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Market Impact of the Assassination Attempt on Former President Trump

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Market Impact of the Assassination Attempt on Former President Trump: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Impact of the Assassination Attempt on Former President Trump
  • Acknowledging There’s a Downside to Current Market Events, Too
  • Weekly Market Preview:  Do Growth and Earnings Hold Up?
  • Weekly Economic Cheat Sheet:  An Important Check on the Consumer This Week

Futures are moderately higher as markets further price in an expected Trump win and Republican sweep following the assignation attempt on the former President.

Former President Trump survived an assignation attempt over the weekend and while expectations of a Trump win in November are boosting futures this morning, the event is unlikely to sustainably impact markets.

Today focus will be on economic data and Fed speak as Powell speaks at noon while we also get the first look at July economic data via the Empire Manufacturing PMI (-5.50).  If Powell is dovish and the data is solid, expect this early rally to continue.

Turning to earnings, this will be a busy week of results but it starts relatively slowly and the only two notable reports today are GS ($8.52) and BLK ($9.96).

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July MMT Chart and Powell Testimony Takeaways

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July MMT Chart and Powell Testimony Takeaways: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Powell Testimony Takeaways – Underappreciated Growth Risks
  • July MMT Chart – All Scenario Targets Hit New Highs

Futures are higher again this morning amid firming Fed rate cut bets after Powell’s first day of semiannual testimony on Capitol Hill while inflation data was mixed overnight.

Economically, inflation data in Asia was mixed as Chinese CPI fell to 0.2% vs. (E) 0.4% y/y but Japanese PPI rose from an upwardly revised 2.6% in May to 2.9% in June.

There are no notable economic reports in the U.S. today which will leave markets primarily focused on Fed Chair Powell’s second day of Congressional testimony, this time before the House Financial Services Committee.

There are two additional Fed speakers this afternoon, Goolsbee and Bowman at 2:30 p.m. ET while Cook speaks later this evening, well after the close (7:30 p.m. ET).

Finally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. Yesterday’s 3-Yr Note auction saw solid demand, however there is some uncertainty about demand for longer duration Treasuries right now, and weak results at today’s auction could send those yields higher which has the potential to trigger some profit taking in equities.

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Market Multiple Table: An Important Change

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Market Multiple Table: An Important Change: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table: An Important Change

Stock futures are trading higher this morning with tech stocks continuing to outperform as traders look ahead to Fed Chair Powell’s Congressional testimony today.

Economically, the NFIB Small Business Optimism Index rose 1 point to 91.5 vs. (E) 90.3 in June.

There are no additional economic reports today which will leave trader focus on Fed Chair Powell’s semi-annual testimony before Congress beginning at 10:00 a.m. ET. There are two additional Fed speakers as well today: Barr (9:15 a.m. ET) and Bowman (1:30 p.m. ET).

The only other potential catalyst on the calendar is a 3-Yr Treasury Note auction at 1:00 p.m. ET. Weak demand and subsequently rising yields after the auction could weigh on stocks as money flows have been very dovish in recent weeks.

Sevens Report Quarterly Letter

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The Economy: Landing or Crashing?

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The Economy: Landing or Crashing? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Economy:  Landing or Crashing?
  • Weekly Market Preview:  Will A September Rate Cut Become a Guarantee This Week?
  • Weekly Economic Data:  Inflation Back in Focus (CPI This Week)

Futures are little changed despite positive geo-political news over the weekend.

In France, the “far-right” National Rally party underperformed expectations and will not be the majority party, reducing the chances of radical French policy changes.

In the Middle East, chatter surrounding a cease-fire between Israel and Hamas continues to get louder and a deal could be announced soon.  That news is weighing on oil this morning.

This week will be an important one with two days of Powell testimony, the CPI report and the start of the Q2 earnings season, but today will be relatively quiet as there are no economic reports today and no Fed speakers.

Sevens Report Quarterly Letter

Our Q2 ’24 Quarterly Letter was delivered to subscribers last Monday, complete with compliance backup and citations. We’re already receiving feedback about how it is saving advisors time and helping them communicate with their clients in this volatile environment!

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Jobs Day

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Jobs Day: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Day
  • Why Wednesday’s Weak Economic Data Is Increasing Growth Concerns

Futures are little changed following the U.S. holiday as the last 24 didn’t provide any substantial market surprises while focus turns towards today’s jobs report.

The Labour Party won a landslide election victory in the UK, as expected, but that victory isn’t altering the outlook for growth or inflation (so it’s not impacting markets).

U.S. growth worries are creeping slightly higher following Wednesday’s surprisingly soft economic data.

Today focus will be on the jobs report and expectations are as follows: 189K Job-Adds, 4.0% Unemployment Rate, 0.3% m/m & 3.9% y/y Wage Growth.  Markets are still in a “bad is good” mode for data so the biggest risk to markets today is for a “Too Hot” number.  But, that said, Wednesday’s economic data was outright bad and for those paying attention, there are now a lot of signs that the U.S. economy may be losing more momentum than expected.  So, if there is a surprisingly weak jobs report (possible but unlikely) it will increase growth concerns and that’s a future risk to this rally.

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French Election Takeaways

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French Election Takeaways: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • French Election Takeaways
  • ISM Manufacturing PMI – The Latest Goldilocks Report
  • Chart: S&P 500 Adjusted for Inflation

U.S. equity futures are tracking European markets lower this morning as ECB President Lagarde pushed back on the idea of another summer rate cut amid resilient labor market data and another stubbornly high inflation reading.

Economically, Eurozone Unemployment held steady at 6.4% vs. (E) 6.5% while the June Core HICP Flash (CPI equivalent) was also unchanged at 2.9% vs. (E) 2.8%.

Looking ahead to today’s session, there are two economic reports to watch: JOLTS (E: 7.9 million) and Motor Vehicle Sales (E: 15.9 million). Investors will be looking for a “cool” but not too-soft JOLTS headline to help reinforce expectations for a September Fed rate cut.

Beyond the economic data, market focus will be on Fed speak this morning as Powell is scheduled to speak at 9:30 a.m. ET. A dovish tone from the Fed chair would be well received and likely influence risk-on money flows while any hawkish surprises have the potential to spark volatility and profit taking in equities.

Sevens Report Quarterly Letter Delivered Yesterday!

Our Q2 ’24 Quarterly Letter was released yesterday.

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Strong demand (lower yields) will reaffirm the dovish shift in Fed policy

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Strong demand will reaffirm the dovish shift in Fed policy: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stocks Open Mixed. Tech Is Bouncing Back.

“Strong demand (lower yields) will reaffirm the dovish shift in Fed policy expectations this month while weak demand (rising yields) could rekindle higher-for-longer policy rate worries and spark risk-off money flows,” writes Sevens Report Research’s Tom Essaye.

Also, click here to view the full Barron’s article published on June 24th, 2024. 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 RallyIf 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.

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Is Q2 Sector Performance Warning About Growth?

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Is Q2 Sector Performance Warning About Growth? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is the Second Quarter Market Performance Warning About Economic Growth?
  • Trading Color – NVDA Declines Mask Broad Market Gains to Start the Week
  • Chart – Equal Weigh S&P 500 Unchanged From Early March

Futures are modestly higher this morning as mega-cap tech recovers some of yesterday’s losses in the pre-market with NVDA up over 3% amid an otherwise quiet night of news.

There were no notable economic reports or market moving catalysts overnight.

Today, investor focus will be on a combination of economic data, Fed speak, and a key Treasury auction

Economically, we will get Case-Shiller Home Price Index (E: 7.0%), the FHFA House Price Index (E: 6.7%), and Consumer Confidence (E: 100.0) releases this morning and there are two Fed speakers: Bowman (7:00 a.m. & 2:15 p.m. ET), Cook (12:00 p.m. ET).

In the afternoon, traders will await the results of a 2-Yr Treasury Note auction at 1:00 p.m. ET. Strong demand (lower yields) will reaffirm the dovish shift in Fed policy expectations this month while weak demand (rising yields) could rekindle higher-for-longer policy rate worries and spark risk-off money flows.

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Summer’s Finally Here – Investing in the Kids

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Summer’s Finally Here – Investing in the Kids: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Summer’s Finally Here – Investing in the Kids
  • EIA Analysis and Oil Market Update

Futures are modestly lower as global economic data missed estimates and further pointed towards a slowing of growth.

The Euro Zone flash PMI dropped to 50.8 vs. (E) 52.4 and UK Flash PMI fell to 51.7 vs. (E) 53.3 and those soft readings are increasing global growth concerns and that’s weighing on futures.

Economic data will again be in focus today and, by far, the most important report is the June Flash Composite PMI (E: 51.6) and given the softness in economic data this week, the stronger this number, the better.

Other notable economic reports today include Existing Home Sales (E: 4.10 million) and Leading Indicators (E: -0.3%) but it’ll take big surprises for them to move markets.

Finally, today is a “Quadruple Witching” options expiration so there may be higher than normal volumes and greater than normal volatility into the close.

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The Fed outlook is essentially known at this point

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The Fed outlook is essentially known at this point: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stock Market Is In a Holding Pattern as Fed Officials Speak

“The Fed outlook is essentially known at this point,” Sevens Report Research’s Tom Essaye tells Barron’s.

He says that whether a first rate cut comes in September or December, it won’t matter too much.

“Maybe it causes a percent or two of volatility, but I don’t think it’s a substantial issue anymore,” Essaye says. “We know we’re getting something in September or December. I think the bigger question is, what’s growth look like when we get it.”

That’s why markets may hope for upbeat economic data in the months ahead, as signs of a slowing for the economy could have a more substantial impact on stocks than a brief delay for rate cuts.

“In the grand scheme of things, 25 basis points in September versus December, that’s not going to stop a slowdown if it’s occurring,” he says. “If somebody came out and said, ‘We’re thinking about not cutting rates at all,’ that would move markets. But I don’t think there’s any chance of that happening.”

Also, click here to view the full Barron’s article published on June 19th, 2024. 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 RallyIf 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.

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