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Are Credit Spreads Confirming Growth Worries?

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What’s in Today’s Report:

  • Are Credit Spreads Confirming Growth Worries?

Futures are bouncing modestly after Thursday’s declines and following better than expected EU inflation data.

Regional German, French and Italian inflation metrics were better than expected, reinforcing expectations for a rate cut from the ECB next week.

On tariffs, there was no new news overnight, but Trump will likely speak with reporters again during/following his meeting with Zelensky later today.

Today focus will be on the Core PCE Price Index (E: 0.3% m/m, 2.6% y/y) and put simply, this number needs to come in at or under expectations to ease inflation anxiety and help support stocks.

On the trade front, Trump will be signing a minerals deal with Ukrainian President Zelensky this morning and while there’s nothing specific about trade on the agenda, it’s possible Trump talks about tariffs, which obviously could move markets.

Finally, we have one Fed speaker today, Barkin at 8:30 a.m. ET.

Four Reasons Investors Are Worried About Washington

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What’s in Today’s Report:

  • Why Are Investors Worried About Washington? (Four Reasons)
  • Chart: Chicago Fed National Activity Index Adds to Growth Fears

Futures are slightly lower as most global markets declined overnight, led by Asian tech stocks, after President Trump reiterated tariff plans for Canada and Mexico and revealed new plans limiting China’s semiconductor industry.

Today, there are two housing market reports to watch: Case-Shiller Home Price Index (E: 4.3%), FHFA House Price Index (E: 0.2%), before the more important economic release of the day, Consumer Confidence (E: 103.0) is due to be released shortly after the opening bell.

Following a string of weak economic reports in recent days, the market will be looking for some more upbeat and stable growth and consumer confidence figures today to help equities stabilize.

Additionally, there is one Fed speaker in the early afternoon: Barkin (1:00 p.m. ET) and a 5-Yr Treasury Note auction at 1:00 p.m. ET, both of which have the potential to move bond yields and impact equity market trading.

Finally, earnings season continues with a few notable companies reporting today including: HD ($3.04), KDP ($0.57), AMC ($-0.16), AXON ($1.41), and INTU ($2.58).

Hard Landing/Soft Landing Scoreboard

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard
  • Empire State Manufacturing Survey Takeaways

Futures are modestly lower as investors digest fresh tariff threats from President Trump and more “hot” inflation data out of Europe, both of which are driving global bond yields higher.

Economically, China’s House Price Index fell -5.0% in January rekindling concerns about the nation’s housing sector while UK CPI was 3.0% vs. (E) 2.8%, up from 2.5% in December, stoking inflation fears and adding upward pressure to bond yields.

Today, there is one economic report to watch: Housing Starts (1.397M) before the January FOMC Meeting Minutes will come into focus in the afternoon (2:00 p.m. ET).

There is also one Fed speaker but not until after the close: Jefferson (5:00 p.m. ET) while we will get a few noteworthy (but not likely market-moving) earnings releases from ETSY ($0.95), CVNA ($0.32), and TOST ($0.06).

Tom Essaye Interviewed On Schwab Network

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Tom Essaye Interviewed On Schwab Network

Why ‘The People are the Product’ for RDDT and TTD A.I. Usage

Ahead of Reddit (RDDT) earnings, shares are trading off of all-time highs. “These platforms live and die based off the usage” of its subscribers, says Tom Essaye. He adds that he likes the company’s business structure, believing the company will only become more valuable. For The Trade Desk (TTD) he says the AI story will be one to watch. Tom believes the AI technology has to make its ads more effective, targeted and valuable.

Also, click here to view the full interview with Schwab Network published on February 12th, 2025. 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.

Market Multiple Table: February Update

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Market Multiple Table: February Update: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table (February Update)
  • NY Fed Inflation Expectations

Stock futures are lower and yields are higher after President Trump officially announced 25% tariffs on steel and aluminum imports late yesterday, reigniting global trade war worries.

Economically, the NFIB Small Business Optimism Index fell to 102.8 in January from December’s multi-year highs of 105.1. The headline missed estimates of 104.7 and underscored fading post-election optimism among business owners.

There are no other economic reports today, however there is a 3-Yr Treasury Note auction at 1:00 p.m. ET. Soft demand, and subsequently higher yields could further pressure equities this afternoon with tomorrow’s CPI report in focus.

Additionally, market focus will be on Capitol Hill today as Fed Chair Powell is set to begin his semi-annual Congressional Testimony at 10:00 a.m. ET. We will also hear from the Fed’s Hammack (8:30 a.m. ET) and Williams (3:30 p.m. ET) today. A dovish tone, and further confidence in a soft economic landing will be favorable for equity markets today.

Finally, earnings season continues today with reports from SHOP ($0.43) and KO ($0.51) before the bell and SMCI ($0.54) after the close.

Join thousands 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.

This market needs Goldilocks data to continue to hold up

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This market needs Goldilocks data to continue to hold up: Sevens Report Analysts Quoted in Investing.com

Sevens Report jobs preview: The ‘market needs Goldilocks data’

In the latest Sevens Report, analysts highlighted the importance of Friday’s jobs report, stating that “if it’s Goldilocks, it’s going to help support the market amidst all this tariff and policy noise.”

However, if the report is either too strong or too weak, it could introduce further volatility and pressure on stocks.

Sevens Report emphasizes that for markets to remain stable, “this market needs Goldilocks data to continue to hold up.”

Also, click here to view the full article published on February 6th, 2025. 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.

This accelerated approach has generated 3.5% annualized alpha

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This accelerated approach has generated 3.5% annualized alpha: Sevens Report Analysts Quoted in Investing.com

Analyst explains 2 sector rotation strategies with proven outperformance

According to Sevens, this accelerated approach has generated 3.5% annualized alpha versus the S&P 500.

The second strategy called the Cheapskate Sector Strategy, involves buying the sector with the lowest price-to-earnings ratio from the previous year.

Sevens notes that the contrarian approach, while more psychologically challenging, has historically paid off, delivering an annualized return of 12.6% over 34 years. It has outperformed the S&P 500 in 20 of those years, with a 59% win rate. For 2025, Energy is the cheapest sector in the S&P 500 based on trailing P/E.

Sevens Report notes that while these strategies don’t work every year, their long-term success rates exceed those of most active managers.

Also, click here to view the full article published on January 31st, 2025. 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.

Two Sector Rotation Strategies With Proven Outperformance

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Two Sector Rotation Strategies With Proven Outperformance: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Two Sector Rotation Strategies With Proven Outperformance
  • Dueling Political Influences on Oil Prices

Futures are modestly higher on more solid tech earnings and as markets are in a “show me” mode on tariff threats.

Apple (AAPL) beat earnings overnight and the stock is up 3% pre-market and that’s helping push futures higher.

On tariffs, markets remain skeptical tariffs will be implemented against Canada and Mexico tomorrow and if they are, they’ll be largely ineffectual.

Today focus will be squarely on the Core PCE Price Index (E: 0.2% m/m, 2.6% y/y).  This is the Fed’s favorite measure of inflation and markets will want to see an in-line to weaker number to keep rate cut expectations intact.  If this number is above expectations, however, look for yields to jump and for that to likely hit stocks.

In addition to the core PCE Price Index we do have one Fed speaker today (Bowman at 8:30 a.m. ET) and some more notable earnings (XOM ($1.58), ABBV ($2.13), CL ($0.89)) but they’re unlikely to move markets.

Join thousands 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.

FOMC Preview (Good, Bad, and Ugly Scenarios)

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FOMC Preview (Good, Bad, and Ugly Scenarios): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview – What’s Expected, Hawkish-If, Dovish-If Scenarios
  • December Durable Goods Orders Takeaways (Goldilocks)
  • NVDA Chart – An Ominous Technical Setup

Stock futures are slightly higher ahead of today’s Fed decision as global bond markets remain steady on the back of some favorable inflation metrics overnight.

Economically, Australian CPI fell from 2.8% to 2.4% vs. (E) 2.6% in Q4’24 and Eurozone M3 Money Supply rose 3.5% Y/Y vs. (E) 4.0%, both of which helped ease inflation fears.

There are no economic reports today leaving market focus on the FOMC Decision (2:00 p.m. ET) and Powell’s Press Conference (2:30 p.m. ET). As today’s Fed preview details, a hawkish outcome that sends yields higher could cause a painful selloff in equities.

Today is also the first day of big tech earnings with TSLA ($0.75), META ($6.90), MSFT ($3.12), and IBM ($3.74) all due to report quarterly results after the close. Expectations are already optimistic for 2025 so any disappointment could pressure stocks in after-hours trading regardless of the initial reaction to the Fed announcement.

Join thousands 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.

Were Tariff Fears Exaggerated? (No. Two Reasons Why)

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Were Tariff Fears Exaggerated? (No. Two Reasons Why): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Were Tariff Fears Exaggerated? (No. Two Reasons Why)

Futures are slightly lower following a major central bank rate hike and despite better-than-expected economic data.

The Bank of Japan raised interest rates 25 bps, as expected, and signaled further rate hikes are coming (also as expected).

Economically, Euro Zone and UK Manufacturing PMIs slightly beat estimates but both remained in contraction territory.

Today we get the most important economic reports of the week via the January Flash Manufacturing PMI (E: 48.9) and Flash Services PMI (E: 56.7) and again, markets will want to see in-line to slightly soft data.  Stronger than expected readings would likely boost yields and pressure stocks.  Other economic reports today include Existing Home Sales (E: 4.16 million) and Consumer Sentiment (E: 73.2).

Turning to earnings, the key report I’m watching today is AXP ($3.03) as that will give us insight into consumer spending and the stronger the report, the better.

Join thousands 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.