Posts

What the Fed Decision Means for Markets

/in , /by

What’s in Today’s Report:

  • What the Fed Decision Means for Markets

Futures are moderately higher on more trade optimism.

President Trump posted on social media that he would announce a new trade deal this morning (likely with the UK) and this is driving optimism for more tariff relief.

Economically, the only notable report was German Industrial Production, which beat estimates (3.0% vs. (E) 2.7%).

Today focus will remain on economic data and specifically Jobless Claims (E: 232K), as investors will want to see claims decline from last week’s spike.  If claims continue to rise, that will increase economic anxiety (and likely pressure stocks).  Other economic events today include a BOE Rate Decision (E: 25 bps cut) and U.S. Unit Labor Costs (E: 5.2%), which are an important measure of inflation (and again, the lower this number, the better).

On earnings, the season is virtually over but there are a few notable reports today:  SHOP ($0.17), COP ($2.06),  COIN ($2.04), MELI ($7.67), AFRM ($-0.08).

Can the Rally Keep Going?

/in , /by

What’s in Today’s Report:

  • Can the Rally Keep Going?
  • Weekly Market Preview: Does the Fed Signal a June Rate Cut?  (And What Does Trump Do If Not?)
  • Weekly Economic Cheat Sheet:  More Signs of Slowing Growth?

Futures are moderately lower on digestion of Friday’s rally and following more tariff threats from President Trump.

President Trump threatened 100% tariffs on movies made outside the U.S., reminding investors that tariff risks remain elevated.

Oil prices are down 1% after OPEC+ increased output by 411k bbls/day starting in July (Saudi Arabia is trying to increase market share and that’s driving oil prices lower).

Today focus will be on the ISM Services PMI (E: 50.2) and if that number drops solidly below 50, we will see economic anxiety rise (the stronger this number, the better).

Earnings season is practically over but there are still some notable reports to watch, including: ON ($0.51) and PLTR ($0.08).

Is Silver Set to Breakout?

/in , /by

What’s in Today’s Report:

  • Is Silver Set to Breakout?

Futures are modestly weaker on digestion of this week’s rally and on mildly disappointing trade news.

Chinese officials stated there were no ongoing trade talks with the U.S. and again called for the removal of tariffs, pushing back on the “progress” narrative of the past few days.

Focus today will be on economic data and earnings.  On the data front, the key reports today include Durable Goods (E: 1.4%), Jobless Claims (E: 220K) and Existing Home Sales (E: 4.12 million) and if this “hard” data remains solid it will push back against slowdown concerns.    There is also one Fed speaker, Kashkari (5:00 p.m. ET), but he shouldn’t move markets.

On earnings, the key reports today include GOOGL ($2.02), INTC ($-0.14) and PG ($1.54).  For GOOGL and INTC, guidance will be key while investors will wait to see the impact of tariffs on PG’s quarter.

The Bull Case vs. the Bear Case (Updated Post Tariffs)

/in , /by

What’s in Today’s Report:

  • The Bull Case vs. the Bear Case (Updated Post Tariffs)
  • Jobs Day

Futures are sharply lower again (down more than 2%) as there were no incrementally positive trade headlines overnight.

Unsurprisingly, messaging from the White House was contradictory overnight, as President Trump said he’s open to negotiations on tariff reduction while aides said the opposite and the mixed messaging is only increasing investor angst.

Today, trade headlines will continue to dominate markets and any continued mixed/contradictory messaging from the White House will only pressure stocks further, while any evidence that tariff reduction is possible could cause a bounce.

Away from trade, today is the jobs report and expectations are as follows:  131K Job-Adds, 4.2% Unemployment Rate, 4.0% y/y Wage Growth.  If the jobs report is soft, it’ll only make the selloff worse as recession fears rise, while a strong jobs report will likely be dismissed as “outdated” now that we have the new tariff regime.

Finally, Fed Chair Powell speaks at 11:25 a.m. ET and if he’s dovish there could be a mild bounce in stocks, but I’m afraid the Fed can’t really fix this problem for the markets.  There are two other Fed speakers,  Barr (12:00 p.m. ET) and Waller (12:45 p.m. ET) but they shouldn’t move markets.

Are Credit Spreads Confirming Growth Worries?

/in , /by

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.

Market Multiple Table: February Update

/in , , /by

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.

Discretionary demand for driving fuels, which remains near a 52-week low right now.

/in , , /by

Discretionary demand for driving fuels, which remains near a 52-week low right now.: Tyler Richey Quoted in Morningstar

Oil prices drop on rise in U.S. supplies as tariffs threaten to dent Chinese demand

Refinery utilization rose by 1 percentage point to 84.5%, EIA data showed. The uptick was likely in reaction to a “weather-driven rise in demand for heating oil last week,” which also helps explain the sizeable increase in distillate stockpiles, which include heating oil, said Tyler Richey, co-editor at Sevens Report Research.

However, the trends in the weekly data suggest that demand for oil and refined products has been weak so far in 2025, “and [is] potentially poised to get weaker,” he said. “That is especially true regarding discretionary demand for driving fuels, which remains near a 52-week low right now.”

“If we don’t begin to see signs of firming inflation” with gasoline supplied rising back towards 9 million barrels per day or higher in the weeks ahead, then “WTI futures dropping back below $70 [per] barrel will become rather likely,” said Richey.

Also, click here to view the full MarketWatch article published on Morningstar on February 5th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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.

Jobs Report Preview: Why A Goldilocks Report Matters For This Market

/in , , /by

Jobs Report Preview: Why A Goldilocks Report Matters For This Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview:  Why A Goldilocks Report Matters For This Market

Futures are little changed as markets await the next round of news on tariffs while economic data was mixed.

Economically, Euro Zone Retail Sales missed estimates (-0.2% vs. (E) 0.0%) underscoring still tepid EU growth.

On trade, a call between Trump and Xi still hasn’t happened but most expect tariffs to be reduced when it does.

Today will be a busy day in the markets, starting with a major central bank decision as the Bank of England is expected to cut rates 25 bps.

Economically, there are two notable reports today including Jobless Claims (E: 215K) and Unit Labor Costs (E: 3.3%) and as we’ve seen the last two days, slight misses vs. expectations will be positives for stocks and bonds.  On the Fed front, there are two speakers today but they won’t move markets as they both speak after the close (Logan at 5:10 p.m. ET and Waller at 7:30 p.m. ET.

Finally, on earnings, the key report today is AMZN ($1.52) after the bell.

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.

Five Important Events to Watch As We Start 2025

/in , , /by

Five Important Events to Watch As We Start 2025: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Five Important Events to Watch As We Start 2025
  • The Sevens Report Q4 Quarterly Letter Will Be Delivered to Subscribers Today

Futures are moderately higher to start the new year despite disappointing global economic data.

Manufacturing PMIs from China, the EU and the UK all missed expectations, highlighting the disparity between solid U.S. growth and lackluster global growth.

The Chinese Caixin Manufacturing PMI declined to 50.5 vs. (E) 51.7, the Euro Zone reading slipped to 45.1 vs. (E) 45.2 while the UK version dropped to 47.0 vs. (E) 47.3.

Today focus turns back to economic data and as was the case at the end of 2024, markets need in-line to slightly soft economic readings to keep Fed rate cut and soft landing expectations stable.  Today, that means Jobless Claims near their 225k estimate (and not too much lower) and the S&P Final Manufacturing PMI in-line with estimates (E: 48.3).

 

Sevens Report Quarterly Letter Delivered Today

Our Q4 ’24 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you 1) Save time (an average of 4-6 hours per quarterly letter) and 2) Show you’re on top of markets with impressive, compelling market analysis

You can view our Q3 ’24 Quarterly Letter here.

To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

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.

What to Expect from Markets in 2025

/in , , /by

What to Expect from Markets in 2025: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What to Expect from Markets in 2025
  • Weekly Market Preview:  Does the Fed Keep Cutting and Does Data Stay Goldilocks?
  • Weekly Economic Cheat Sheet:  All Eyes on the Fed Dots

Futures are slightly higher following a mostly quiet weekend of news and despite mixed global economic data.

Chinese Retail Sales (3.0% vs. (E) 4.6%) and Fixed Asset Investment (3.3% vs. (E) 3.5%) both missed estimates, reminding investors that despite promises for more stimulus, Chinese growth remains lackluster.

In Europe, data was better as the flash Composite PMIs for the EU (49.5 vs. (E) 48.0) and the UK (50.5 vs. (E) 50.0) both beat estimates.

Today focus will be on the Empire Manufacturing Survey (6.4) as that’s the first data point for December and investors will want to see in an-line to slightly soft reading to reinforce the Goldilocks narrative.

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.