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Have Bond Yields Peaked?

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What’s in Today’s Report:

  • Are Stocks Starting to Signal Bond Yields Have Peaked?
  • Growth Is Beginning to Outperform Value; Will It Last?
  • Oil Tumbles Through Technical Trend Support: Chart

Futures are flat while international markets were mixed overnight as investors continue to weigh recession fears against a slightly less hawkish shift in monetary policy expectations.

The 10s-2s yield curve spread notably inverted overnight as the odds of a recession in the quarters ahead continue to rise.

Economically, Eurozone Retail Sales edged up just 0.2% vs. (E) 0.4% in May which was the latest data point to show a slowdown in consumer spending amid high inflation, further compounding worries about global growth.

Looking into today’s session, there is one Fed speaker ahead of the bell (Williams at 9:00 a.m. ET) and the focus will be on economic data with the ISM Services Index (E: 54.8) and JOLTS (E: 11.250M) both due out shortly after the open.

The market will want to see a continued moderation in growth to show the Fed’s policy actions are working to slow demand, but not too weak to suggest we are quickly fading into a recession.

From there, the focus will shift to the release of the June FOMC Meeting Minutes at 2:00 p.m. ET as investors look for new insight into the Fed’s view of the economy and potential clues as to whether we have reached “peak hawkishness” yet, or not. If there is evidence peak hawkishness is behind us, yesterday’s risk-on money flows could continue today.

Are Stocks Pricing in an Economic Contraction?

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What’s in Today’s Report:

  • Bottom Line – Are Stocks Pricing in an Economic Contraction?
  • Weekly Economic Cheat Sheet – Is Stagflation Imminent?

Stock futures are trading modestly lower with European markets this morning as recession fears continue to weigh on sentiment.

Economically, global Composite PMI data was better than feared but broader concerns of a slowdown remain.

Today, investor focus will be on economic data early with Motor Vehicle Sales (E: 13.5M) and Factory Orders (E: 0.5%) both due out before the opening bell.

There are no Fed officials scheduled to speak today but the Treasury will hold auctions for 3-Month and 6-Month Bills at 11:30 a.m. ET which may move bond markets and ultimately move equities.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on June 27th, 2022

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Oil prices end higher for a second session as better-than-expected U.S. economic data ease demand worries

Economic data last week was pretty dismal and weighed on energy products and commodities broadly, but Monday’s numbers came in better than expected — providing support for oil…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on April 15th, 2022

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U.S. natural gas is trading at an ‘insane’ price — Here’s why it just hit a nearly 14-year high

The catalyst behind this week’s rally in natural gas has been a “late season blast of cold weather making its way across the country,” boosting demand for heating in many parts of the nation… said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on March 17, 2022

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Oil futures finish higher to climb back above $100 a barrel

Upwards of 3 million barrels a day in Russian oil supply could be lost in the coming weeks, and “fading optimism” for a ceasefire deal between Russia and Ukraine drove gains for oil Thursday, said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted by MarketWatch on January 27, 2022

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Why natural-gas futures logged their biggest one-day percent gain on record

Physical demand is so high with this looming storm in the Northeast that the February futures contract got piled into for those looking to reload stockpiles they expect to offload…explained Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

 

Sevens Report Co-Editor Tyler Richey Quoted by MarketWatch on January 27, 2022

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Natural-gas futures jump by more than 46%; oil settles lower

The 219 billion-cubic-foot weekly fall in U.S. supplies of the fuel reported by the Energy Information Administration Thursday leaves stockpiles more than 10% below last year’s levels…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on December 1, 2021

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Oil prices settle lower as U.S. reports its first case of the omicron variant of coronavirus

Omicron is causing significant volatility in the energy complex as the impact on demand is not yet known…analysts at Sevens Report Research wrote in Wednesday’s newsletter. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on September 27, 2021

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Oil prices at a nearly 3-year high as natural-gas futures jump 11%

From a futures market standpoint, bullish energy calls from big banks including Goldman Sachs and major oil traders like…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • A Historic Quarter for the Energy Markets

Stock futures are trading modestly lower this morning after the S&P 500 registered its best quarterly gain in over 20 years in Q2 while economic data was mostly better than expected overnight.

Economically, China’s Caixin Manufacturing PMI firmed to 51.2 in June from 50.7 in May while the Eurozone Manufacturing PMI rose to 47.4 from 39.4 in May pointing to a continued rebound in economic activity last month.

Today, we will get our first look at June jobs data with the ADP Employment Report (E: 3.500M) due out ahead of the bell while the ISM Manufacturing Index (E: 49.0) and Construction Spending (E: 0.8%) will both be released shortly after the open.

Later in the day, the only real catalyst to watch for is the release of the latest FOMC Meeting Minutes at  2:30 p.m. ET as traders will be looking for any additional insight into the Fed’s future stimulus plans or view of the state of the economy.