Price Index (E: 0.2% m/m, 3.9% y/y) and put simply, if that number meets or is below expectations, then this bounce back rally should continue.  If the Core PCE Price Index is higher than expectations, don’t be shocked if stocks give back these early gains.  Finally, there is one Fed speaker today, Williams at 12:45 p.m. ET, but he shouldn’t move markets.

What's the VIX Saying

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Why This Market Is Still All About the Data

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What’s in Today’s Report:

  • Why This Market Is Still All About the Data
  • EIA and Oil Market Analysis (How Far Can the Rally Go?)

Futures are slightly higher as encouraging inflation data from Europe was partially offset by ongoing government shutdown and labor strike worries.

Spanish Core CPI rose 5.8% vs. (E) 6.1% and importantly reminded markets that disinflation was still occurring.

Politically, a government shutdown looks increasingly likely while the UAW again threatened to expand the strike.

Today will be a busy day as there are important economic reports and notable Fed speak to watch.  Economically, the key report is Jobless Claims (E: 211K) and markets need this number to move higher to ease tight labor market concerns.  We also get the final look at Q2 GDP (E: 2.3%) but that shouldn’t move markets.

On the Fed, Powell speaks at 4:00 p.m. ET and while he’s not expected to address policy, there will be Q&A.  Other speakers today include Goolsbee (9:00 a.m. ET), Cook (1:00 p.m.), and Barkin (7:00 p.m.).

Why This Market Is Still All About the Data

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Why Did Stocks Drop Yesterday?

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What’s in Today’s Report:

    • Bottom Line – Why Did Stocks Drop Yesterday?
    • Chart: S&P 500 Tests Key Support
    • Economic Takeaways: Case-Shiller Home Price Index & Consumer Confidence
    • Philadelphia Fed Service PMI Turns Negative, Price Readings Elevated (Stagflation)

    Stock futures are bouncing back modestly and bonds are stable this morning. This is amid improvement in Chinese economic data while data in Europe was less encouraging.

    Economically, Chinese Industrial Profits were down -11.7% y/y in August. But that was up from -15.5% y/y in July suggesting government stimulus efforts may be stabilizing the economy. The property development sector remains a major source of uncertainty.

    Meanwhile, in Europe, Eurozone M3 Money Supply declined more than expected, down -1.3% vs. (E) -1.0%. Which underscores tightening financial conditions in the EU amid aggressive policy measures by the ECB.

    Today, the calendar is fairly light as there is just one economic report to watch this morning: Durable Goods Orders (E: -0.3%) and no Fed officials are scheduled to speak.

    In the afternoon there is a 5-Yr Treasury Note auction at 1:00 p.m.. ET, and as usual, if there is any meaningful move in yields, it could impact equity markets (stable or easing yields would be welcomed by equity bulls, new highs would pressure stocks and other risk assets).

Sevens Report Q3 ’23 Quarterly Letter Coming October 2nd.

The Q3 2023 Quarterly Letter will be delivered to advisor subscribers on Monday, October 2nd.

The S&P 500 just hit the lowest level since March amid concerns about Fed rate hikes, a rebound in inflation and a possible recession.

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Why stocks dropped yesterday

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