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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.

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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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Evidence That Investors Are Starting to Worry About Growth: Start a free trial of The Sevens Report.

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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What’s in Today’s Report: When Does Bad Economic Data Become Bad for Stocks?

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Jobs Day Technical Preview & Wildcards to Watch: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • When Does Bad Economic Data Become Bad for Stocks?
  • Weekly Market Preview:  An Important Week:  Fed Decision (Including the Dots), CPI and AI Updates.
  • Weekly Economic Cheat Sheet:  Do We See Real Movement in Rate Cut Expectations?

Futures are modestly lower as global bond yields rise following surprise political news over the weekend.

Far right political parties outperformed expectations in EU elections while French President Macron called for surprise snap elections.  The results are pushing French and German bond yields higher, which are pulling Treasury yields up in sympathy and weighing slightly on futures.

Outside of the political results, it was a mostly quiet weekend of news as investors look ahead to an important week of AI catalysts, the FOMC decision and the latest CPI report.

This is a busy and important week for markets as it will either confirm current (positive) expectations on Fed rate cuts and inflation or challenge them and increase volatility.  That said, the week starts quietly as there are no notable economic reports today and the key event is likely to be AAPL’s Worldwide Developer Conference keynote announcement, which is focused on AI.  If it’s underwhelming, tech could lag and slightly weigh on markets.

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Jobs Day Technical Preview & Wildcards to Watch

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Jobs Day Technical Preview & Wildcards to Watch: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Technical Preview – S&P 500, 10Y, Gold, VIX (Shareable PDF)
  • Two “Wildcard Scenarios” to Watch for Today
  • Initial Jobless Claims Show Signs of Bottoming: Chart

Futures are flat while international markets were mostly lower overnight as traders await the widely anticipated May jobs report to gauge the outlook for Fed policy.

Economically, Eurozone GDP met estimates in Q1 at 0.4% y/y, however wage growth accelerated to 5.1% y/y in Q1 vs. 4.9% in Q4 after the ECB lowered inflation forecasts yesterday. The “warming” wage inflation data raises concerns the ECB moved to cut rates too early.

Today, focus will be on the May BLS Employment Situation release at 8:30 a.m. ET with an estimated +188K Job Adds, 3.9% Unemployment Rate, and 3.9% Wage Growth. The market needs to see an inline number preferably with a modest downside surprise on wages in order for dovish money flows and soft-landing hopes to continue to drive stocks to new records.

There is also one Fed speaker mid-day today: Cook (12:00 p.m. ET) and Consumer Credit (E: $10.4B) will be released late in the day but neither should more markets with markets digesting the jobs report.

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Recent data have traders worried that the economy is slowing

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Recent data have traders worried that the economy is slowing: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stocks Are Slipping. The Market Can’t Find Middle Ground.

Recent data have traders worried that the economy is slowing more than people think, Sevens Report Research’s Tom Essaye tells Barron’s. He notes that if the economy slows too much, the question becomes whether rate cuts in September and December would be enough to turn things around.

“The market can’t ever find the middle,” Essaye says.

He says that sentiment has bounced back and forth between worries about hot inflation to worries that the Federal Reserve won’t be able to navigate a slowing economy. Essaye thinks the pullback in stocks can be chalked up to already-high valuations.

“It’s not that things have suddenly turned bad,” says Essaye. “It’s that we’re priced for a very still-perfect environment, and the data is implying it’s maybe not so perfect.”

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

The data is starting to show a potential soft landing

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The data is starting to show a potential soft landing: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Only Two S&P 500 Sectors Are Rising

Sevens Report Research’s Tom Essaye told Barron’s the data is starting to show a potential soft landing, though where it goes from here is anyone’s guess.

“A soft landing was always a slowing of growth that sort of didn’t get too bad,” Essaye says. “So it appears we are kind of arriving at that point. Now, the issue is that every hard landing started with a soft landing. You don’t just jump from growth to contraction.”

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

A bearish-leaning reality that OPEC+

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A  bearish-leaning reality that OPEC+: Sevens Report co-editor Tyler Richey Quoted in MarketWatch

Oil futures settle at lowest since early February

The market’s bullish hopes for some degree of commitment to ‘price stability’ via the potential for further production cuts were dashed, and instead met with a bearish-leaning reality that OPEC+ does not seem willing to cut production any further than they already have despite ongoing recession risks that would cripple demand,” said Tyler Richey, co-editor at Sevens Report Research.

Also, click here to view the full MarketWatch article published on June 3rd, 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.

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.

A Concerning Divergence in Bond Markets

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A Concerning Divergence in Bond Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Is the Smart Market Telling Us? (Part II)
  • JOLTS Data Takeaways – Normalizing or Rolling Over?
  • Chart: JOLTS Fall Below Pre-Pandemic Trend Path

Futures are tracking European markets higher this morning on the back of “goldilocks” growth and inflation data overnight ahead of more key domestic economic data today.

Economically, China’s May Composite PMI handily beat estimates at 54.1 vs. (E) 52.7 which was a welcomed print as Chinese data has been underwhelming recently.

In Europe, the Eurozone Composite PMI rose to 52.2 vs. (E) 52.3 while April PPI fell -1.0% m/m vs. (E) -0.5%. Stabilizing growth numbers and evidence of further disinflation are exactly what the ECB want to see ahead of their first rate cut as it helps shore up the soft-landing argument.

Looking into today’s session, there are no Fed officials scheduled to speak but two important economic reports on the calendar. First, the May ADP Employment Report (E: 173K) will be released pre-market and second, the ISM Services Index (E: 50.7) is due out a half hour after the opening bell.

Investors will want to see a labor market print that is close to estimates. A number too strong will push back on the recent dovish money flows while a weak number will add to recession worries. With the ISM, a steady number above 50 with cooling price indices would be the best case scenario for risk assets leading into the jobs report Friday.

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