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Two Differences In 2024 That Could Be Negative For Equity Markets

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2 Differences In 2024: Sevens Report Analysts Quoted in Investing.com

Sevens Research sees 2 differences in 2024 that could be negative for equity markets

In its latest daily note, Sevens Report Research said there are two important differences for investors to consider in 2024.

“The market has priced in six Fed rate cuts and year-end 2024 fed funds below 4%,” analysts said.

“If we see the 10-year Treasury yield continue to fall to the low 3% or sub 3% range, that’s not going to be a major tailwind for stocks. Because that won’t be forecasting a dovish Fed, it’ll be forecasting slowing growth,” analysts explained. “And those falling yields will then become a harbinger of a potential economic slowdown and not the welcomed signal of a Fed that’s finally turning dovish.”

The second difference is that earnings results won’t have low expectations to excuse poor performance.

“Consensus S&P 500 earnings growth is nearly 10% year over year. Well above the longer-term averages of around 5%-ish annual growth. And keep in mind, at 4,800 the S&P 500 is trading over 19.5X that $245 earnings estimate, which means there’s little room for disappointment from a valuation perspective,” analysts explained. “Bottom line, ‘ok’ earnings won’t be good enough and we got a preview of that in the Q3 numbers.”

Also, click here to view the full Investing.com article published on December 27th, 2023. 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.

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.

Five Optimistic Market Assumptions for 2024

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Five Optimistic Market Assumptions for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Weekly Market Preview – Five Market Assumptions to Know As We Start 2024
  • Weekly Economic Cheat Sheet – Jobs Report in Focus

Futures are moderately lower to start 2024 amid concerns about China’s economy and rising geopolitical tensions.

Economically, China’s government-issued PMI fell to 49.0 vs. (E) 49.6 in December while President Xi Jinping made some cautious comments on the state of the economy over the weekend that has poured cold water on Asian markets to start the year.

In Europe, the December PMI rose to 44.4 vs. (E) 44.2 but still points to a factory sector deep in contraction which reiterates very real recession risks in the Eurozone in 2024.

Geopolitical tensions are pushing oil prices higher to start the new year after the U.S. Navy sunk three Iran-backed Houthi vessels in the Red Sea this weekend.

Looking into today’s session, the Final U.S. December Manufacturing PMI (E: 48.2) will be in focus this morning and traders will want to see stability in the data in order for stocks to start the new year with an extension of the 2023 rally.

Sevens Report Quarterly Letter Delivered Today

Our Q4 ’23 Quarterly Letter will be released today. We use our strength (writing about the markets) to help you:

  1. Save time (an average of 4-6 hours per quarterly letter) and
  2. Show you’re on top of markets with impressive, compelling market analysis.

You can view our Q3 ’23 Quarterly Letter here. To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

Market Assumptions

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.

Stocks Ended Last Week Higher

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Stocks Ended Last Week Higher: Sevens Report Analysts Quoted in Investing.com

‘Last week’s price action is important for 2024,’ says Sevens Report

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

According to Sevens Report Research, last week’s price action is important for 2024, noting the increased volatility.

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

“Last Wednesday’s volatility does bring up two issues we need to watch: 1) Earnings disappointment and 2) The total lack of a ‘Wall of Worry,'” they added. While they are not bearish to start 2024 and believe the underlying fundamentals of the market are “still clearly positive.” the firm thinks investors are too complacent with this market as we begin the new year.

Also, click here to view the full Investing.com article published on December 28th, 2023. 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.

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.

Thoughts for 2024

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Thoughts for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Thoughts for 2024 (The Benefit of Staying in the Middle)

Futures are flat following a quiet night of news as investors look ahead to the looming three day weekend.

Economically, there were two Japanese economic reports, both of which best estimates.  Japanese Industrial Production fell less than expected (-0.9% vs. (E) -1.7%) while Retail Sales rose more than expected (1.0% vs. 0.1%).

Geo-politically, there was no new news overnight, but tensions remain elevated in the Mid-East.

With the long weekend looming we should expect another quiet trading day although there are two notable economic reports today:  Jobless Claims (E: 210k) and Pending Home Sales (E: 0.8%).  However, given the calendar, it’d take substantial negative surprises from either metric to materially move markets and that’s very unlikely.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q3 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

Two Important Differences in 2024

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Why Last Week’s Price Action is Important for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Two Important Differences in 2024

Futures are little changed following a generally quiet night of news as there was no notable economic data or significant market moving events.

Chinese industrial profits rose 29.5% in November, accelerating substantially from the 2.7% gain in October and offering some anecdotal optimism about future growth.

Geo-political tensions remained elevated in the Mid-East following increased attacks on U.S. troops in the region, but no specific escalation occurred overnight.

Today the most notable event is a five-year Treasury bond auction and markets will want to see strong demand (like we saw at yesterday’s two-year auction) to keep rates drifting lower and dovish Fed/lower rates momentum in place through year-end.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q3 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.