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Market Multiple Table Chart

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

What’s in Today’s Report:

  • Market Multiple Table Chart
  • EIA and Oil Market Analysis

Futures are slightly higher ahead of this morning’s CPI report after another dovish pivot by a global central bank and despite an potential uptick in geo-political tensions.

South Korea’s central bank made a dovish pivot and added to the idea global central banks are turning dovish.

Geopolitically, expectations are rising for a joint U.S./U.K strike on Houthi’s attacking ships in the Red Sea.

Today focus will be on CPI and expectations are as follows: Headline CPI (0.2% m/m, 3.2% y/y) and Core CPI (E: 0.2% m/m, 3.8% y/y).  The key here is that we see continued declines in at least one of the two metrics as that will likely be enough to keep investors believing in disinflation and March rate cuts.  If both metrics rise from last month, looking for an increase in volatility.

The other notable events today include Jobless Claims (E: 209K) and one Fed speaker, Barkin (12:40 p.m. ET) although they shouldn’t move markets barring a major surprise.

multiple

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Market Multiple Table – October Edition

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Market Multiple Table – October Edition: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – October Edition
  • Why Didn’t a Hot PPI Report Weigh on Markets?

Futures are modestly higher on more reports of global disinflation combined with additional Chinese stimulus.

Japanese PPI rose less than expected (2.0% vs. (E) 2.5%). And, that added to the recent list of inflation data points that imply ongoing global disinflation.

China’s sovereign wealth fund bought shares in the nation’s largest banks, boosting Asian markets.

Today the focus will be on the CPI report and expectations are as follows: Headline CPI:  0.3% m/m, 3.6% y/y, Core CPI: 0.3% m/m, 4.1% y/y.  Bottom line, a CPI Report under expectations should pressure yields and fuel a continued rally in stocks while a hot CPI should lift yields and likely weigh on stocks.

Away from the CPI report we also get Jobless Claims (E: 209K) and have multiple Fed speakers: Bostic & Collins.

Market Multiple Table - October Edition

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 CPI Means for Markets

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What CPI Means for Markets: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • What CPI Means for Markets (Four Takeaways)
  • EIA Analysis and Oil Market Update

Futures are modestly higher thanks to more Chinese economic stimulus and as markets await the ECB decision and important economic data later this morning.

China cut bank reserve requirements by 25 bps in the latest step to help support the Chinese economy and there are signs these measures are starting to have an impact.

Economically, there were no important reports overnight.

Today will be a busy day starting with the ECB Meeting and the market expects a 25 bps hike. But it’ll be a close call and no hike and hawkish rhetoric shouldn’t be a shock.

Lastly, there are multiple important reports today including: Jobless Claims (E: 225K), Retail Sales (E: 0.2%), Core PPI (E: 0.2% m/m, 2.2% y/y), and PPI (E: 0.4% m/m, 1.3% y/y).  Bottom line, markets want Goldilocks data, especially from the jobs report and Control Group in retail sales. Because that data will show easing wage pressures and resilient consumer spending.

What CPI Means

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Hard Landing/Soft Landing Scoreboard Update

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard Update

Futures are little changed as markets digest Thursday’s failed rally amidst more conflicting economic data.

Chinese money supply growth missed estimates and again underscored existing recession risks and that modestly weighed on sentiment.

UK economic data was better than expected, however, with  GDP (0.2% vs. (E) 0.0%) and manufacturing (2.4% vs. (E) 0.2%) both beating estimates.

Today focus will remain on inflation, as we get headline PPI (E: 0.2% m/m, 0.7% y/y) and Core PPI (E: 0.2% m/m, 2.3% y/y) along with the University of Michigan inflation readings within Consumer Sentiment (E: 71.3).  As CPI showed, an in-line inflation number that shows on going and modest disinflation won’t spark a rally, as that’s already priced in, but it will help support stocks around current levels.  A hotter than expected number, however, will likely spark another market decline.

Tom Essaye Quoted in Yahoo on January 11th, 2023

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Stocks End on High Note With ‘Risk-On’ CPI Wagers: Markets Wrap

Now the caveat is that if the headline number drops, but core CPI doesn’t, the report won’t be that positive, wrote Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.

Tom Essaye Quoted in Blockworks on January 12th, 2023

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‘They’re Definitely Still Hiking’: Inflation Cooling May Not Deter Fed

A drop in gasoline prices was the largest contributor to the core inflation dip, something that Tom Essaye, president of Sevens Report Research, told Blockworks is “a little bit more disappointing than the headline would imply.” Click here to read the full article.

Why the Decline in Core Inflation Could Be Slower than Expected

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What’s in Today’s Report:

  • Why the Decline in Core Inflation Could Be Slower than Expected
  • EIA Analysis and Oil Market Update

Futures are slightly lower following a mostly quiet night of news as markets await a deluge of economic data later this morning.

The most notable headline overnight was that negotiators have reached a tentative deal to avoid a U.S. rail strike, although this was never a major concern for markets so the headline isn’t causing a rally.

There were no notable economic reports overnight.

Today the market will be focused on economic data and the key reports will be Jobless Claims (E: 227K), Philadelphia Fed Manufacturing Index (E: 3.5), and the Empire State Manufacturing Index (E: -14.5) as they give us the latest insights into growth and inflation.  If the price indices in Empire and Philly drop notably, that’ll help offset some of the concerns on inflation from the CPI report.

Other data today includes Retail Sales (E: 0.0%) and Industrial Production (E: 0.2%) but they’ll have to be material surprises to move markets.