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It’s Different This Time…Until It’s Not (Like 2000 and 2007)

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It’s Different This Time… Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • It’s Different This Time… Until It’s Not (Like ’00 and ’07)
  • Chart – Visualizing Where We Are in the Market Cycle

Stock futures are trading with a slight bias to the downside as inflation data overseas showed an uptick in price pressures ahead of the latest Fed minutes release today.

Economically, Hong Kong CPI rose to 2.7% vs. (E) 2.1% in October marking the first “warm” inflation print in months. There were several one-off factors influencing the increase in price pressures but the “hot print” was a reminder that the global inflation fight is not officially over just yet.

Looking into today’s session, there is one economic report to watch: Existing Home Sales (E: 3.91 million) and if it comes in strong, that could weigh on Treasuries (yields higher) and in turn pour some cold water on stocks.

There is another Treasury auction today at 1:00 p.m. ET, but this one is for 10-Yr TIPS and will likely receive less attention than yesterday’s 20-Yr Bond auction, limiting its market impact.

From there focus will turn to the release of the minutes from the November FOMC meeting at 2:00 p.m. ET. Any language that is more hawkish than the currently very dovish shift in policy expectations could also trigger a pullback in equities in thinning holiday week trading today.

Finally, although earnings season is effectively over, there is one notable release today as NVDA ($3.18), one of the “Magnificent Seven” mega-cap tech stocks that have led the market higher in 2023, will report results after the close.

It's Different This Time... Until It's Not (Like 2000 and 2007)

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Dow Theory Update: Bullish Reversal in July

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What’s in Today’s Report:

  • Dow Theory Update – Bullish Reversal in July
  • Central Bank Decision Expectations: Fed, ECB, and BOE this Week

Futures are modestly lower as traders digest mixed mega-cap tech earnings and look ahead to today’s Fed decision.

On the earnings front, GOOGL is up 8%+ in premarket trade thanks to strong reported revenue growth while MSFT is down 3.5% on soft sales and weaker guidance specifically in the company’s cloud computing division.

Today, there is one economic report to watch: New Home Sales (E: 727K) before focus will turn to the Fed with the FOMC Meeting Announcement at 2:00 p.m. ET (E: +25 bp hike) and Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

A busy week of earnings will also continue with T ($0.60), BA (-$0.99), and KO ($0.72) releasing quarterly results before the bell while META ($2.87) and STX (-$0.26) will report after the close.

What Russian Political Turmoil Means for Markets

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What’s in Today’s Report:

  • What Russian Political Turmoil Means for Markets
  • More Signs the Market is Starting to Believe the Fed
  • Weekly Economic Cheat Sheet:  Core PCE Price Index and Jobless Claims are the Key Reports this Week
  • Weekly Market Preview:  Will Hard Landing Fears Keep Rising?

Futures are slightly lower as markets digest the political volatility in Russia and underwhelming economic data.

A short-lived rebellion by the Wagner private army against the Russian government dominated headlines this weekend, but from a market standpoint this only matters via its impact on oil prices, and they are little changed.

Economically, German IFO Business Expectations fell to 83.6 vs. (E) 88.0, which is the second weak German economic number in the past two trading days.

Today focus will remain on the Russian political situation, so watch oil to cut through the headline noise.  If oil rises sharply, the situation is deteriorating and that would weigh on markets.

Tom Essaye Quoted in Forbes on April 1, 2022

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This Recession Indicator Is Flashing Warning Signs As Fed, War And Oil Threaten Economic Recovery

Instead, it’s a signal that the bull market’s time is now limited… said market analyst Tom Essaye of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in CNBC on March 23, 2021

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“This is the first bull market that any of us have been through where it’s been essentially manufactured by the government and by the Fed,” said Tom Essaye, founder of Sevens Report. Click here to read the full article.

Tom Essaye Quoted in U.S. News on April 5, 2019

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7 Things Need to Happen For Stocks to Move Higher

Tom Essaye, founder of Sevens Report Research, recently compiled this list of seven things that need to happen for the market to make it back to new highs this year. Click here to read the full article.

Tom Essaye Quoted in CNBC on March 15, 2019

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“One of the unique parts about the decade-long bull market is that it’s been driven by a couple different things in its life,…” Click here to read the full article.

Earnings Season Preview (Market or Break for the Bull Market)

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What’s in Today’s Report:

  • Earnings Season Preview:  Two Important Factors

Futures are slightly lower despite generally good news overnight, as markets continue to digest the recent rally.

The U.S. & China announced the next round of trade talks will occur Jan 30/31 in Washington, which is a mild positive (although it was largely expected and mostly priced in).

Economically, data was mixed Japanese Household Spending rose 1.1% vs. (E) 0.2%, while UK Industrial Production dropped –0.3% vs. (E) 0.4%.

Today is all about the CPI  report (E: -0.1% m/m, 1.9% y/y).  Both the headline and core need to stay around 2.0% yoy for this “dovish” Fed narrative to continue to grow, as a hot CPI report could undo some of the rally markets have enjoyed since last Friday.