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Why Stocks Dropped/What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • Why Stocks Dropped/What the Fed Decision Means for Markets

Futures are bouncing modestly on solid MSFT earnings and on a slight decline in oil prices.

Microsoft posted strong earnings and guidance (MSFT up 10% pre-market) and that’s helping to stabilize broader tech this morning.

Geopolitically, the U.S. struck Iran overnight but didn’t signal dramatic escalation so oil prices are down 1%.

Today is another busy day in the market with potentially important updates from economic data, geopolitics and earnings.

Economically, the key report is the Core PCE Price Index (E: 0.2% m/m, 3.3% y/y) and if that’s a “hot” number we’ll see yields rise further and pressure stocks.  Other notable economic data today includes Advanced Q2 GDP (E: 2.3%) and Jobless Claims (E: 205K),.

On earnings, we get two more major tech names reporting via AAPL ($1.88) and AMZN ($1.82) while MA ($4.77) will give us insight into consumer spending.  Across the board, the better the earnings, the better for markets.

Finally, on geopolitics, any hint of ceasefire progress should pressure oil prices which would be a general positive for markets.

 

Today’s Alpha Webinar: Updating the Bullish/Bearish Setup for this Market

Markets are at an important inflection point. AI leadership is being questioned, the Fed’s path into 2026 remains uncertain, inflation data continues to surprise, and earnings season is testing investor confidence.

The key question is whether this recent pullback is simply a healthy pause within an ongoing bull market or the beginning of a more meaningful shift in trend.

In this afternoon’s Alpha webinar (1:30 p.m. ET), we’ll connect these developments into a clear bullish and bearish framework, explain what we’re watching most closely, and discuss the implications for portfolio positioning and client conversations.

If you’re looking for a deeper analysis beyond the daily Sevens Report—including actionable investment ideas, client-ready slide decks, and timely thematic research—click below to learn more about Alpha and join us live this afternoon.

Sevens Report Alpha Webinar

 

Understanding Why OpenAI Concerns Hit the Market

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What’s in Today’s Report:

  • Understanding Why OpenAI Concerns Hit the Market
  • More Non-Confirmation from Treasuries and Oil

Stock futures are little changed ahead of today’s Fed decision and multiple widely anticipated Mag-7 earnings releases.

There were no market moving economic reports overnight and the U.S.-Iran ceasefires talks remains deadlocked.

Today, there are several important economic reports to watch including Durable Goods (E: 0.4%), Housing Starts (1.40M), and International Trade in Goods (E: $-87.8B).

From there, markets are likely to be quiet leading into the conclusion of the April Fed meeting with the FOMC Announcement (2:00 p.m. ET) and Fed Chair Press Conference (2:30 p.m. ET) being the primary focus of today’s session.

After the market close, some of the most important earnings of the season will be released and the results could meaningfully move markets in after-hours trade. Those reporting today include: MSFT ($4.07), AMZN ($1.60), META ($6.71), GOOGL ($2.64), HUM ($9.97), ABBV ($2.62), ADP ($3.28), SOFI ($0.12), QCOM ($1.90).

 

Could Earnings Be More Important than War This Week?

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What’s in Today’s Report:

  • Could Earnings Be More Important than War This Week?
  • Weekly Market Preview: Will Earnings Be Strong Enough to Offset any Geopolitical Disappointment?
  • Weekly Economic Cheat Sheet: Fed Decision on Wednesday (Will They Still Point to Rate Cuts?)

Futures are little changed despite no ceasefire meeting between the U.S. and Iran over the weekend.

There were no additional ceasefire talks over the weekend but markets still view the ceasefire process as ongoing, so the “no meeting news” isn’t hitting stocks.

Economically, the only notable report was German Gfk Consumer Climate and it missed estimates (-33 vs. (E) -30).

This week could be very important for the rally as we have critical earnings, a Fed decision on Wednesday and potential progress on the reopening of the Strait of Hormuz all looming. But, the week starts quietly as there are no notable economic reports today, so any U.S./Iran ceasefire deal headlines should continue to drive markets.

On earnings, this is the most important week of the reporting season (especially Thursday) and some results we’re watching today include: VZ ($1.22), DPZ ($4.29), CLS ($1.98), NUE ($2.79) and UHS ($5.29).

 

What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • What the Fed Decision Means for Markets

Futures are little changed as markets digest yesterday’s Fed decision while rising oil prices keep inflation concerns elevated.

Brent Crude Oil is surging after Iranian strikes hit LNG facilities in Qatar and a refinery in Saudi Arabia, raising fears of a broader energy shock.

Economically, the BOJ held rates steady (0.75%) and warned higher oil prices could boost inflation, but that’s not moving markets.

Today focus will be on Jobless Claims (E: 215K), Philly Fed (E: 5.5), and New Home Sales (E: 728K). Markets will want stable data as higher oil prices add to inflation concerns.

Later, the Treasury will auction 4 & 8-Week Bills (11:30 a.m. ET) and 10-Yr TIPS (1:00 p.m. ET). Earnings today include BABA ($1.73), ACN ($2.86), LUNR ($-0.04), FDX ($4.14), and PL ($-0.13).

 

Updated Market Outlook Post Fed Decision & AI Disappointment (Still Bullish?)

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What’s in Today’s Report:

  • Updated Market Outlook Post Fed Decision & AI Disappointment (Still Bullish?)
  • Weekly Market Preview: Does Data Stay Goldilocks (And Further Fuel RSP over SPY?)
  • Weekly Economic Cheat Sheet: Jobs Report Tomorrow is the Key Event

Futures are solidly higher on rising hopes that Kevin Warsh, not Kevin Hassett, would be the next Fed Chair.

President Trump said that Fed Governor Warsh had moved to the top of his Fed Chir list and that’s positive as markets view Warsh as more independent then Hassett.

Economically, Chinese data disappointed as retail sales, industrial production and Fixed Asset Investment missed estimates.

Today focus will be on economic data via the first data point for December, Empire Manufacturing (10.6).  This is a volatile metric but as long as it’s mostly stable (so no big drop) it shouldn’t weigh on markets.

We also get the Housing Market Index (E: 38) and have two Fed speakers: Miran (9:30 a.m. ET) and Williams (10:30 a.m. ET).  Of the two, Williams is the most important and if he’s dovish, it should help support markets.

 

What the Fed Decision Means for Markets (Bullish Short-Term but Not Long Term)

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What’s in Today’s Report:

  • What the Fed Decision Means for Markets (Bullish Short-Term but Not Long Term)

Futures are moderately lower as disappointing ORCL earnings reversed Wednesday’s post Fed rally.

ORCL posted underwhelming quarterly results (ORCL down –11% pre-market) and did little to reduce fiscal concerns, further stoking AI skepticism and weighing on tech broadly.

Economically, the only notable report overnight was Italian Unemployment which met expectations (6.1%).

Today focus will be on economic data via Initial Jobless Claims (E: 220k) and an in-line number will be generally positive for markets as it implies solid growth.  Beyond economic data, important earnings loom after the close including, in order of importance:  AVGO ($1.49), LULU ($2.22), COST ($4.26) and RH ($2.13).  Solid AVGO earnings to help offset ORCL disappointment would help the market finish the week strong.

 

What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • What the Fed Decision Means for Markets

Futures are moderately higher on more trade optimism.

President Trump posted on social media that he would announce a new trade deal this morning (likely with the UK) and this is driving optimism for more tariff relief.

Economically, the only notable report was German Industrial Production, which beat estimates (3.0% vs. (E) 2.7%).

Today focus will remain on economic data and specifically Jobless Claims (E: 232K), as investors will want to see claims decline from last week’s spike.  If claims continue to rise, that will increase economic anxiety (and likely pressure stocks).  Other economic events today include a BOE Rate Decision (E: 25 bps cut) and U.S. Unit Labor Costs (E: 5.2%), which are an important measure of inflation (and again, the lower this number, the better).

On earnings, the season is virtually over but there are a few notable reports today:  SHOP ($0.17), COP ($2.06),  COIN ($2.04), MELI ($7.67), AFRM ($-0.08).

What the Fed Decision Means for Markets (Near Term vs. Longer Term)

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What the Fed Decision Means for Markets (Near Term vs. Longer Term): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Fed Decision Means for Markets (Near Term vs. Longer Term)

Futures are sharply higher (up nearly 2%) as the Fed’s rate cut sparked a large global stock market rally (most major global indices are 1% – 2% higher).

Economically, there were no notable reports overnight.

Geopolitically, concerns are rising about a direct Israel/Hezbollah war, although investors are ignoring those increased risks, for now.

Today will be another busy day as there are two prominent central bank meetings and important economic data.  First, there is a BOE Rate Decision (E: No change) this morning but, more importantly, there’s a Bank of Japan rate decision late tonight.  The BOJ isn’t expected to raise rates but if they do (like in July) that could inject volatility into the markets (like it did in July).

Economically, there are two especially notable reports today, Jobless Claims (E: 230K) and Philly Fed (E: 2.0), while we also get Existing Home Sales (E: 3.90 million) and Leading Indicators (E: -0.3%).  With the Fed now having cut 50 bps, the stronger the data, the better, as it’ll increase soft landing expectations.

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The major question for tomorrow’s meeting is what do the dots say?

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The major question for tomorrow’s meeting: two or three rate hikes? Tom Essaye Quoted in Barron’s

Dow Turns Higher. Tech Stocks Pull Back.

“I think what we’re seeing today is just a little bit of hedging by investors,” Sevens Report Research’s Essaye told Barron’s in a phone interview.

Essaye says that ahead of the Fed meeting, traders may be looking at defensive stocks on the chance that the Federal Open Market Committee’s March meeting sends stocks lower or pushes yields lower.

“The major question for tomorrow’s meeting is what do the dots say: two or three rate hikes?” Essaye says. “That’s really gonna determine how the market reacts to this meeting.”

“AI enthusiasm has been a major factor in this rally, and as long as nothing else is particularly negative, AI enthusiasm can continue to push markets higher,” Essaye says. “That’s what happened yesterday. Today, we don’t have that sort of new shiny object in AI to focus on, and we have the Fed decision tomorrow.”

Also, click here to view the full Barron’s article published on March 19th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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What the Fed Decision Means for Markets

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What the Fed Decision Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Fed Decision Means for Markets
  • EIA Analysis and Oil Market Update

Futures are moderately higher on momentum from Wednesday’s post-Fed rally while earnings and data were solid overnight.

Economically, Euro Zone Manufacturing PMI was slightly better than expected (43.1 vs. (E ) 43.0).

On earnings, reports were good overnight with solid reports from ALL, CLX, PYPL, QCOM and others.

Today focus will be on economic data and a big earnings report after the close.  Economically, the two notable reports are Jobless Claims (E: 213K) and Unit Labor Costs (E: 0.7%).  Of the two, Unit Labor Costs are the more important number and markets will want to see an in-line or lower reading to imply receding inflation risks.

On the earnings front, there are a lot of reports today, but the highlight is clearly AAPL ($1.39) which reports after the close.  Other notable earnings include SQ ($0.47) and SBUX ($0.97).

Bottom line, if the market gets more Goldilocks data and solid earnings, this relief rally can continue. But if yields start to rise, don’t be shocked if there’s a reversal.

What the Fed Decision Means for Markets

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