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Is Q2 Sector Performance Warning About Growth?

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What’s in Today’s Report:

  • Is the Second Quarter Market Performance Warning About Economic Growth?
  • Trading Color – NVDA Declines Mask Broad Market Gains to Start the Week
  • Chart – Equal Weigh S&P 500 Unchanged From Early March

Futures are modestly higher this morning as mega-cap tech recovers some of yesterday’s losses in the pre-market with NVDA up over 3% amid an otherwise quiet night of news.

There were no notable economic reports or market moving catalysts overnight.

Today, investor focus will be on a combination of economic data, Fed speak, and a key Treasury auction

Economically, we will get Case-Shiller Home Price Index (E: 7.0%), the FHFA House Price Index (E: 6.7%), and Consumer Confidence (E: 100.0) releases this morning and there are two Fed speakers: Bowman (7:00 a.m. & 2:15 p.m. ET), Cook (12:00 p.m. ET).

In the afternoon, traders will await the results of a 2-Yr Treasury Note auction at 1:00 p.m. ET. Strong demand (lower yields) will reaffirm the dovish shift in Fed policy expectations this month while weak demand (rising yields) could rekindle higher-for-longer policy rate worries and spark risk-off money flows.

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Does the Bullish Mantra Still Work?

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What’s in Today’s Report:

  • Does the Bullish Mantra Still Work?
  • Weekly Market Preview:  Upward Momentum Still in Control
  • Weekly Economic Cheat Sheet:  Friday’s Core PCE Price Index Is the Key Report This Week

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

Economically, the only notable report overnight was the German IFO Business Expectations and that slightly missed estimates (89.0 vs. 90.4).

Political risks in France eased over the weekend as Marine Le Pen’s National Rally party, which still leads in the polls, committed to fiscal restraint and pro-business policies.

This week contains some important updates on growth and inflation, but it starts quietly as there are no notable economic reports today and just one Fed speaker,  Daly (2:00 p.m. ET), and she shouldn’t move markets.

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Summer’s Finally Here – Investing in the Kids

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What’s in Today’s Report:

  • Summer’s Finally Here – Investing in the Kids
  • EIA Analysis and Oil Market Update

Futures are modestly lower as global economic data missed estimates and further pointed towards a slowing of growth.

The Euro Zone flash PMI dropped to 50.8 vs. (E) 52.4 and UK Flash PMI fell to 51.7 vs. (E) 53.3 and those soft readings are increasing global growth concerns and that’s weighing on futures.

Economic data will again be in focus today and, by far, the most important report is the June Flash Composite PMI (E: 51.6) and given the softness in economic data this week, the stronger this number, the better.

Other notable economic reports today include Existing Home Sales (E: 4.10 million) and Leading Indicators (E: -0.3%) but it’ll take big surprises for them to move markets.

Finally, today is a “Quadruple Witching” options expiration so there may be higher than normal volumes and greater than normal volatility into the close.

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I expect the rest of the week to be very quiet

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I expect the rest of the week to be very quiet: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

S&P 500, Nasdaq Hit New Records

“It essentially will kind of kill the week, to be honest, because anybody that can take Thursday and Friday off just got basically almost a week off,” Sevens Report Research’s Tom Essaye told Barron’s. “There will be plenty of people who will do that. So I expect the rest of the week to be very quiet.”

A wave of Federal Reserve speakers did little to shift the market. Investors know that interest rate cuts will depend on the data in the coming months. Essaye says it will take a surprise from economic data such as jobless claims to wake up the market this week.

“There’s really quite a confluence of data that’s starting to point to some labor market easing. In everyone’s concern that the economy is going to slow, that’s been the missing piece,” Essaye says.

Also, click here to view the full Barron’s article published on June 19th, 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.

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These are all contributing to the recent rebound in the oil market

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These are all contributing to the recent rebound in the oil market: Tyler Richey Quoted in MarketWatch

Oil futures end higher as demand prospects improve

“Price-supportive OPEC+ rhetoric, evidence of strong domestic demand at the start of the U.S. summer driving season, rising geopolitical tensions overseas, and renewed hopes for a perfectly executed soft landing by the [Federal Reserve] are all contributing to the recent rebound in the oil market,” said Tyler Richey, co-editor at Sevens Report Research.

“Sentiment is fragile, however, and if we see any headlines that contradict any of those factors that have supported the latest rally, or even just an uptick in broad market volatility into the end of the quarter, we could see oil markets correct back towards the mid-$70-a-barrel range,” he told MarketWatch.

Also, click here to view the full MarketWatch article published on June 18th, 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.

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Market Multiple Chart: Multiple Expansion Lifts Scenario Targets

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What’s in Today’s Report:

  • MMT Chart:  Multiple Expansion Lifts Scenario Targets

Futures are solidly higher thanks to a surprise rate cut from the SNB and despite worsening geo-political tensions.

The Swiss National Bank surprisingly cut rates 25 bps, citing easing inflation pressures, as the global rate cut cycle gets underway.

Geo-politically, the leader of Hezbollah threatened Israel with war, underscoring rising tensions between Israel and Lebanon.

Today will be a moderately busy day of data and news.  First, there is a Bank of England Rate Decision and while no change in rates is expected, the BOE may signal it’s ready to cut rates in the next meeting or two.

Economically, there are two important reports today: Jobless Claims (E: 235K) and Philly Fed (E: 5.2).  Given the recent data showing a loss of momentum in economic growth, investors will want to see better than expected readings (while soft readings will strengthen the narrative for slowing growth).

Finally, the parade of Fed speakers continues this week with Kashkari (8:45 a.m. ET) and Barkin (4:00 p.m. ET) but unless one of them openly discuss rate hikes, they shouldn’t move markets.

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Investors might be getting a little more nervous around growth

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Investors might be getting a little more nervous around growth: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Market Had Another Great Week—but Trouble Still Lurks

In fact, investors might be getting a little more nervous around growth, wrote Sevens Report President Tom Essaye on Friday.

“To be clear, I’m not saying a slowdown is upon us and I’m not saying that the economic expansion is ending. Growth is still solid. What I am saying is that the market calculus…may be changing a bit at the margin,” Essaye wrote.

Also, click here to view the full Barron’s article published on June 14th, 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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The consumer sentiment reading will be the inflation data in that report

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The consumer sentiment reading will be the inflation data in that report: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stocks Open Lower. S&P 500 and Nasdaq Pull Back From Record Highs.

“But, more important than the consumer sentiment reading will be the inflation data in that report,” writes Sevens Report Research’s Tom Essaye. “Markets will want to see stable consumer sentiment and better than expected inflation readings to rally.”

Also, click here to view the full Barron’s article published on June 14th, 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.

Evidence That Investors Are Starting to Worry About Growth

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What’s in Today’s Report:

  • Evidence That Investors Are Starting to Worry About Growth

Futures are moderately lower despite a slightly dovish Bank of Japan decision and more strong tech earnings (ADBE), as growing political anxiety in Europe weighed on markets.

French stocks dropped another 1% (down 5% on the week) on growing political uncertainty and that’s weighing on European markets and U.S. futures.

Today focus will remain on economic data and the notable report is the University of Michigan Consumer Sentiment Index (E: 73.0).  But, more important than the consumer sentiment reading will be the inflation data in that report (1-Year Inflation Expectations E: 3.2%, Five-Year Inflation Expectations E: 3.0%) and markets will want to see stable consumer sentiment and better than expected inflation readings to rally.

We also have two Fed speakers today, Goolsbee (2:00 p.m. ET) and Cook (7:00 p.m. ET)., but they shouldn’t move markets.

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What the Good CPI and Mixed Fed Message Means for Markets

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What the Good CPI and Mixed Fed Message Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Yesterday’s Good CPI and Mixed Fed Messaging Means for Markets

Futures are little changed despite more positive tech earnings as markets digest Wednesday’s CPI driven rally.

Broadcom (AVGO) became the latest AI-linked tech company (after AAPL and ORCL) to post strong earnings as the stock is up 14% pre-market.

Economically, it was a mostly quiet night as EU Industrial Production slightly missed estimates (-0.1% vs. (E) 0.1%) but that isn’t moving markets.

Today focus will remain on economic data and the two notable reports are Jobless Claims (222k) and PPI (E: 0.1% m/m, 2.5% y/y).  Of the two, PPI is more important and if it is lower than expected that’ll strengthen the belief in disinflation and increase September rate cut expectations, and stocks should extend yesterday’s rally.

Additionally, we do get one Fed speaker today, Williams at 12:00 p.m. ET, and he is part of leadership so his commentary on rate cuts could move markets.

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