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Needed Context for Rising Yields

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What’s in Today’s Report:

  • Needed Context for Rising Yields
  • What Could Push Yields Lower (Four Candidates)

Futures are little changed despite higher oil prices as President Trump threatened an “economic D-Day” for Iran.

President Trump threatened dramatic economic sanctions on countries with economic ties to Iran, increasing odds of a Iranian military response and pushing oil prices higher.

Focus today will be on yields and whether they recoup Wednesday’s losses or not.  Impacting that will be, in order of importance:  Oil prices (do they rise further than the current 2% rally) and economic data (does it come in hot or not?).

Economically, important reports today include Jobless Claims (E: 211K), Philly Fed (E: 25.0) and Leading Indicators (E: 0.1%) and the more “in-line” they are with expectations, the better (especially the Philly price indices).

Outside of economic data, there is one Fed speaker, Musalem (11:10 a.m. ET) and some notable retail earnings:  WMT ($0.73), BABA ($1.94), DE ($4.79), AAP ($0.81), ROST ($1.93).

 

The AI Trade Is Getting Bigger

AI may be one of the defining investment themes of the next decade. But that doesn’t mean today’s AI winners will remain tomorrow’s leaders.

In Tuesday’s issue of Sevens Report Alpha, we examined how investors can maintain meaningful long-term exposure to AI without making a concentrated bet on a handful of stocks. The report looks beyond the current chip and data center boom to the broader AI ecosystem, and how leadership could shift as the technology matures.

Most importantly, we outline three distinct approaches to gaining long-term AI exposure, including the trade-offs in diversification, concentration, flexibility, and cost.

If you believe AI is here to stay, follow the link below to read our most recent Alpha issue and see how I think investors can best participate.

Sevens Report Alpha

 

What Caused Yesterday’s Selloff? AI or Yields?

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What’s in Today’s Report:

  • What Caused Yesterday’s Drop, AI or Yields?
  • Three Reasons Yields Are Rising Right Now

Futures are flat as traders digest this week’s pullback in tech stocks amid stubbornly elevated oil prices and subsequently buoyant bond yields.

Economically, U.K. Core CPI held steady at 2.6% vs. (E) 2.5% y/y while the EU’s Core CPI equivalent (Core HICP) was unchanged at 2.5% y/y in July, meeting estimates; neither release suggested inflation is beginning to slow materially which is keeping yields elevated today.

There are no noteworthy economic reports today, however the Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a 20-Yr Bond auction at 1:00 p.m. ET which could move the bond market, and a pullback in yields would be welcomed by equities today, potentially setting up a relief rally in the broader market.

Later in the afternoon, the July FOMC meeting minutes will be released (2:00 p.m. ET) and traders will be looking for any fresh insight as to the Fed’s most likely policy rate path in H2’26; the more dovish/accommodating, the better for equities.

Finally, there are a handful of late-season earnings releases due to be released today including ADI ($3.33), TGT ($2.30), TJX ($1.18), LOW ($4.22), EL ($0.32), and BULL ($0.03). And as has been the case, the stronger the results and guidance, the better for the market.

 

Tom Essaye On Why Cloud Capacity Is The Next Critical Bottleneck In AI Infrastructure

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Why Google and Amazon rank top among Cloud hyperscalers for AI

Sevens Report Research founder Tom Essaye explains why cloud capacity is the next critical bottleneck in AI infrastructure and ranks Google (GOOG), Amazon (AMZN), and Microsoft (MSFT) based on their cloud revenue opportunities.

So, I do like the hyperscalers, but I like the ones with the best cloud businesses. So really it’s not even so much that I love the hyperscalers, it’s that I love cloud right now because I think the cloud capacity is could be number uh number for first of all, the next bottleneck that has to be resolved in this AI day to build out after semiconductors and memory. And also it it provides an opportunity to generate revenue right now. So if I had to rank them in order, it would probably be Amazon, or excuse me, Google, Amazon and then Microsoft. The reason Microsoft is last is because I do think they have some risk on their office suite given, you know, some of the the AI software purge that we’re seeing. Uh but I think those three are attractive, mainly because of their cloud business, it’s providing revenue now.

Essaye is staying cautious about the Magnificent Seven names heading into earnings. 

Also, click here to view the full video published on Yahoo Finance on August 10th, 2026. 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.

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.

Examining the Most Important Headline This Week (It’ll Surprise You)

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What’s in Today’s Report:

  • Examining the Most Important Headline This Week (It’ll Surprise You)

Futures are slightly higher despite post earnings selling in AI linked tech stocks, as lower oil boosts futures.

CSCO earnings weren’t as good as hoped for and the stock is down 6% pre-market, although it’s not weighing on the rest of the market.

There was no discernable progress on U.S./Iran peace talks but oil dropped 1% overnight on falling fears of escalation.

Today focus will remain on inflation and the economy via PPI  (E: 0.2% m/m, 4.9% y/y) and Jobless Claims (E: 203K).  The lower PPI and the closer jobless claims are to 200k, the better for markets (it’d be a Goldilocks reading). We also have one Fed speaker today, Barkin (8:40 a.m. ET), but he shouldn’t move markets.

On earnings, tech results continue and today’s key report is AMAT ($3.38).

 

Evolution of the AI Trade: ROCs, SOCs and SaaS

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What’s in Today’s Report:

  • Evolution of the AI Trade: ROCs, SOCs and SaaS

Futures are flat and bonds are steady despite a continued rise in oil prices amid ongoing geopolitical tensions between the U.S. and Iran with focus on control of Hormuz.

Economically, the NFIB Small Business Optimism Survey firmed to 97.4 vs. (E) 95.6 in June.

Today is a busy and important day of data, Fed speak and earnings.

The key economic report today is CPI and expectations are as follows: -0.1% m/m, 3.8% y/y, Core CPI (E: 0.2% m/m, 2.9% y/y).  Put simply, an in-line to better than expected number should pressure yields and help stocks while a “hot” number will push the 10-year yield towards a new YTD high (and pressure stocks).

On the Fed front, the key event is Chair Warsh (10:00 a.m. ET) but there are several other speakers including Barr (12:40 p.m. ET), Goolsbee (1:00 p.m. ET), Cook (1:30 p.m. ET) and Bowman (2:55 p.m. ET).  The less concerned they are about inflation, the better (especially Warsh).

Finally, on earnings, the banks kick off the Q2 reporting season and key reports today include: JPM ($5.52), GS ($14.47), BAC ($1.13), C ($2.72), WFC ($1.73).

 

Investors Are No Longer Willing To Pay Up Blindly For The Data Center Boom

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Cheap AI stock valuations raise doubts about data center demand

Tom Essaye argues they may be saying something less comfortable: investors are no longer willing to pay up blindly for the data center boom.

Essaye, founder of Sevens Report Research, said in a Wednesday note that cheaper AI stock valuations could reflect fear that the current wave of data center spending may slow. That matters because growth stocks typically receive richer multiples when investors believe future earnings will justify them. When some of the market’s most visible AI-linked names trade close to, or below, the S&P 500’s forward price-to-earnings ratio of 21.5, the message is not simply that shares are inexpensive. It may be that investors are questioning whether the earnings they once expected will arrive.

Essaye framed the risk through a hypothetical example. “Think of it this way: GOOGL (to use one as an example) cancels building 10 data centers because it’s going to cost too much money and the return isn’t there,” he wrote. “That will result in massive order cancellations at NVDA, MU, AVGO, SNDK, etc., because no one needs the chips, networking, memory, or processor power,” he added.

Also, click here to view the full article on Financial-world.org published on June 21st, 2026. 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.

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.

Tom Essaye Notes That The Sustainability Worries Are Still Valid

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Practically, I don’t think this means anyone needs to reduce tech exposure today, Tom Essaye tells Barron’s.

Tech Stocks Are Cheap? That’s a Problem Too.

Essaye notes that the sustainability worries are still valid, highlighted by Oracle’s recent report.

“Using simple math, it appears that Oracle will have a close to 100% sales/capex ratio in 2027,” writes Essaye. “To keep things simple, that means Oracle will spend all of its revenue on capex, the vast majority of which will go into AI infrastructure. That means that Oracle will almost certainly have negative free cash flow and that is only sustainable for so long, even for a company like Oracle.”

Here is where the dot-com bubble comes back into play, Essaye notes, because the current AI buildout could wind up being similar to the widespread effort to build fiber access to the internet to homes across the country in the late 1990s. That demand turned out to be unsustainable, as connecting people to the internet wasn’t as profitable as initially hoped.

“Practically, I don’t think this means anyone needs to reduce tech exposure today,” Essaye concludes. “But this situation (i.e., are earnings gains sustainable?) is something that needs to be watched, so ensuring one isn’t too overweight tech and has proper balance remains important.”

Also, click here to view the full article published in Barron’s on June 17th, 2026. 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.

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.

U.S./Iran Conflict And AI Continue To Dominate The Market Narrative

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Nasdaq-100 Falls As Investors Rotate From AI To Old Economy

“The U.S./Iran conflict and AI continue to dominate the market narrative, but tomorrow’s jobs report is still very important for markets because the strong labor market is a critical offset for the consumer amidst high inflation,” said Tom Essaye of the Sevens Report. “A ‘too tight’ labor market would risk increasing the chances of Fed rate hikes sooner than expected.”

Also, click here to view the full article published in Financial Advisor Magazine on June 4th, 2026. 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.

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.

Jobs Day

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What’s in Today’s Report:

  • Jobs Day
  • Is AI Friend or Foe to the Labor Market?

Futures are modestly lower mostly on continued tech weakness following AVGO’s disappointing earnings and after a mostly quiet night of news.

Tech stocks are extending Thursday’s post AVGO earnings driven declines and that’s weighing on futures although nothing newly negative occurred overnight.

Economically, the only notable report was Q1 Eurozone GDP which missed estimates (0.3% vs. (E) 0.8%).

Today focus will be on the jobs report and expectations are as follows: 85K Job-Adds, 4.3% Unemployment Rate and 3.4% y/y Wage Growth.  The “best case” scenario is a Goldilocks number with above expectations job adds and unemployment and wages that meet or slightly beat expectations, as that will imply a stable labor market but not one that is putting upside pressure on inflation.

 

Sevens Report: IGV Weakness Raises Tech Market Concerns

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Tom Essaye warns lack of rebound in software ETF is a caution signal

IGV: If this Software ETF Can’t Rally, be Wary of Trading Tech Stocks

Fears that AI could have broader economic consequences weighed on software stocks in Q1, and that pressure remains evident in the iShares Expanded Tech-Software Sector ETF (IGV). The fund has not staged a meaningful rebound and continues to trade only modestly above its 2026 low, observes Tom Essaye, president of the Sevens Report Research.

Geopolitical tensions, including the Iran conflict, recently drove defensive flows into mega-cap tech. While that rotation supported broader indices, IGV did not participate and remains below recent highs.

Fundamentals have not materially deteriorated. AI concerns have not intensified, and recent software earnings were generally stable. However, the absence of upside momentum is notable.

A break below the February low would be a negative technical signal for tech and could weigh on the broader market. Even with potential geopolitical easing, AI uncertainty and private credit risks remain unresolved headwinds.

Also, click here to view the full article on Moneyshow.com published on March 27th, 2026. 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.

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.