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Tom Essaye Interviewed On Schwab Network

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 Boeing’s loss this quarter is breathtaking: Tom Essaye Interviewed On Schwab Network

Boeing (BA) Plummets on Double Earnings Miss

The size of Boeing’s (BA) loss this quarter is “breathtaking,” says Tom Essaye, going on to call the numbers “horrific.” But, he adds, what’s important is how well they execute on their recovery plan. Nicolas Owens notes the recent machinist strike cost Boeing billions of dollars, and that the new CEO is looking for “fundamental culture change.”

Also, click here to view the full interview with Schwab Network published on October 23rd, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Barron’s Senior Managing Editor and Deputy Editor speak with Tom Essaye

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Semiconductor stocks have cycle-leading characteristics: Sevens Report Editor, Tom Essaye, interviewed on Barron’s Live

Talking Markets with Sevens’ Report Tom Essaye

Barron’s Senior Managing Editor Lauren R. Rublin and Deputy Editor Ben Levisohn speak with Tom Essaye, Founder and President of Sevens Report about the outlook for financial markets, industry sectors, and individual stocks.

Tom Essaye: Absolutely. So the number one message we’re trying to convey in the Sevens Report is for investors to really stay focused on economic growth. And the reason I say that is because if growth can’t hold up, then we have to talk about this rally potentially ending in a very uncomfortable way. And for those of us who have been in the markets for a long time, at least at the start of this century, we’ve seen that happen a few times and it’s very painful. And if you think about investing, those are really the types of markets we want to avoid. So with the Fed cutting rates, we now know that if growth rolls over, they will not be able to cut fast enough to prevent any sort of a slowdown. So to use the analogy, the die has been cast to a point. Now the Fed is cutting and we must see if growth holds up. Everything that’s going on around growth, so how many cuts are they going to have in 2024? What’s going to happen with the election? Is the Chinese stimulus going to be enough? All of those are ancillary issues, but the main issue is growth. Because if growth rolls over, now we have to talk about that being a rally-killing event and those are the big events we want everyone to be able to avoid.

Also, click here to view the full Barron’s interview published on MarketWatch on October 21st, 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.

 

How Bullish Are Investors? (The Answer May Surprise You)

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How Bullish Are Investors? (The Answer May Surprise You): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • How Bullish Are Investors?  (The Answer May Surprise You)

Futures are modestly higher following a night of solid earnings and mixed economic data.

TSLA is rallying 11% pre-market after posting stronger than expected earnings and that’s helping futures rally.

Economically, EU and UK flash PMIs were mixed but, on balance, Goldilocks enough to support a bounce in stocks.

Today focus will shift from earnings to economic data and the important reports today are:  Jobless Claims (E: 247K), Oct. Flash Manufacturing PMI (E: 47.6) and the Oct. Flash Services PMI (E: 55.0).  Goldilocks data that’s in-line with expectations (so not too good or too bad) is the best outcome for a continued rebound in stocks and bonds today.

We also have one Fed speaker today, Hammack at 8:45 a.m. ET, and some notable earnings including UPS ($1.65), AAL ($0.13) and COF ($3.70).  But, barring any major surprises they shouldn’t move markets.

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Why Yields Are Suddenly Surging

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Why Yields Are Suddenly Surging: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Rising Yields: Is it Growth, the Fed, or Fiscal Worries?
  • Chart: Market Based Inflation Expectations Hit 4-Month Highs

Futures are under pressure again this morning as the 10-Yr yield continues to edge further beyond 4.20%, the highest readings since July, while traders await more important earnings releases today and into the weekend.

Economically, Taiwan’s Industrial Production index, which includes the nation’s critical semiconductor output, slowed to 11.22% in September from a lower revised 12.54% rise in August signaling a potential slowdown in high-tech, AI-focused chips in H2’24.

Today, there is one economic report due out: Existing Home Sales (E: 3.90 million) but unless it is meaningfully “hot” it should not have a major impact on markets (although a cool report that influences less hawkish money flows would be well received by equity markets).

Additionally, there are two Fed speakers to watch: Bowman (9:00 a.m. ET) and Barkin (12:00 p.m. ET) from which markets will look for a less-hawkish, more accommodative tone than the recent “higher-for-longer” policy rate chatter.

Finally, earnings season continues with several notable companies reporting quarterly results including BA ($-10.34), KO ($0.74), and T ($0.59) before the open, and TSLA ($0.58), IBM ($2.27), and TMUS ($2.34) after the close.

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Why Didn’t Stocks Rally More Last Week?

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Why Didn’t Stocks Rally More Last Week?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Didn’t Stocks Rally More Last Week?
  • Weekly Market Preview: Earnings Are the Key This Week
  • Weekly Economic Cheat Sheet: The First Major October Datapoint

Futures are slightly lower to start the week despite more Chinese stimulus and better than expected EU inflation data.

The PBOC announced another larger than expected rate cut, continuing to add stimulus to the Chinese economy.

Economically, German PPI declined more than expected (-1.4% vs. (E) -1.2%), increasing ECB rate cut expectations.

Today there is only one notable economic report, Leading Indicators (E: -0.3%) but there are several Fed speakers: Logan (8:55 a.m. ET), Kashkari (1:00 p.m. ET), Schmid (5:05 p.m. ET).  If the data is in-line and the Fed speakers reinforce two remaining rate cuts in 2024, that should support markets (it’s the Goldilocks set up).

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Earnings Offer Mixed Economic Signals

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Earnings Offer Mixed Economic Signals: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Earnings Giving a More Mixed Economic View (Although It’s Still Early)
  • Empire State Manufacturing Index Takeaways
  • Insight from Oil’s Early Week Collapse

U.S. futures are steady as yesterday’s pullback is digested while overseas markets were mostly lower overnight after ASML’s downbeat guidance weighed on global tech shares and LVMH earnings rekindled concerns about consumers.

Economically, UK Core CPI favorably fell 0.4% to 3.2% vs. (E) 3.5% in September, bolstering BoE rate cut bets.

Today, there is one second-tiered inflation report to watch: Import & Export Prices (E: -0.3%, -0.4%), but barring a big surprise one way or another it is not likely to move markets.

Additionally, there is a 4-Month Treasury Bill auction at 11:30 a.m. ET. A strong auction would be received as dovish and help stocks and other risk assets stabilize in the midst of increasingly hawkish Fed policy expectations in recent weeks.

There are no Fed officials scheduled to speak today but earnings season continues to pick up with results being released by several big financials: MS ($1.57), CFG ($0.79), SYF ($1.77), DFS ($3.29) and a few more economically-sensitive companies PPG ($2.15), CSX ($0.48).

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Is China the Next Japan?

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Is China the Next Japan?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is China the Next Japan?

Futures and EU shares are lower as cautious retailer earnings guidance and heavy trade in China overnight are offsetting easing geopolitical tensions following reports that Israel would not strike Iranian oil/energy infrastructure (oil futures are down nearly 5%).

Economically, EU Industrial Production met expectations overnight while a German Economic Sentiment gauge topped estimates, but neither report is materially moving markets this morning.

Today, there is one important economic report to watch: The Empire State Manufacturing Index (E: 0.0), and two Fed officials are scheduled to speak: Daly late morning (11:30 a.m. ET) and Kugler in the early afternoon (1:05 p.m. ET).

Additionally, there are two typically lesser-followed Treasury auctions for 3-Month and 6-Month T-Bills at 11:30 a.m. ET that could shed fresh light on market expectations for Fed policy rates between now and Q2’25 which have swung sharply hawkish over the last two weeks. Strong auction would have dovish implications for the market and be well received by equity investors today.

Finally, earnings season is getting into full swing with several more big banks reporting quarterly results today: BAC ($0.78), C ($1.34), and GS ($6.85) while two members of the Dow Jones Transportation Average: UAL ($3.10) and JBHT ($1.43) are also due to report today.

Bottom line, equity markets have rallied solidly over the last week amid a combination of earnings optimism and soft-landing hopes. If any of the economic data, Fed chatter, or earnings results damage either of those narratives, expect some mild profit taking in equities today, otherwise the path of least resistance is still higher for stocks right now.

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Why Yesterday’s Economic Data Wasn’t That Bad

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Why Yesterday’s Economic Data Wasn’t That Bad: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Yesterday’s Economic Data Wasn’t That Bad

Futures are slightly weaker this morning as Tesla’s “Cyber Cab” event underwhelmed while investors look ahead to the start of earnings season.

Economically, German CPI and UK monthly GDP both met estimates and didn’t provide any negative surprises.

Today investors will be focused on more inflation data via PPI (E: 0.2% m/m, 1.6% y/y) and Core PPI (E: 0.2% m/m, 2.7% y/y) while there are also several Fed speakers including Goolsbee (9:45 a.m. ET), Logan (10:45 a.m. ET) and Bowman (1:10 p.m. ET).  But, barring any major surprises from PPI or those Fed officials, they shouldn’t move markets.

Additionally, focus will now turn towards earnings and that will be one of the dominant forces on markets for the next three weeks.  Key reports today include: JPM ($4.02), BLK ($10.42), WFC ($1.27), FAST ($0.52).

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October MMT Update: Positive News (But Priced In)

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How to Cut Through the Market Noise: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • October Market Multiple Table – Positive News But Priced In

U.S. futures are higher on dovish-leaning comments by the Fed’s Kugler overnight while global shares declined broadly in sympathy with a near-10% drop in Chinese shares after the latest government stimulus efforts disappointed.

Economically, German Industrial Production rose 2.9% vs. (E) 0.8% in August, helping easing EU growth worries while the NFIB Small Business Optimism Index rose to 91.5 but narrowly missed estimates of 91.7.

There are no notable economic reports today, however several Fed officials are scheduled to speak: Bostic (12:45 p.m. ET), Collins (4:00 p.m. ET), and Jefferson (7:30 p.m.). Based on the market’s positive reaction to Kugler’s comments in the pre-market, more dovish commentary has the potential to fuel a further relief rally today while a hawkish tone would likely weigh on stocks.

Finally, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and given the hawkish money flows in the wake of last week’s ISM data and September jobs report, weak demand at the auction could send yields to new highs and further pressure equity markets.

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How to Cut Through the Market Noise

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How to Cut Through the Market Noise: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • How to Cut Through the Market Noise
  • Weekly Market Preview:  Inflation and Earnings
  • Weekly Economic Cheat Sheet:  CPI on Thursday is the Key Report

Futures are moderately lower following underwhelming economic data and as investors continue to wait for the Israeli response to Iran.

Economically, German Manufacturers’ Orders and Euro Zone retail sales both missed estimates.

Geopolitically, investors are still awaiting the Israeli response strike to Iran and that lingering uncertainty is further boosting oil and weighing on futures.

Today the calendar is quiet as there is just one economic report, Consumer Credit (E: $13.5B) and two Fed speakers, Bowman (1:00 p.m. ET) and Kaskari (1:50 p.m. ET) but none of that should move markets.  Instead, focus will be on geo-politics as investors anxiously await the Israeli response strikes on Iran and whether they hit key infrastructure (nuclear sites, energy sites) or not will determine the impact on markets.

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