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The key parts of the release will be one and five-year inflation expectations

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The key parts of the release will be one and five-year inflation expectations: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Dow Opens Higher, Extending Winning Streak

Aside from the Fed speakers, traders will get an update on consumer sentiment from the University of Michigan. Sevens Report Research’s Tom Essaye writes that the key parts of the release will be one-year inflation expectations and five-year inflation expectations.

“If both of those numbers are higher than expected, it’ll be another negative signal on inflation and don’t be surprised if Treasury yields rise in response to them and stocks give back these early gains,” Essaye writes.

Also, click here to view the full Barron’s article published on May 10th, 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 RallyIf 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.

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A high-frequency proxy for consumer spending

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A high-frequency proxy for consumer spending: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Recession-wary investors are watching gasoline demand for clues to consumer health

“Gasoline demand is being closely watched as a high-frequency proxy for consumer spending,” said Tyler Richey, co-editor at Sevens Report Research.

“Keeping an eye on the weekly gasoline supplied figure as a proxy for consumer demand for gasoline will be critical, especially relative to its four-week moving average to gauge the underlying trend in fuel demand, and compared with prior year’s levels for the corresponding reporting week,” Richey said.

Also, click here to view the full MarketWatch article published on May 9th, 2024. 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.

Are Stagflation Risks Real?

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Are Stagflation Risks Real? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Are Stagflation Risks Real?
  • Weekly Market Preview:  If Treasury Yields Rebound, Will That Hit Stocks?
  • Weekly Economic Cheat Sheet:  CPI on Wednesday, Important Growth Data Throughout the Week

Futures are slightly higher following a very quiet weekend of news as investors look ahead to a potentially very important week that includes Wednesday’s CPI report.

China announced plans to sell $140 billion in long term bonds to fund more economic stimulus, which will help combat recession fears in that economy.

There was no notable economic data out over the weekend.

Today focus will be on the New York Fed One Year Inflation Expectations (3.0%).  If they run hot like we saw in Friday’s University of Michigan Inflation Expectations, Treasury yields should rise and pressure stocks.  Outside of that data, we also have two Fed speakers, Jefferson & Mester (9:00 a.m. ET), but they shouldn’t move markets unless they talk about rate hikes.

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Is Gasoline Demand Another Economic Warning Sign?

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Is Gasoline Demand Another Economic Warning Sign? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is Gasoline Demand Another Economic Warning Sign?
  • Did Earnings Season Change the Market Outlook?

Futures are solidly higher thanks to continued momentum from Thursday’s rally following a quiet night of news.

Economically, UK data was stronger than expected (GDP and Industrial Production beat estimates) but it’s not changing BOE June rate cut assumptions.

Today there is just one notable economic report, the University of Michigan Consumer Sentiment Index (E: 77.0) and the key parts of that release will be the 1-Yr Inflation Expectations (E: 3.2%) and the 5-Yr. Inflation Expectations (E: 3.0%).  If both of those numbers are higher than expected, it’ll be another negative signal on inflation and don’t be surprised if Treasury yields rise in response to them and stocks give back these early gains.

In addition to that one economic report, we also get numerous Fed speakers today including: Bowman (9:00 a.m. ET), Logan (10:00 a.m. ET), Kashkari (10:00 a.m. ET), Goolsbee (12:45 p.m. ET) and Barr (1:30 p.m. ET).  However, unless one of them explicitly advocates for rate hikes, they shouldn’t move markets.

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There are only really three important weeks of earnings season

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There are only really three important weeks of earnings season: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Dow, S&P 500 Tick Higher

“There are only really three important weeks of earnings season, and Disney comes the week after it,” Sevens Report Research’s Tom Essaye told Barron’s. “It sort of puts a bow on earnings season, but it’s not like Disney is really that representative of the broader economy.”

“The global market has convinced themselves that that the [European Central Bank] and the BOE are going to cut in June,” Essaye says. “And if the Bank of England pushes back on that, I think could be a little bit of a negative surprise.”

Also, click here to view the full Barron’s article published on May 7th, 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 RallyIf 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.

What Are The GRANOLAS and Why Are They Attractive?

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What Are The GRANOLAS and Why Are They Attractive? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Are The GRANOLAS and Why Are They Attractive?
  • EIA Analysis and Oil Market Update

Futures are modestly weaker following a quiet night of news as investors digest the last weeks’ gains.

Economically, Chinese exports (1.5% vs. (E) 1.3%) and imports (8.4% vs. (E) 4.7%) were stronger than expected, offering some optimism for that economy.

Tech earnings continued to be mixed as semiconductor company ARM Holdings (ARM) posted soft guidance and the stock is down 8% pre-market.

Today focus initially will be on the BOE Rate Decision, as no rate cut is expected but the BOE may signal a rate cut is coming in June.  In the U.S., the only notable number is Jobless Claims (E: 212K) and there’s just one Fed speaker today (Daly at 2:00 p.m. ET) and it’ll take a significant surprise from either event to move markets.

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May MMT Update: Less Bad News Is Not Good

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May MMT Update: Less Bad News Is Not Good: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • May Market Multiple Table Update: Don’t Confuse Less-Bad News for Actual Good News

Futures are little changed this morning as favorable EU economic data and strong bank earnings from UBS and UniCredit offset escalating geopolitical tensions in Gaza.

Geopolitically, Israeli tank units seized a critical Rafah border crossing with Egypt as ceasefire talks reportedly continue, however the market impact is limited this morning with oil futures slightly lower.

Economically, UK’s Construction PMI topped estimates (53.0 vs. E: 51.1) and EU Retail Sales rose 0.8% vs. (E) 0.7% helping ease worries about fading economic growth in Europe.

Looking into today’s session, focus will be on the Fed’s Kashkari who speaks mid-morning (11:30 a.m. ET). The market is looking for more confirmation of sooner-than-later rate hikes in 2024.

Then this afternoon, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET which will be closely watched by bond traders to see how well the larger than expected Q2 bond issuance will be absorbed by the market. A tailing auction that sends yields higher will be negative for stocks.

Finally, there is just one economic report this afternoon: Consumer Credit ($15.5B) and two earnings reports to watch: DIS ($1.11), LYFT ($0.02).

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.

Sevens Report Research’s Tom Essaye Quoted by Barron’s in a Phone Interview

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Price pressures are firming up: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Dow Drops 300 Points. Price Pressures Are Firming Up.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that hotter-than-expected employment cost and home price data spooked markets after a couple strong days.

“What I think that’s doing is reminding everybody, after a couple of days of a breather, that there’s really a long and growing list of indicators that are showing price pressures are firming up,” Essaye says.

He notes that while inflation is not roaring back, the numbers have remained elevated enough to increase the likelihood that the Federal Reserve keeps rates higher for longer.

“If he says, ‘Look, this is very disappointing and we may have to consider hiking rates again,’ which I don’t think he will do, but if he does do that, then it’s going to hit the markets really hard,” Essaye says.

Also, click here to view the full Barron’s article published on April 30th, 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 RallyIf 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 (An Important One)

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Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview (An Important One)
  • Is the Short-Vol Trade Starting to Unwind?
  • EIA Analysis and Oil Market Update

Futures are modestly higher as economic data and corporate earnings were slightly better than expected.

Economically, Euro Zone and UK Composite PMIs were above 50 and that’s pushing back on EU recession worries.

On earnings, Levi Strauss (LEVI) posted strong results (stock up 9% pre-market) and that’s helping to counter soft retailer earnings from PVH and ULTA.

Markets are still sensitive to hawkish data or commentary that reduces June rate cut chances, so the focus today will be on Jobless Claims (E: 213K) and on several Fed speakers including Barkin (12:15 p.m. ET), Mester (2:00 p.m. ET) and Kugler (7:30 p.m. ET).  Tomorrow’s jobs report should keep volatility somewhat subdued, but if there are any hawkish surprises from the data or Fed speak, don’t be surprised if there’s more volatility.

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.

Why the Falling Yen Matters to Your Clients

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Why the Falling Yen Matters to Your Clients: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why the Falling Yen Matters to Your Clients
  • ISM Manufacturing Index Takeaways
  • 10-Yr Yield Testing Key 2024 Resistance – Chart

Stock futures are modestly lower and Treasury yields are testing YTD highs this morning amid new multi-month highs in oil and better-than-feared EU economic data.

Economically, the final EU Manufacturing PMI for March was revised up from 45.7 to 46.1 which is still in contraction territory but adding pressure to global bond markets.

Looking into today’s session, we will get data on Motor Vehicle Sales early (E: 16.0 million) but trader focus will be on two more important reports for the outlook for the economy and critically Fed policy: Factory Orders (E: 1.0%) and JOLTS (E: 8.8 million).

If either of the latter two reports come in “hot” expect the 10-Yr to extend pre-market gains and stocks to remain under pressure today.

Additionally, there are a few Fed speakers on the calendar with: Bowman (10:10 a.m. ET), Williams (12:00 p.m. ET), Mester (12:05 p.m. ET), and Daly (1:30 p.m. ET). Any pushback on the case for a summer rate cut and a total of three cuts in 2024 will add to hawkish money flows with yields rising and stocks likely extending the so-far-modest weekly declines.

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.