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Watch the BLS Revisions Today

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Watch the BLS Revisions Today: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Something to Watch Today: BLS Revisions
  • How a Fed Mistake Would Impact Commodities
  • VIX Expiration Poses Threat to Short-Volatility Trade – Chart

Futures are slightly higher as traders await job growth revisions from the BLS after a mostly quiet night of news.

Economically, Japanese trade data revealed a deeper than anticipated deficit in July but amid solid import/export growth numbers which importantly helped pause a rally in the yen and reduced pressure on risk assets overnight.

Looking into today’s session, there are no typical economic reports on the calendar, however, the BLS Revisions to Net Payroll Growth for the trailing 12-months through March 2024 will be released at 10:00 a.m. ET and a significant downward revision could rekindle the recession fears initially sparked by the July jobs report which would result in broad market volatility.

In the afternoon, there is a 20-Yr Bond auction at 1:00 p.m. ET which could move yields and influence equity markets before investor focus will turn to the release of the July FOMC Meeting Minutes at 2:00 p.m. ET.

Finally, earnings season continues to wind down but a few notable companies reporting today include: TGT ($2.17), TJX $0.92), ZM ($1.21).

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The Most Important Central Banker This Week (Not Powell)

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The Most Important Central Banker This Week (Not Powell): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Most Important Central Banker This Week (Not Powell)

Futures are slightly higher on better than feared tech earnings and more global central bank rate cuts.

Palo Alto Networks (PANW) posted solid guidance and that, along with CSCO results last week, is helping to bolster the outlook for tech and that’s supporting futures.

Sweden’s Riksbank (their central bank) cut rates 25 bps, as expected, and that reminded investors we are in the midst of a global rate cutting campaign (which is a positive).

There are no notable economic reports today but there are two Feds speakers, Bostic (1:35 p.m. ET) and Barr (2:45 p.m. ET) and if they join other colleagues in expressing openness to cutting rates in September, it should be a mild tailwind for stocks.

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The Right Way to Think About Economic Growth Right Now

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The Right Way to Think About Economic Growth Right Now: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard (The Right Way to Think About the U.S. Economy)

Futures are slightly lower following a mostly quiet night of news as markets digest Thursday’s strong rally.

The only notable economic report overnight was UK retail sales, which rose 0.8% vs. (E) 0.5% and added to Thursday’s haul of solid global data.

Geo-politically, Israel/Hamas ceasefire talks continued and any breakthrough would be a surprise market positive.

Today there are a few notable economic reports including Consumer Sentiment (E: 67.0), 1-Yr Inflation Expectations: (E: 2.9%), 5-Yr. Inflation Expectations (E: 3.0%) and Housing Starts (1.342M).  However, those numbers aren’t that important to growth so barring a major surprise, they shouldn’t move markets and we should mostly see digestion of Thursday’s big rally.

There is also one Fed speaker today, Goolsbee (1:25 p.m. ET), and he’s dovish do don’t be surprised if he openly talks about cutting rates in September.

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I really don’t think the market should be rooting for a 50 basis point rate cut

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I really don’t think the market should be rooting for a 50 basis point rate cut: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Odds of a Double Rate Cut Are Rising. Be Careful What You Wish For.

“I really don’t think the market should be rooting for a 50 basis point rate cut in September,” Sevens Report Research’s Tom Essaye told Barron’s. “If the Fed feels like they have to cut 50 bps, then that means they’re all of a sudden worried about the economy, and Fed policy just doesn’t work fast enough to fix those problems.”

The consumer price index for July, due out tomorrow, will give Wall Street a better idea of how inflation stands. Essaye says markets should really be rooting for decent data on inflation and 25 basis point cut in September. In the following days, though, we’ll get updates on the economy that could be more significant signals than the PPI and CPI.

“No one thinks inflation is a problem anymore,” Essaye says. “It’s just a question of how fast it’s declining, right? The bigger question is, what is happening with growth and this does not give any insight into that, and that’s why Thursday’s data is also going to be important.”

Also, click here to view the full Barron’s article published on August 13th, 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.

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I continue to advocate for defensive sector exposure and and minimum volatility funds

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 I continue to advocate for defensive sector exposure and and minimum volatility funds: Tom Essaye Quoted in SwissInfo.ch

Stocks Halt Rebound as Oil Hits $80 on War Angst: Markets Wrap

Tom Essaye at The Sevens Report says he doesn’t think fundamentals have deteriorated enough to warrant de-risking and reducing equity or risk exposure — but he also wants to caution against dismissing the recent uptick in volatility.

“Much of what I read over the weekend characterized this recent volatility as just a typical pullback in an upward-trending market,” Essaye. “Because of that, I continue to advocate for defensive sector exposure and and minimum volatility funds.”

Also, click here to view the full article published on August 12th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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CPI Preview: Good, Bad, Ugly

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CPI Preview: Good, Bad, Ugly: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, Ugly
  • Chart: 10-Yr Yield Falls to 52-Week Lows

Futures are flat this morning while overseas markets were mixed overnight with Europe underperforming amid soft economic data while Asian shares were mostly higher.

Economically, the August German ZEW Survey saw Current Conditions fall to -77.3 vs. (E) -74.5 and Economic Sentiment drop to 19.2 vs. (E) 34.5 which weighed on stocks and other risk assets.

Domestically, the NFIB Small Business Optimism Index rose to 93.7 vs. (E) 91.7 which eased recession fears and is helping U.S. equity futures relatively outperform ahead of the open.

Looking into today’s session, trader focus will be on the first inflation data of the week with PPI (E: 0.2% m/m, 2.6% y/y) and Core PPI (E: 0.2% m/m, 3.0% y/y) due out ahead of the bell.

There is also one Fed speaker: Bostic (1:15 p.m. ET) and one consumer-focused earnings release: HD (E: $4.55) to watch.

Bottom line, PPI could move markets today if there is a big surprise in the release, but markets are likely to remain in wait-and-see mode as investors await the more important CPI release tomorrow.

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How Worried Should We Be About This Market?

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How Worried Should We Be About This Market?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • How Worried Should We Be About This Market?
  • Weekly Market Preview:  Important Updates on Economic Growth and Earnings
  • Weekly Economic Cheat Sheet:  Stagflation or Not?  (CPI Wednesday, Retail Sales Thursday)

Futures are slightly higher following a quiet weekend of news as investors digested last week’s early swoon and strong rebound, ahead of important updates this week on inflation and economic growth.

Geo-political tensions remained elevated as the world waits for the Iran/Hezbollah retaliation on Israel and expectations for an attack any day remain high.

There was no notable economic overnight and investors’ focus is on Wednesday’s CPI and Thursday’s Retail Sales.

Today is a quiet day on the calendar as there are no notable economic reports and no important Fed speakers.  But, this week provides important updates on inflation and economic growth and the stakes are high:  If inflation cools further and growth is solid, stocks can extend the rally.  If inflation isn’t cool and growth disappoints, brace for stagflation worries (and more volatility).

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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.

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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.

 

Mega-cap tech remains king

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Mega-cap tech remains king: Sevens Report Co-Editor, Tyler Richey, Quoted in S&P Global

Magnificent 7 stocks stumble, boosting peak views

All seven stocks were largely rebounding Aug. 6 as “mega-cap tech remains king” within the larger technology sector, said Tyler Richey, a co-editor with Sevens Report Research.

“The relative resilience by the Magnificent Seven suggests that investor demand for tech exposure remains concentrated in those seven mega-cap names … while the rest of the space is seeing some technical cracks emerge as bullish conviction for the rest of tech is starting to fade,” said Richey.

Richey said he expects these mega-cap tech stocks to attempt to revisit their all-time high soon, as these stocks tend to be favored by portfolios looking for long exposure in the market at times of high cyclical risks.

“As long as the market is pricing in gradual rate cuts in the quarters ahead, optimism in support of the soft landing narrative would likely see mega-cap tech continue to lead the market as the Mag-7 names account for a significant amount of the expected S&P 500 earnings growth in the quarters ahead,” Richey said.

Also, click here to view the full article published in S&P Global on August 6th, 2024. 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.