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2025 Market Risks: Pullback Causers vs. Rally Killers

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  • 2025 Market Risks: Pullback Causers vs. Rally Killers

Futures are lower with EU shares as escalating geopolitical tensions are driving risk-off money flows this morning.

Overnight, Russian President Putin approved a doctrine that lowered the threshold for the use of nuclear weapons and shortly thereafter, Ukraine reportedly launched their first long-range ballistic missile attack on targets in Russia prompting risk-off/safe-haven money flows.

Economically, Eurozone HICP (CPI equivalent) was inline in October with a headline of 2.0% y/y and 2.7% y/y Core which did not materially move markets amid the geopolitical developments.

Today, the fluid geopolitical situation in between Russia and Ukraine will be in focus as the uncertainties surrounding the next steps in the conflict will likely drive risk-aversion until some degree of clarity emerges.

Domestically, there is one economic report due to be released: Housing Starts (1.3M) and two Fed speakers to watch: Goolsbee (12:25 p.m. ET) and Schmid (1:10 p.m. ET). Barring a big surprise in the data or any meaningfully dovish or hawkish changes in rhetoric, the data and Fed speakers will not likely move markets materially.

Finally, on the earnings front we will get quarterly results from WMT ($0.53), LOW ($2.81) and MDT ($1.24) today.

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The CPI release didn’t counter existing market narratives

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The market views it as keeping the Fed on schedule for June rate cuts: Tom Essaye Quoted in Barron’s

Stocks Are Rallying. Inflation Report Keeps the Fed on Track.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the headline figure didn’t meet expectations, the numbers didn’t counter existing market narratives.

“People still very much subscribe to the idea that housing is artificially inflating CPI, and that whenever that begins to work its way out of the data, the number will move down even more quickly than it is,” Essaye says. “Nothing in this report refuted that, and so as a result, I think that the market views it as keeping the Fed on schedule for June rate cuts.”

“For now, the script is still in place,” Essaye says. “The issue markets have is that it’s already priced in, so we need to find the next new catalyst.”

Also, click here to view the full Barron’s article published on March 13th, 2024. 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

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Futures Are Slightly Higher

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Futures Are Slightly Higher: Tom Essaye Quoted in Barron’s

How Likely Is a Santa Claus Rally Looking?

“Futures are slightly higher following a mostly quiet holiday weekend and on more signs inflation is falling globally, Tom Essaye, founder of the Sevens Report, wrote Tuesday.

So far though, Tuesday is giving investors hope that the year will end on a high note.

Tuesday marks the first day of trading for the last week of the year, and investors are hoping to finish 2023 off strong.

Also, click here to view the full Barron’s article published on December 26th, 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.

Markets Have Aggressively Priced In No Recession Or Slowdown

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Markets Have Aggressively Priced In No Recession Or Slowdown: Sevens Report Analysts Quoted in Investing.com

Dow Jones, Nasdaq, S&P 500 weekly preview: Eyeing record highs

“Markets have aggressively priced in no recession or slowdown, but that’s premature. The economy could easily slow and there are some signals slowing growth is happening,” analysts at Sevens Report said.

Sevens Report analysts: “For this rally to continue, we can’t have economic data suddenly start to miss expectations, because now that the Fed has made its dovish pivot, it can’t help markets if worries about an economic slowdown rise. That’s why we’re watching economic data closely at the start of the year.”

Also, click here to view the full Investing.com article published on December 18th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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.

Sentiment Has Deteriorated Since The Start Of December

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Sentiment Has Deteriorated: Tom Essaye Quoted in Barron’s

Stocks Open Lower as Market Digests November Rally

“Investors will want to see more evidence that supports a soft landing in the data as sentiment has deteriorated since the start of December,” Tom Essaye writes.

Sevens Report Research’s Tom Essaye points out that the decision by Moody’s Investors Service to downgrade the outlook for Chinese government credit to negative from stable could be weighing on sentiment. Economic reports due in the day ahead are the Job Openings and Labor Turnover Survey and ISM Services Index, both at 10 a.m. ET.

Also, click here to view the full Barron’s article published on December 5th, 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.

Tom Essaye Quoted in Barron’s on August 9th, 2023

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Stocks Pause Ahead of Inflation Data

“The Italian government clarified that a windfall tax on bank profits would be capped, sparking a relief rally in European financials and general risk-on trade in global markets,” Essaye writes. “There are no notable economic reports and no Fed officials are scheduled to speak today which is setting the session up to be fairly quiet as traders await tomorrow’s CPI release.” Click here to read the full article.

Tom Essaye Quoted in Barron’s On July 19th 2023

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Stocks Can Keep Rising, According to Dow Theory

“Dow Theory, which is one of the most historically accurate strategies to identify the primary trend in the stock market, is now saying the path of least resistance is higher for the first time since April of 2022,” wrote Sevens Report’s Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Barron’s on December 21, 2022

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Dow Soars 500 Points as Consumer Data Adds Some Cheer

“Stocks are digesting the declines of the past two weeks and while there are some notable employment and inflation numbers looming on Thursday and Friday, the bottom line is the calendar into year-end should be mostly quiet, again barring any material surprises,” Tom Essaye, the founder of Sevens Report Research, wrote Wednesday. Click here to read the full article.

Tom Essaye Quoted in Barron’s on October 3rd, 2022

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Dow Rallies to Kick Off October

“If companies are more positive on the outlook than is currently expected (as happened with the Q2 earnings) then that will offset growing worries that earnings expectations are about to fall sharply,” Sevens Report’s Tom Essaye wrote. Click here to read the full article.

Tom Essaye Quoted in Coinspeaker on July 22, 2021

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Wall Street Keeps Up with Upward Momentum for Second Consecutive Day, Dow Jones Up 280 Points

In a report on Wednesday, Thomas Essaye of Sevens Report Research said “Tuesday was a textbook oversold bounce following Monday’s…” Click here to read the full article.