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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.

The Rally Is Broadening

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The Rally Is Broadening: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Rally Is Broadening
  • SPY vs. RSP Comparison – Bar Chart

Equity futures are higher this morning as traders position into a fairly busy morning of U.S. economic data while Chinese authorities intervened in the currency market to support the yuan which is helping general investor sentiment.

Economically, the German GfK Consumer Climate index was slightly better than feared at -27.4 vs. (E) -27.9 but the release is not materially impacting markets this morning.

Today, focus will be on economic data early with several key reports due to be released including: Durable Goods Orders (E: 1.3%), Case-Shiller Home Price Index (E: 0.2%), and Consumer Confidence (E: 106.7).

There are no Fed officials scheduled to speak today but there is a 5-Yr Treasury Note auction at 1:00 p.m. ET. With the elevated level of market anxiety surrounding Friday’s Core PCE release (when markets will be closed) any surprises via strong or weak demand in the auction could move yields and impact equities.

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.

Fundamentals are positive, they still don’t justify current valuations

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The market is vulnerable to a negative surprise: Tom Essaye Quoted in SwissInfo.ch

Stocks Struggle Near Record Before Inflation Data: Markets Wrap

The current set-up reflects the drivers that have powered stocks higher this year: solid growth, prospects for Fed rate cuts and artificial-intelligence enthusiasm, according to Tom Essaye, founder of the Sevens Report. “While the fundamentals are positive, they still don’t justify current valuations — making the market vulnerable to a negative surprise.”

Also, click here to view the full article published on March 14th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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.

Jobs Report Preview (Will June Cuts Still Be Expected?)

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Jobs Report Preview: Is There a Disconnect? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview (Will June Cuts Still Be Expected?)
  • EIA Analysis and Oil Market Update

Futures are slightly higher following a generally quiet night of news as markets look ahead to tomorrow’s jobs report.

Economically, the only notable number overnight was German Manufacturers’ Orders and it badly missed expectations (-11.3% vs. (E ) -6.0%) but it isn’t impacting markets.

Japanese stocks fell sharply (Nikkei down more than 1%) as “chatter” grew louder the BOJ may hike rates in March.

Today is a relatively busy day of events but it’ll take some significant surprises to move markets ahead of tomorrow’s jobs report.

The key events today, in order of importance, are:   ECB Rate Decision (No change is expected but will Lagarde point to June cuts?), Jobless Claims (E: 215K, will they keep rising?), Unit Labor Costs (E: 0.7%), Powell’s Senate testimony (10:00 a.m. ET) and Cleveland Fed President Mester (11:30 a.m. ET).

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.

Is This A Teflon Market? (No. Here’s Why)

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Is This A Teflon Market? (No. Here’s Why): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is This A Teflon Market? (No. Here’s Why)
  • Weekly Market Preview:  Can Data and Fed Speak Extend the Rally?
  • Weekly Economic Cheat Sheet:  All About Employment (Jobs Report Friday among others).

Futures are slightly lower following quiet weekend of news as markets digest Friday’s rally.

Geopolitically, hope is growing for a six-week ceasefire in Gaza that could be announced in the coming days and that’s modestly weighing on oil prices.

The S&P 500 will become even more “AI” sensitive as SMCI  (Super Microcomputer) will in added to the S&P 500, incrementally increasing tech exposure to the index.

This will be a potentially busy week of catalysts but it starts slowly today as there are no economic reports and just one Fed speaker, Harker at 11:00 a.m. ET.  So, absent any surprises, expect yields to drive stocks.  If the 10-year Treasury yield drifts lower, don’t be surprised if stocks recoup these early losses.

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.

Hard vs. Soft Landing Scoreboard: More Signs of Slowing Growth

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Hard vs. Soft Landing Scoreboard: More Signs of Slowing Growth: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing vs. Soft Landing Scoreboard: Still a Soft Landing But More Signs of Slowing Growth
  • Chart: Consumer Confidence Data Points to Slowing Growth

Futures are lower as traders continue to reposition following last week’s sprint to record highs while focus shifts ahead to tomorrow’s critical inflation data.

Economically, the headline of the Eurozone Economic Sentiment report fell to 95.4 vs. (E) 96.7 which didn’t help risk assets in pre-market trade.

Today, traders will be watching the release of Q4 GDP (E: 3.3%) and International Trade in Goods (E: -$88.1B) ahead of the bell. Any data that is not Goldilocks (or “Platinumlocks”) will likely keep stocks under pressure ahead of tomorrow’s PCE Price Index report.

Later in the day, there are several Fed speakers: Bostic (12:00 p.m. ET), Collins (12:15 p.m. ET), and Williams (12:45 p.m. ET). Bostic and Williams are on the FOMC, so their comments have the potential to move markets with tomorrow’s inflation data coming into view.

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’s Changed Since October (And Is It Worth A 25% Rally?)

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What’s Changed Since October: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What’s Changed Since October (And Is It Worth A 25% Rally?)
  • Weekly Market Preview:  Can Data and News Stay Platinumlocks?
  • Weekly Economic Cheat Sheet:  An Important Week for Inflation.

Futures are little changed following a generally quiet weekend of news.

Geopolitically, news was mixed over the weekend.  Positively, progress was made in negotiating a Israel/Hamas cease fire and there is hope an agreement can be reached this week.  Negatively, chances of a U.S. government shutdown on March 1st (this Friday) are rising.

There were no notable economic reports overnight.

This will be a busy week of important economic data, earnings and political news (possible government shutdown on Friday) but it starts slowly as the only notable economic report today is New Home Sales (E: 685k) and there is just one Fed speaker, Schmid at 7:40 p.m. ET.  So, focus will remain on the political headlines today and if shutdown chances increase, look for mild pressure on stocks.

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.

Growth Data Becomes Even More Important

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Growth Data Becomes Even More Important: Tom Essaye Quoted in Barron’s

The Dow Had Its Biggest Drop Since 2023. It Was Almost Worse.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t show an uptick in inflation, it did dial back expectations for a market that’s been pricing in rate cuts sooner rather than later.

Essaye adds that Thursday’s growth data becomes even more important because the bullish thesis is built on a belief the central bank cuts rates and growth stays stable.

He notes recent data is starting to imply a leveling off after months of quick disinflation.

“I think now the focus then turns to growth,” Essaye says. “And if you get, all of a sudden, some disappointing growth numbers, now you’re going to have some stagflation worries, and you’re gonna see this thing unwind, I think, kind of quick.”

Also, click here to view the full Barron’s article published on February 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

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.