Posts

One Potential Catalyst That Could Shake Up Markets

/in , /by

One Potential Catalyst That Could Shake Up Markets: Tom Essaye Quoted in Barron’s

Stocks Begin Holiday-Shortened Trading Week With a Pause

“One potential catalyst that could shake up markets today is the 20-Year Treasury Bond auction at 1:00 p.m. ET as weak results could trigger a rebound in yields, especially given fading attendance this week and subsequently less liquid market conditions across asset classes,” writes Sevens Report Research’s Tom Essaye.

In the absence of major data that could shift the narrative, investors will be watching key earnings reports like Nvidia on Tuesday. Bond yields will also be in focus.

Also, click here to view the full Barron’s article published on November 20th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

One Potential Catalyst

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.

Treasury Yields To Continue To Drive Short-Term Trading

/in , /by

Treasury Yields To Continue To Drive Short-Term Trading: Tom Essaye Quoted in Barron’s

Stocks Extend Rally After Best Week of the Year

“Today there are no notable economic reports and just one Fed speaker, [Lisa] Cook (11:00 a.m. ET), so look for Treasury yields to continue to drive short-term trading,” writes Sevens Report Research’s Tom Essaye.

The 10-year Treasury yield ticked higher on Monday but was still at 4.614%. The 10-year yield was trading around 5% in October, which weighed on rate-sensitive stocks.

“If the 10-year yield continues to decline then the S&P 500 can extend last week’s rally.”

Also, click here to view the full Barron’s article published on November 6th, 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

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.

Important To Watch The S&P 500 Index’s Support Zone

/in , /by

there’s no way The Fed Can Get Dovish: Tom Essaye Quoted in MarketWatch on MSN

Fed day is here. Here are important technical levels to watch for stocks, bonds, and VIX

It is important to watch the S&P500 index’s support zone from 4,050 to 4,170, where the index spent most of April and May, according to Tom Essaye, founder and president of Sevens Report Research. 
On the other hand, “if policy makers deliver a dovish message and signal the hiking cycle is indeed ‘over’ then a relief rally could see stocks rise rapidly back towards the October highs,” according to Essaye.
The first important technical resistance level to watch is 4,225, while beyond that, investors should keep an eye on the level of 4,330, where the index saw a mid-October reversal. For the 2023 stock market rally to resume, the S&P 500 has to beat its October high of 4,377, Essaye wrote. 
“There is growing evidence that the VIX may be forming a near-term top as the ‘fear gauge’ did not close at new October highs last week despite the S&P 500 falling to new multi -month lows,” Essaye wrote.

Also, click here to view the full article published by MSN on November 2nd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Index’s Support Zone

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.

What Would Stop the Bond Market Selloff?

/in , /by

What Would Stop the Bond Market Selloff? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Would Stop the Bond Market Selloff? (Fundamental and Technical Perspectives)
  • October Flash PMI Takeaways – More Goldilocks Data (Chart)

Stock futures are trading lower as investors digest a mixed start to big tech earnings and a moderate rise in yields.

On the earnings front, GOOGL is down 6.75% this morning as cloud revenue missed estimates. While MSFT is up 3.30% amid a broadly positive quarterly earnings report bolstered by positive AI growth metrics.

Today, focus will be on economic data early with New Home Sales (E: 685K). From there focus will turn to the bond markets as there is a 5-Yr Treasury Note Auction at 1:00 p.m. ET that has the potential to move yields and impact equities (any further retreat in yields will be welcomed by investors).

Fed Chair Powell will be speaking after the close (4:35 p.m. ET). That is likely to result in some hesitation in the afternoon as traders position/hedge ahead of his post-close commentary.

Earnings season remains in full swing as well with quarterly results due from BA (-$3.05), TMO ($5.60), and GD ($2.87) this morning. While tech giants META ($3.62) and IBM ($2.12) report after the close.

What Would Stop the Bond Market Selloff?

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. 

The 10-Year Yield Sits at 5.00%

/in , /by

The 10-Year Yield Sits at 5.00%: Tom Essaye Quoted in Barron’s

10-Year Treasury Yield Hovers Around Milestone 5% Level, Adding Pressure to Stocks

“The 10-year yield sits at 5.00% as of this writing. And the higher it goes today, the lower stocks will likely fall,” said Tom Essaye, founder of Sevens Report Research. “Today, any progress on electing a Speaker of the House will be welcomed by the markets and likely push yields lower.”

The recent, dramatic march higher in yields has added significant headwinds for stocks. Because higher returns on risk-free government debt tend to dampen demand for riskier bets, such as equities.

Also, click here to view the full Barron’s article published on October 23rd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

The 10-Year Yield

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.

CPI Preview: Good, Bad, and Ugly

/in , /by

CPI Preview: Good, Bad, and Ugly – Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, & Ugly
  • “Soft Components” of the NFIB Small Business Optimism Index Fall to GFC Lows
  • Chart – Equal-Weighted S&P 500 Index (RSP) Remains in Steep Downtrend, Underscoring Thin Market Breadth

U.S. equity futures are modestly higher this morning despite escalating tensions in the Middle East overnight as investors embrace a continued pullback in global bond yields after steady inflation data in the EU overnight.

Economically, German CPI was unchanged from August, coming in at 4.5% y/y in September, meeting estimates. The inline inflation print is helping bonds continue to stabilize and supporting modest risk-on money flows this morning.

Today, focus will be on economic data early with PPI (E: 0.3% m/m. 1.2% y/y) and Core PPI (E: 0.2% m/m, 2.1% y/y) due out ahead of the bell.

From there focus will turn to the Fed with multiple officials scheduled to speak: Waller, Bostic, Collins. Additionally, the latest FOMC meeting minutes will come at 2:00 p.m. ET.

Bottom line, if PPI is more or less inline with estimates and the FOMC minutes and Fed chatter over the course of the day continue to support the less-hawkish narrative of recent. Then this week’s rally can continue, however and reversal back higher in yields will pressure stocks and other risk assets.

CPI Preview: Good, Bad, & Ugly

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. 

Tomorrow’s Jobs Report

/in , /by

Tomorrow’s jobs report: Tom Essaye Quoted in BNN Bloomberg

Stock Futures Slide as Bond Yields Keep Rising

“Tomorrow’s jobs report may be the most important one of the year,” according to Tom Essaye, a former Merrill Lynch trader.

If the report is too hot and the yield on the U.S. 10-year bond moves close to 5 percent. “We could easily see the S&P 500 fall through the 200-day moving average and at that point we could see an acceleration of the declines in stocks,” Essaye wrote in his The Sevens Report newsletter.

Also, click here to view the full BNN Bloomberg article published on October 5th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Tomorrow’s Jobs Report

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.

Why Are Yields Rising?

/in , /by

Why Are Yields Rising? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Are Yields Rising?
  • What the Removal of Speaker McCarthy Means for Markets (We Didn’t Need This Right Now)
  • JOLTS Data Takeaways
  • OPEC+ (JMMC) Meeting Preview

U.S. stock futures are rebounding from overnight losses as European markets turn positive following mixed economic data while yields are stabilizing after this week’s rapid rise.

Markets are continuing to digest the implications of the removal of McCarthy as Speaker of the House. Yields were initially higher overnight, likely on worries of a more pronounced threat of a government shutdown next month. They have since stabilized and are only little changed in morning trade, helping support steady stock futures in the pre-market.

Economically, the September EU Composite PMI came in at 48.7 vs. (E) 48.4, while Retail Sales fell -1.2% vs. (E) -0.2% in August and PPI fell a steep -11.5% vs. (E) -11.7%. On balance, the data was not a reason for the ECB to become more hawkish. Which is helping global bond markets (and equities) stabilize this morning.

Today, focus will be on economic data early with the ADP Employment Report (E: 150K), ISM Services Index (E: 53.5), and Factory Orders (E: 0.2%). The “hot” JOLTS headline roiled markets yesterday so markets are likely to welcome any cooling labor market indicators and look for easing price measures in the ISM release as those developments could help bonds bounce back and stocks recover some of this week’s losses.

Later, the focus will turn to central bank speak with several Fed officials scheduled to speak including: O’Neill Paese, Schmidt, Bowman, and Goolsbee. A lot of hawkish rhetoric has been digested in recent sessions. So any more dovish-leaning commentary would also be welcomed by stocks and other risk assets.

Why Are Yields Rising

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. 

High Yield Debt Spreads – Sevens Report Co-Editor Quoted

/in , /by

High yield debt spreads: Sevens Report Analysts Quoted in MarketWatch

This credit gauge shows investors still have risk appetite, despite recession fears

“High yield debt spreads are still not showing any degree of concern for either default or economic risk right now, and that supports the case for continued strength in risk assets in the near-to-medium term, despite lingering recession concerns based on the inverted yield curve,” Tyler Richey, co-editor at Sevens Report Research, wrote in a recent note.

Also, click here to view the full MarketWatch article published on September 22nd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

High-yield debt spreads

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.

Why Did Stocks Drop on Friday?

/in , /by

Why Did Stocks Drop on Friday? Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop on Friday?
  • Weekly Market Preview:  Will the Fed Confirm Market Expectations?
  • Weekly Economic Cheat Sheet:  Important Growth Data Throughout the Week (Could Confirm or Undermine Soft/No Landing Hopes)

Futures are slightly higher as markets bounce following Friday’s declines and after a quiet weekend of news.

The various strikes occurring across the country (writers, UAW) contributed to Friday’s market decline. There was little positive progress over the weekend on resolving either work stoppage.

Geopolitically, President Biden’s National Security Advisor met with China’s foreign minister. The meeting is raising hopes the U.S./China relationship could improve.

Today the only notable economic report is the Housing Market Index (E: 50.0) and that shouldn’t move markets as long as it doesn’t provide a major positive or negative surprise. Barring that, we’d expect pre-Fed positioning to generally drive trading today.

Why Did Stocks Drop

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.