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Separating Short Term vs. Longer Term in this Market

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Separating Short Term vs. Longer Term: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Separating Short Term vs. Longer Term in this Market
  • Important Context for Economic Data Going Forward
  • Weekly Market Preview:  How Much Higher Can Markets Rally in 2023?
  • Weekly Economic Cheat Sheet:  Does Data Start to Roll Over?

Futures are modestly lower following a generally quiet weekend as markets further digested last week’s stock and bond rally.

On inflation, Swiss CPI rose less than expected (1.4% y/y vs. (E) 1.7%) continuing last week’s trend of smaller than expected increases in inflation in the EU region.

On growth, German exports underwhelmed (-0.2% vs. (E) 1.1%) continuing the recent trend of both lower inflation and slowing growth.

Today the only notable economic report is Factory Orders (E: -2.6%) and it’d take a major beat or miss to move markets, so we should expect continued general digestion of last week’s rally.

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Separating Short Term vs. Longer Term in this Market

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Trading Today Will be Dominated by Politics, Geopolitics, and Yields

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Trading Today Will be Dominated by Politics, Geopolitics, and Yields: Tom Essaye Quoted in Barron’s

Stocks Continue Falling Following Powell Remarks

The 10-year Treasury yield ticked lower to 4.949% after threatening to hit 5% for the first time since 2007.

Sevens Reports Research’s Tom Essaye notes that although two Federal Reserve officials are set to speak publicly today. He doesn’t expect either to move markets following Powell’s comments on Thursday.

“So, trading today will be dominated by politics, geopolitics, and yields,” he writes. “Any progress on finding a Speaker of the House will be welcomed by markets (regardless of whether it’s Jordan, McHenry or anyone else), and calming of tensions in the Middle East will similarly be welcomed by markets as would a decline in the 10-year yield. Meanwhile, the opposite of any of those will likely add more headwinds to stocks.”

Also, click here to view the full Barron’s article published on October 21st, 2023. 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 Rally

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Tom Essaye Quoted in Blockworks on April 20th, 2023

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Bitcoin, Ether Hover Below Key Levels While Volatility Dips

“The VIX is trading at the lowest levels since the S&P 500 hit its standing all-time high in the early days of 2022,” Tom Essaye, founder of Sevens Report Research, said. “It will be hard to believe the market is poised to casually cruise towards new record highs from here,” he added. “I.e., the bottom of the bear market is not in.” Click here to read the full article.

Tom Essaye Quoted in Blockworks on January 30th, 2023

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Fed Watch: Bitcoin Gives Up Weekend Gains, Analysts Say Not To Worry

“Reaching peak hawkishness is one of our three keys to a bottom, and the most important one, so if the Fed has reached peak hawkishness that’s a powerful positive to consider,” Tom Essaye, founder of Sevens Report Research, wrote in a note Monday. Click here to read the full article.

Tom Essaye Quoted in Blockworks on December 9th, 2022

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Volatility Index Paints a Gloomy Picture for Bitcoin, Equities

“We remain in a liquidation phase of the market cycle during which more sophisticated, institutional investors are selling their long-term equity holdings,” Tom Essaye, founder of Sevens Report Research said. Click here to read the full article.

Tom Essaye Quoted in Barron’s on August 20th, 2022

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Bitcoin and Stocks Are Falling Together Again. What’s to Blame.

Bitcoin’s moves definitely follow the market. There’s no question, and that’s been especially true on days when the market has been down a lot, Tom Essaye, founder of Sevens Report Research, told Barron’s. Click here to read the full article.

 

Technical Update: What Would Make This Bounce Sustainable?

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What’s in Today’s Report:

  • Technical Update:  What Would Make This Bounce Sustainable?
  • EIA Analysis and Oil Update

Futures are slightly lower following a busy night of mixed earnings reports and ahead of today’s ECB decision.

Politically, Italian PM Draghi formally resigned and there will be elections in Italy this fall, which is adding to general macro-economic uncertainty.

Earnings overnight were mixed although TSLA posted solid results and the stock rallied 3% after hours.

Today will be a busy day for economic data and earnings and the key event is the ECB Decision.  A 25 bps hike is expected although a 50 bps hike is very possible.  From a stock standpoint, markets will be hoping for a 50 bps hike because that will boost the euro and weigh on the dollar (the dollar being this high is a problem for U.S. corporate earnings).  Outside of the ECB we also get Jobless Claims (E: 240K) and Philadelphia Fed (E: -3.3).

On the earnings front, results continue to roll in and so far this season they are decidedly mixed (not good, but not materially worse than feared, either).  Some results we’re watching today include:  T ($0.59), FCX ($0.80), UNP ($2.38), COF ($5.09).

Tom Essaye Quoted in Bloomberg Quint on February 24, 2022

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Bitcoin’s Digital Gold Luster Fades as Customary Havens Win Out

Bitcoin is much more of a momentum and risk-driven asset than it is the independent store of value that people want it to become, it’s not there yet…said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.

Tom Essay Quoted in UK News Today on September 20, 2021

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Crypto Markets Suddenly Lose $250 Billion In Value As Evergrande Turmoil Pummels Bitcoin, Ethereum And Other Major Cryptocurrencies

The losses quickly spread to broader markets as experts started warning its default could…market analyst Tom Essaye, author of the Sevens Report, wrote in a note last week. Click here to read the full article.

Tom Essaye Quoted in The Coin Republic on June 17, 2021

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Investors bullish despite Bitcoins Volatility: Survey

The Sevens Report Research founder Tom Essaye said that Bitcoin needs to have more widespread legitimate adoption for… Click here to read the full article.