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Can Stocks Go Back-to-Back-to-Back?

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Can Stocks Go Back-to-Back-to-Back?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Can Stocks Go Back-to-Back-to-Back?
  • Why CPI Was An Important Positive for Markets
  • EIA Analysis and Oil Market Update

Futures are modestly higher thanks mostly to solid earnings and guidance from Taiwan Semiconductor (TSM).

For AI related tech companies, guidance will be key this earnings season and TSM posted better than expected revenue guidance and the stock is up 5% pre-market.

Economic data overnight largely met expectations.

Today will be a busy day of notable economic data and earnings.  On the economy, we get several important reports today including, in order of importance, Retail Sales (E: 0.5%), Jobless Claims (E: 214K), Philly Fed (E: -8.0) and the Housing Market Index (E: 46).  As has been the case, data that meets or slightly misses expectations is the “best” case for markets (while very strong data will boost yields and pressure stocks).

On earnings, the Q4 reporting season is just starting to ramp up and some important results we’re watching today include BAC ($0.77), MS ($1.65), UNH ($6.71), JBHT ($1.63).

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MMT Chart: Bearish Revisions and Building Technical Risks

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MMT Chart: Bearish Revisions and Building Technical Risks: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • MMT Chart – Bearish Revisions and Building Technical Risks
  • PPI Takeaways – Favorably, No Hawkish Surprise

Futures are higher with European shares led by U.K. stocks thanks to more “cooler-than-feared” inflation data released overnight.

Economically, U.K. Core CPI fell 0.3% to 3.2% vs. (E) 3.4% in December, favorably matching a 3+ year low. In the wake of yesterday’s lower than expected U.S. PPI report, we are seeing some recent hawkish money flows unwind and a tentative risk-on tone in the pre-market.

Today is lining up to be very busy with arguably the most important economic data of the week due out before the bell: CPI (E: 0.3% m/m, 2.9% y/y) and Core CPI (E: 0.2% m/m, 3.3% y/y). The Empire State Manufacturing Index will also be released at 8:30 a.m. ET (E: 1.0).

Fed speak also picks up materially today with multiple speakers scheduled to offer commentary over the course of the session including: Barkin (8:00 a.m. ET), Kashkari (10:00 a.m. ET), Williams (11:00 a.m. ET), and Goolsbee (11:00 a.m. ET).

Finally, today is the unofficial start to earnings season as well with big banks due to release Q4 results this morning. Noteworthy financial behemoths reporting before the bell include: JPM ($4.02), C ($1.25), BLK ($11.44), WFC ($1.34), and GS ($7.99).

Bottom line, in order for stocks to continue to stabilize near current levels, investors will want to see “cool” CPI data, less hawkish Fed speak, and solid big bank earnings. If any of those catalysts disappoint, there is a strong risk the 2025 stock market lows are retested today.

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Market Multiple Table: January Update

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Market Multiple Table: January Update: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – January Update

Futures are higher with global stock markets thanks to easing tariff policy worries and fading geopolitical angst.

After the close yesterday, Bloomberg reported Trump’s economic team is planning gradual tariff increases (2%-5% per month) rather than large, one-time hikes which is easing worries about the immediate impact on both growth and inflation.

Geopolitically, the WSJ reported Israel and Hamas are working on a ceasefire deal that could be finalized as soon as today. If successful, the deal would favorably remove a lingering source of market uncertainty.

Looking into today’s session, trader focus will be on inflation data early with the December PPI report due before the open (E: 0.3% m/m, 3.3% y/y). A “cooler” than expected report would likely trigger a continued relief rally in equity markets amid stabilizing bond yields.

There are no other notable economic reports today, but two Fed officials are scheduled to speak: Schmid (10:00 a.m. ET) and Williams (3:00 p.m. ET), and because hawkish money flows have been a major source of volatility in equities recently, their commentary has the potential to move markets today. A more dovish-leaning tone from both would be the most favorable outcome for equities today.

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Friday’s nonfarm payrolls is the “first big report of the year”

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Friday’s nonfarm payrolls is the “first big report of the year”: Tom Essaye Quoted in Forbes

December Jobs Report: Labor Market Grew Faster Than Expected As Unemployment Clocks In At 4.1%

Friday’s nonfarm payrolls is the “first big report of the year” for the U.S. economy, according to Sevens Report founder Tom Essaye, noting the jobs update is “even more important than it would normally be” given the fork in the road for U.S. monetary policy.

Also, click here to view the full Forbes article published on January 10th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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.

Sevens Report Research founder Tom Essaye Interviewed on Yahoo Finance

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Tom Essaye Interviewed On Yahoo Finance

Trump’s economic policy impact, US dollar: Asking for a Trend

“Sevens Report Research founder Tom Essaye outlines what investors need to know to separate the headlines that matter to the market from the noise.

Also, click here to view the full interview with Yahoo Finance published on January 8th, 2025. 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.

To Pause or Not to Pause? That Is the Fed Question

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To Pause or Not to Pause? That Is the Fed Question: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • To Pause or Not to Pause? That is the Fed Question
  • Weekly Market Preview – Could Inflation Data Reintroduce Rate Hike Possibilities?
  • Weekly Economic Cheat Sheet – Wednesday’s CPI Report in Focus

Futures are tracking global equity markets lower this morning with rate-sensitive small caps and tech shares leading declines as bond yields continue higher on the back of Friday’s “hot” jobs report and new highs in the price of oil.

There were no economic reports overnight, however, the U.S. announced new curbs on AI-chip exports (specifically NVDA chips) which is pressuring mega-cap tech stocks in pre-market trade.

Today, there are a limited number of market catalysts as there are no noteworthy U.S. economic reports on the calendar and no Fed officials are scheduled to speak.

There are two Treasury auctions at 11:30 a.m. ET today (for 3-Month and 6-Month Bills) and given the hawkish reaction to Friday’s jobs data, their outcomes could impact stocks. Bottom line, if Treasury yields hold pre-market levels with the 10-Yr and 30-Yr both approaching 5%, stocks will have a very difficult time stabilizing today.

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Jobs Day (Abbreviated Jobs Report Preview)

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Jobs Day (Abbreviated Jobs Report Preview): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Day (Abbreviated Jobs Report Preview)
  • Are the Global Bond Markets Punishing the UK?

Futures are little changed as none of the economic data or central bank speak of the past 48 hours was impactful, so investors are focused on today’s jobs report it’s potential to move markets, especially if it’s “Too Hot.”

Economically, Euro Zone retail sales missed expectations, adding another lack luster data point to the growing list.

Today the major event is the jobs report and stakes for stocks are clear:  If this report is “Too Hot” and boosts fears the Fed has paused rate cuts, it’ll cause yields to rise and hit stocks, potentially hard.

Expectations for the report are as follows: 164K Job-Adds, 4.2% Unemployment Rate, 4.0% y/y Wage Growth.   An in-line to slightly weak number vs. expectations is the best-case scenario for markets this morning:

In addition to the jobs report we also get Consumer Sentiment (E: 74.5) and some notable earnings from DAL ($1.76), WBA ($0.37) and STZ ($3.34), but today is really all about the jobs report.

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This Is The Type Of Political Chaos Markets Fear

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This Is The Type Of Political Chaos Markets Fear: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Magnificent 7 Stocks Are Rising to End a Rough Week

Tom Essaye, founder of the Sevens Report, wrote on Friday that stocks weren’t down “because of the shutdown itself, but instead because this is the type of political chaos markets fear in a second Trump term.”

Also, click here to view the full Barron’s article published on December 20th, 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 Fed Provided A Legitimate Surprise

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The Fed Provided A Legitimate Surprise: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Stock Market Needed a Washout. What Sentiment Says About What Comes Next.

The Sevens Report’s Tom Essaye notes that two things in particular caught investors offside. First, the shift to fewer rate cuts in 2025 means that the Fed will be less of a force for good in the market than it was heading into the meeting. The language of the statement also changed in a way that suggested rate cuts could be off the table completely next year. “Bottom line, the Fed provided a legitimate surprise,” he writes.

Also, click here to view the full Barron’s article published on December 20th, 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.

Jobs Report Preview (Markets Closed Tomorrow)

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Jobs Report Preview (Markets Closed Tomorrow): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview
  • ISM Services PMI Takeaways – Strong Data Supports Hawkish Fed Stance
  • Chart – JOLTS Jump to Multi-Month High But Still Trending Lower

Futures were slightly higher earlier this morning as traders digested disappointing data out of Europe but volatility has picked up since CNN reported that Trump is weighing emergency measures to implement new tariffs programs.

Economically, German Manufacturing Orders plunged -5.4% vs. (E) 0.0% while EU Economic Sentiment fell 93.7 vs. (E) 95.7 and Eurozone PPI declined just -1.2% vs. (E) -2.5%.

Today, traders are likely to remain keenly focused on the early tariff headlines that have roiled futures in the pre-market. Any commentary from Trump that tamps down concerns about aggressive tariffs and the threat of global trade wars will help settle markets over the course of the day.

Additionally, there are two key labor market reports to watch today, the ADP Employment Report (E: 134K), and Jobless Claims (E: 216K). After yesterday’s “hot” ISM and JOLTS data, investors will want to see a return to “Goldilocks” data consistent with a cooling labor market to help temper the recent spike in yields and help stocks stabilize.

Finally, there is one Fed speaker early in the day: Waller (8:30 a.m. ET) and a 30-Yr Treasury Bond auction in the early afternoon (1:00 p.m. ET) that cold move yields, and in turn, impact equity markets (strong demand for the long bonds is the best outcome for stocks).

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.