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It’s not structurally the most important stock in the market

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It’s not structurally the most important stock in the market: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Why Nvidia Is the Market’s Most Important Stock

“Nvidia is the most important stock because people have decided it’s the most important stock,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview. “It’s not structurally the most important stock in the market—their business focus is very, very slim. They just happen to be the tip of the spear of what people are convinced will be the next tech revolution.”

AI is important because the market expects AI to boost corporate profitability in the coming decades,” Essaye says. “And the whole second step of this entire thing is the uptake of AI and how it actually makes money. Nvidia is the picks and shovels of the gold mine. But people will only buy the picks and shovels if they can actually find gold, right?”

Also, click here to view the full Barron’s article published on August 27th, 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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Tech Weakness Amid Bullish Investor Sentiment

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Tech Weakness Amid Bullish Investor Sentiment: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Was Tech So Weak Yesterday?
  • How Bullish Is Investor Sentiment? (Very Bullish)
  • Chart – A Concerning Pattern in the SOX

U.S. stock futures are little changed this morning after a mostly quiet night of news as investors look ahead to NVDA earnings tomorrow.

Economically, German GDP rose to 0.0% vs. (E) -0.1% while the German GfK Consumer Climate Index fell to -22.0 vs. (E) -17.9, both of which are reinforcing growth concerns for the Eurozone right now.

Today, there are multiple economic releases to watch including the Case-Shiller Home Price Index (E: 6.9%), FHFA House Price Index (E: 5.7%), Consumer Confidence (E: 100.1), and the Richmond Fed Manufacturing Index (E: -14.0). Most of the releases are “second tiered” and lesser followed reports but investors will still want to see evidence of stabilizing growth and disinflation trends continuing.

There are no Fed officials scheduled to speak today but there is a 2-Yr Treasury Note auction at 1:00 p.m. ET that could shed light on investor expectations for Fed policy in the months ahead in the wake of Powell’s Jackson Hole commentary. An auction with demand that is “too strong” could rekindle recession fears while an auction that is “too weak” could trigger hawkish money flows.

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Updated Market Outlook

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Updated Market Outlook: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Updated Market Outlook
  • Weekly Market Preview:  Will Powell Confirm A September Rate Cut?
  • Weekly Economic Cheat Sheet:  The First Big Number of August (and It Needs to be Goldilocks)

Futures are little changed following a very quiet weekend of news as investors look ahead to more growth data this week and Powell’s speech on Friday.

There was no notable economic data over the weekend or overnight.

Geopolitically, optimism is continuing to build towards a ceasefire between Israel and Hamas and that’s weighing on oil prices, although nothing formal has been announced.

Today there is only one economic number, Leading Indicators (E: -0.3%), and barring a big surprise that shouldn’t move markets.  There is also one Fed speaker, Waller (9:15 a.m. ET), and he is part of Fed leadership so if he strongly hints at a September rate cut, that should be a mild tailwind for stocks and bonds.

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Semiconductors: Bull vs. Bear Case (Important for the Market)

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Semiconductors: Bull vs. Bear Case: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Semiconductors (SOX): Bull vs. Bear Case

Futures are modestly higher and are extending Thursday’s gains following a mostly quiet night of news.

Most of the early rally this morning is due to momentum from Thursday’s surge in stocks, but Taiwan Semiconductor (TMSC) also gave a positive July revenue update which is boosting tech/AI sentiment and supporting markets.

Geo-politically, a retaliatory attack from Hezbollah and/or Iran on Israel remains imminent and we shouldn’t be shocked if geo-political risks rise over the weekend.

Today there are no notable economic reports nor any Fed speakers so trading should be driven by technical factors and the yen, and as long as the yen doesn’t rally, stocks should be able to hold Thursday’s gains.

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It just reinforces the point that the data isn’t as bad as the market’s reaction

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it just reinforces the point that the data isn’t as bad as the market’s reaction: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Why Did the Stock Market Sell Off? Wall Street Expected a ‘Soft Landing’ But Priced ‘No Landing.’

The apparent impetus for the selloff, a weak jobs report, was by no means the end of the world. The U.S. economy still added 114,000 jobs in July. And on Monday, the Institute for Supply Management’s services PMI came in stronger than expected. Sevens Report Research’s Tom Essaye argues that itself pushes back against the recession narrative that’s starting to trickle through social media and Wall Street commentary.

“It was generally ignored by the market yesterday because they didn’t want to hear it, but that was an important number,” Essaye says. “I think it just reinforces the point that the data isn’t as bad as the market’s reaction over the past two trading days implies. And I think that should give investors some some comfort.”

“The soft landing was always going to be bumpy,” Essaye says. “The market kept saying, ‘we’re achieving a soft landing,’ but it was priced like there was no landing. Now we’re having that disconnect corrected. It’s a long-term positive because it gets us to a sustainable level.

Also, click here to view the full Barron’s article published on August 6th, 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 much of this excessive yen carry trade has been rung out?

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How much of this excessive yen carry trade has been rung out?: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Traders Seek Refuge in Bonds Amid Market Volatility

“I think the big question for the market in the short term is how much of this excessive yen carry trade, leveraged long bets, has been rung out by the last couple days, or really the last two weeks,” Sevens Report Research’s Tom Essaye tells Barron’s. “I think it’s, unfortunately, very hard to tell.”

Also, click here to view the full Barron’s article published on August 6th, 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.

 

Market Multiple Table: All About Growth

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Market Multiple Table: All About Growth: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – All About Growth
  • Chart – Semiconductor Stocks Bounce, But Long Term Technicals Deteriorate

Stock futures are tracking global equity markets higher as traders shrug off an earnings miss from AI-proxy SMCI (stock down 14% pre-market) and instead focus on a pullback in the yen and sharp drop in the VIX.

Economically, German Industrial Production rose 1.4% vs. (E) 1.0%, further easing global recession worries.

Today, there is one second-tiered economic report due to be released in the afternoon: Consumer Credit (E: $10.0B) but the data is unlikely to move markets.

There are no Fed officials scheduled to speak today but there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. Auction results that are strong could bolster recession worries while a weak auction could rekindle “higher for longer” policy rate worries.

Finally, earnings season continues to wind down with only a few notable reports today including: DIS ($1.20), CVS ($1.74), LYFT ($0.19).

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Futures are plunging globally on snowballing concerns about economic growth

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Futures are plunging globally on snowballing concerns about economic growth: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

U.S. Stock Futures Plunging in Perfect Storm for Market Selloff

“Futures are plunging globally on snowballing concerns about economic growth following Friday’s soft jobs report,” said Tom Essaye, founder of Sevens Report research. “Global growth concerns are the main reason behind the stock weakness but technical factors are majorly at play.”

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

We started the landing a couple months ago

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We started the landing a couple months ago: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Market Is Finally Paying Attention to Slowing Growth. That Doesn’t Mean We’re Headed for a Recession.

Sevens Report Research’s Tom Essaye argues the latest data doesn’t rule out a soft landing, though some market participants had until recently ruled out a hard landing.

“We started the landing a couple months ago,” Essaye says. “It’s no different than when you’re on an actual plane. Sometimes the plane descends more quickly than other times, but that doesn’t mean that you’re crashing.”

Essaye argues summer jobs numbers are generally volatile, so he doesn’t expect the Fed to start panicking. He also notes other economic metrics like retail sales and durable goods, while slowing, are not showing extreme weakness. On the flip side, he thinks a market that had been oblivious to slowing growth could show signs of weakness in the coming weeks.

“The data was not that bad,” Essaye says. “The fact that the S&P 500 is down two and a half percent is more a function of the market’s complacency toward this risk, rather than it is the risk actually becoming substantially greater.”

Also, click here to view the full Barron’s article published on August 2nd, 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.

Helped rekindle a bid in the AI-trade

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Helped rekindle a bid in the AI-trade: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Fed Rate Cut Hopes Aren’t Enough. What’s Moving the Stock Market Now.

“Better-than-expected corporate earnings from domestic chip giant AMD [Advanced Micro Devices] helped rekindle a bid in the AI-trade,” writes Sevens Report’s Tom Essaye. 

Also, click here to view the full Barron’s article published on August 1st, 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.