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Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview

Futures are mixed as continued weakness in chip and AI-related stocks offsets Wednesday’s post-election rally.

Oil prices are rebounding amid rising uncertainty surrounding the war with Iran.

Today focus will be on Jobless Claims (E: 196K) and Productivity & Costs (E: 3.0%, 1.1%). These will provide another look at labor-market conditions and wage pressures ahead of Friday’s jobs report.

Finally, we have 4- & 8-Week Treasury bill auctions at 11:30 a.m. ET, while Fed speakers include Hammack (8:50 a.m. ET), Barkin (9:10 a.m. ET), and Logan (7:00 p.m. ET). Earnings today include COP ($3.06), SONY ($0.38), MNST ($0.30), ABNB ($2.86), and DUK ($1.87).

 

Alpha Webinar Today at 1:30 p.m. ET: Is AI’s Pullback a Warning or a Buying Opportunity?

The latest earnings season sparked renewed concerns about AI spending, data center profitability and the availability of financing, helping push the Nasdaq more than 10% below its highs.

But is this simply a case of lofty expectations catching up with reality, or are we seeing signs of a more serious problem?

That’s what I’ll examine in today’s live Sevens Report Alpha webinar at 1:30 p.m. ET.

I’ll review the latest AI earnings, assess funding conditions and identify the upcoming events that could either deepen the selloff or create another buying opportunity.

Subscribers will also receive the full slide deck and recording, which can be used immediately in client conversations.

Click here to learn more about today’s Alpha webinar and how to attend.

What the Election Results Mean for Markets

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What’s in Today’s Report:

  • What the Election Results Mean for Markets

Futures are sharply higher as Democrats met pre-election expectations and won solid majorities in the House and Senate.

“Blue Wave” predictions were realized on Election Night, although Democrats failed to win 2/3 majorities in either chamber, creating a divided government and likely policy gridlock (which is historically positive for markets and the reason futures are higher).

With the election behind markets, focus will return to geopolitics (more U.S./Iran diplomatic progress?) and economic data and there are two important reports today: ADP Employment Report (E: 70K), ISM Services PMI (E: 54.7).  Goldilocks readings that met expectations (including in the ISM Services Prices Index) will be the best case scenario for stocks.

Finally, earnings season continues a few more days (practically speaking) and some reports we’re watching today include: ARM ($0.22), MCD ($3.36), NVO ($0.81), QCOM ($1.46), UBER ($0.94), CVS ($1.62), and DDOG ($0.18).

 

Final Election Preview (Scenarios & Key Races to Watch)

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What’s in Today’s Report:

  • Final Election Preview (Scenarios & Key Reaces to Watch)

Futures are slightly lower on a rebound in oil and following more disappointing tech earnings.

The U.S. struck Iran’s Qeshm Island overnight in a “small, defensive” attack and oil prices are up 2% as a result, although the operation hasn’t derailed current diplomatic progress.

On earnings, AAPL (-3% pre-open) and PLTR (-8% pre-open) both had underwhelming results, extending tech weakness (the key remains whether the “rest” of the market can hold up despite tech declines and so far, it has).

Today focus will remain primarily on geopolitics and any additional reports of progress between the U.S. and Iran will pressure oil and should further support stocks (especially the “rest” of the market).

Away from geopolitics, we do get one notable economic report, JOLTS (E: 7.134 million) and the closer to the consensus estimate, the better.

Finally, earnings season continues and that includes more important tech results.  Reports we’re watching today include AMD ($1.68), AMGN ($5.74), SHOP ($0.33), PFE ($0.72), MPC ($25.74), BKNG ($4.48).

 

Mid-Term Election Preview: What It Means for Markets

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What’s in Today’s Report:

  • Mid-Term Election Preview: What It Means for Markets
  • Understanding Why A Falling 10 Year Yield Hasn’t Been Positive for Stocks
  • Weekly Market Preview: A Critical Week for AI/Tech (Key Earnings Reports)
  • Weekly Economic Cheat Sheet: FOMC Decision Wednesday, Inflation Thursday

Futures are slightly higher as markets on a decline in oil prices and following a mostly quiet weekend of news.

Officials from numerous Gulf states will be in Tehran this week and that is raising some hope of diplomatic progress between the U.S. and Iran and that’s pressuring oil prices.

On tech, AI sentiment took another hit over the weekend as Elon Musk warned hundreds of neo-clouds will fail (although the warning was general and not specific).

Economically the only notable report was German Ifo Business Expectations when beat estimates (91.6 vs. (E) 90.2).

This week has a lot of potential market moving catalysts with a Fed decision, key inflation report and critical AI earnings, but those come later in the week and today there are no notable economic reports. So, geopolitical headlines and AI sentiment should drive trading today ahead of the key events later this week.

Some notable earnings today include: VZ ($1.27), WELL ($1.64), CDNS ($1.61), NUE ($5.71).

 

What the Trump Victory Means for Markets

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What the Trump Victory Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Trump Victory (and likely Republican Sweep) Means for Markets

Futures are surging more than 2% as Donald Trump soundly defeated Kamala Harris, Republicans flipped the Senate and will likely win the House of Representatives, completing the sweep and taking control of Washington.

Markets are moving sharply on the expected Republican sweep, as the Dollar Index is 1.7% higher, the 10-year Treasury yield jumps 17 bps and oil falls more than 1%.

Away from the U.S., German Manufacturers’ Orders and Euro Zone Composite PMIs were stronger than expected.

Today most of the analysis and commentary will focus on the implications of the likely Republican sweep, but there is also an important economic report out this morning: the November Flash Composite PMI (E: 54.3).  That number needs to stay Goldilocks to keep growth and Fed rate cut expectations intact (and now that the election is behind us, those growth and rate cuts will again drive markets).

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This political shake-up shouldn’t materially alter the direction of the markets

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This political shake-up shouldn’t materially alter the direction of the markets: Tom Essaye Quoted on BNN Bloomberg

Markets today: dip buyers wade back in to drive Wall Street gains

“This political shake-up shouldn’t materially alter the direction of the markets,” said Tom Essaye at The Sevens Report. “The ultimate direction of the S&P 500 will still be determined by economic growth.”

Also, click here to view the full BNN Bloomberg article published on July 22nd, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Examining the Market Impacts of Thursday’s Debate

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Examining the Market Impacts of Thursday’s Debate: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Examining the Market Impacts of Thursday’s Debate (What Happens If Biden’s Replaced?)
  • Weekly Market Preview:  Will Economic Data Keep Growth Concerns At Bay?
  • Weekly Economic Cheat Sheet:  Jobs Report Friday, ISM PMIs Today and Wednesday.

Futures are slightly higher ahead of a busy and holiday-shortened week of data, as French election results weren’t as bad as feared while global economic data was mixed.

National Rally slightly underperformed in the first round of voting in the French election and the other major parties have agreed to form a coalition to prevent it from becoming an outright majority, reducing French political risks.

Economically, EU and UK May Manufacturing PMIs were mixed but importantly didn’t raise any growth concerns.

This is a busy and important week for economic data as the reports will either increase growth concerns or push back on them.  Today the key report is the ISM Manufacturing PMI (E: 49.1) and the stronger this number, the better for markets.

Sevens Report Quarterly Letter Delivered Today!

Our Q2 ’24 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

  • Save time (an average of 4-6 hours per quarterly letter)
  • Show you’re on top of markets with impressive, compelling market analysis.

You can view our Q1 ’24 Quarterly Letter here.

To learn more about the product (including price) please click this link.

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How and Why The French Election Could Impact Markets

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How and Why The French Election Could Impact Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • How and Why The French Election Could Impact Markets

Futures are modestly higher despite more weak earnings (NKE), as last night’s debate is seen as boosting Trump’s chances to win the election.

President Biden’s performance at last night’s debate raised further concerns about his mental and physical stamina and hurt his re-election chances.  The net result is markets are rallying on Trump’s improved chances to win, as markets generally prefer Republican candidates due to pro-business policies (although actual results are mixed).

Today focus shifts back to data and the key report is the Core PCE Price Index (E: 0.1% m/m, 2.6% y/y).   Markets will want to see it confirm the good CPI numbers from earlier in the month (meaning at or below estimates) and if that occurs, it should extend this early rally.

There are also two Fed speakers today, Bowman (12:00 p.m. ET) and Daly (12:40 p.m. ET), but neither should move markets.

Sevens Report Q2 ’24 Quarterly Letter Coming July 1st. 

The Q2 2024 Quarterly Letter will be delivered to advisor subscribers on Monday, July 1st.

We will deliver the letter on the 1st business day of the new quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q1 ’24 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

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.

Which Sectors Benefit From Trump’s Policies

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Which Sectors Benefit From Trump’s Policies: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Government Shutdown Update
  • Which Sectors Benefit From Trump’s Policies
  • “Short-Volatility Trade” Update: Chart

Futures are little changed this morning as investors digest a hotter than expected inflation print out of Japan and still cautious gauge of consumer sentiment in Europe ahead of a busy day of economic data in the U.S.

Overnight, Japanese Core CPI fell to 3.5% vs. (E) 3.3% while the German GfK Consumer Climate Index edged up by a modest 0.7 points to -29.0 vs. (E) -29.6. Neither release was particularly positive for markets but futures are stable ahead of today’s domestic data.

Looking into today’s session, there are four economic reports to watch this morning: Durable Goods Orders (E: -4.5%), Case-Shiller Home Price Index (E: 0.2%), FHFA House Price Index (E: 0.1%), Consumer Confidence (E: 115.0). Markets will want to see stability in the housing market data and easing but not collapsing growth and sentiment numbers in order for stocks to hold near the recently established record highs.

There are no Fed officials scheduled to speak today but there is a 7-Yr Treasury Note auction at 1:00 p.m. ET. Yesterday’s 2-Yr and 5-Yr Note auctions were weak, putting upward pressure on yields and if today’s 7-Yr auction is weak as well, expect the benchmark 10-Yr yield to test the critical 4.30% level which could weigh on equity markets.

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Election Preview

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What’s in Today’s Report:

  • Election Preview
  • Chart: Technicals Dominate S&P 500 Price Action – Key Levels to Watch

Stock futures are slightly higher and Treasury yields are largely steady ahead of today’s midterm elections.

Economically, the U.S. NFIB Small Business Optimism Index came in at 91.3 vs. (E) 91.8 while Eurozone Retail Sales met estimates at 0.4% but neither release is materially impacting markets this morning.

There are no additional economic reports today and no Fed officials are scheduled to speak.

In Monday’s Sevens Report we incorrectly said CPI was to be released on Wednesday but the report is due out on Thursday. We apologize for any confusion this may have caused.

Bottom line, focus will be on the midterms today which will likely result in a mostly quiet session, however, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET that could cause a move in yields and ultimately impact trading in equities.