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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).

Monthly Bitcoin & Crypto Update

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What’s in Today’s Report:

  • Monthly Bitcoin & Crypto Update

Futures are higher on news the U.S. and China will hold preliminary trade talks in Switzerland Saturday which offset soft tech earnings from SMCI as focus turns to the Fed.

Economically, German Manufacturing Orders jumped 3.6% vs. (E) 1.0% while EU Retail Sales fell -0.1% vs. (E) 0.0%.

Looking ahead to the U.S. session, there is one economic report this afternoon: Consumer Credit (E: $10.0B), but the data is unlikely to move markets given the afternoon Fed decision.

Trader focus will be on any trade headlines this morning before attention turns to the Fed with the FOMC Announcement (2:00 p.m. ET), and Fed Chair Press Conference (2:30 p.m. ET) mid-afternoon.

There are some more late season earnings releases to watch that could move markets in pre-market/after-hours trade including: UBER ($0.51), DIS ($1.18), GOLD ($0.29), CVNA ($0.75), OXY ($0.73), and CLF ($-0.78).

Bottom line, focus is on the Fed today and while no change in the policy rate is expected, traders will be scrutinizing the meeting statement for any changes regarding economic uncertainty or hints on when the FOMC may lower rates next during Powell’s press conference. The more dovish the language and commentary, the better for equities today.

The market may react with a “sell the fact” scenario

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The market may react with a “sell the fact” scenario: Tom Essaye Quoted in GuruFocus

Trade Uncertainty Looms Over S&P 500 Despite Recent Gains

Tom Essaye, founder of Sevens Report Research, noted that the Trump administration has significantly weakened the April 2 tariff statement, delaying implementation and exempting key import categories such as chips, electronics, pharmaceuticals, and automobiles. Although the market has recovered losses post “Liberation Day,” the S&P 500 is still down 3.9% for the year despite a nine-day rally, the longest since November 2004.

Essaye warns that when a trade agreement is finally announced, the market may react with a “sell the fact” scenario. Although trade tensions appear to be easing, new tariffs remain higher than January levels, posing growth headwinds.

Essaye suggests shifting to defensive sectors like utilities, consumer staples, and healthcare for risk mitigation. He also recommends diversified investments through the Invesco S&P 500 Equal Weight ETF (RSP) and favors low volatility funds like iShares MSCI USA Min Vol Factor ETF (USMV) and high-quality stock funds (QUAL).

Also, click here to view the full article featured on MSN GuruFocus, published on May 5th, 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.

More S&P 500 stocks are trading below their 200-day MAs than their 50-day MAs

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The primary negative influences on copper: Tyler Richey, editor of Sevens Report Technicals Quoted in MarketWatch

More S&P 500 stocks trade below 200-day moving average than 50-day moving average

“The fact that more S&P 500 stocks are trading below their 200-day MAs than their 50-day MAs continues to support the case that the rally off the April 2025 lows remains a countertrend move in an otherwise still downward-trending market,” Tyler Richey, editor of Sevens Report Technicals, wrote in a Monday note.

Using the 2022 bear market as a guide, a test of the 50% level in the percentage of S&P 500 companies that are trading above their 200-day moving average “should not come as a surprise ahead of another washout as initial attempts to find a bottom in this bear market commence,” Richey wrote.

Also, click here to view the full article featured on MarketWatch published on May 6th, 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.

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview
  • ISM Services PMI Takeaways – Resilience Points to Soft Landing

Stock futures are lower thanks to a combination of weak earnings news and disappointing economic data overnight.

On the earnings front, PLTR missed estimates (shares down -8% in premarket trading) while F pulled 2025 guidance noting a tariff impact estimated to be -$2.5B on this year’s earnings.

Economically, China’s Service PMI fell to 50.7 vs. (E) 51.8 in April which dragged the Composite PMI down from 51.8 to 51.1, highlighting the negative impact the global trade war is having on the Chinese economy.

Looking into today’s session, there is one economic report to watch: International Trade Balance (E: -$136.3B). Typically, trade data is now widely followed, however given the trade war, a deeper than anticipated deficit could bolster recession angst.

Moving to the afternoon, the Treasury will hold a 6-Week Bill auction at 11:30 a.m. ET and a 10-Yr Note auction at 1:00 p.m. ET. The outcome of the former could shed light on near-term rate-cut odds while the latter auction could offer insight into growth and inflation expectations.

Finally, some late season earnings are due out today including: MAR ($2.27), CEG ($2.14), AMD ($0.75), SMCI ($0.21), and ET ($0.33).

Bottom line, good economic news and dovish money flows in Treasury auctions could help stabilize markets as the Fed meeting gets underway in Washington which will likely result in a growing sense of “Fed paralysis” as the session progresses today.

A ‘sell-the-news’ move

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A ‘sell-the-news’ move: Tom Essaye Quoted in Investor’s Business Daily

Dow Jones Breaks Winning Streak On Trump Tariff Move; Nvidia, Tesla Fall As Palantir Sinks

Tom Essaye, founder and president of Sevens Report Research, cautioned that much of Trump’s backtracking on tariffs may already be priced in.

“A ‘sell-the-news’ move once some trade deals are announced” may lead to some more volatility, Essaye said in a note to clients.

Also, click here to view the full Investor’s Business Daily article featured on MSN, published on May 5th, 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.

The Trump administration has seriously backtracked on the April 2 announcement

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The Trump administration has seriously backtracked on the April 2 announcement: Tom Essaye Quoted in MarketWatch

Why the stock rally may be in trouble after the White House ‘backtracked’ on tariffs

The U.S. stock market has already priced in backtracking on the large and sweeping “liberation day” tariffs announced by President Donald Trump on April 2, making it difficult for the market to keep up its recent rally, according to Sevens Report Research.

“The Trump administration has seriously backtracked on the April 2 announcement, including a delay while negotiations take place and exempting major categories of imports,” said Tom Essaye, founder and president of Sevens Report Research, in a note Monday. As an example of tariff exemptions, Essaye pointed to computer chips, electronics, pharmaceuticals and automobiles.

“The reality of the past month post-‘liberation day’ hasn’t been as bad as feared and the market has recouped those losses,” said Essaye. “However, I do not think these events are enough to sustainably propel the S&P 500 forward and I am sticking to my general 5,100-5,500-ish range.”

Investors, worried that large tariffs will place a drag on the U.S. economy while increasing the cost of goods for consumers, have been monitoring the White House’s negotiations with its trading partners. But with backtracking on tariffs already priced into the market, Essaye cautioned that “we could even see a ‘sell-the-news’ move once some trade deals are announced.”

Also, click here to view the full article featured on MarketWatch published on May 5th, 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.

Jobs Report Preview: Recession Risks Rising?

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What’s in Today’s Report:

  • Jobs Report Preview: Recession Risks Rising?

Futures are sharply higher on strong earnings overnight.

META (up 6% pre-market) and MSFT (up 9% pre-market) both beat estimates and posted strong guidance and that’s helping futures rally.

Economically, the only notable report was UK Manufacturing PMI, which beat estimates (45.4 vs. (E) 44.0).

Today will be an important day for economic data and earnings.  On the data front, the two key reports today are Jobless Claims (E: 221K) and the ISM Manufacturing PMI (E: 47.9).  The stronger these reports are, the better for stocks as they’ll push back on slowdown fears.

On the earnings front, AMZN ($1.35) and AAPL ($1.61) are the most important reports (both after the close) but there are several other notable earnings as well: LLY ($3.52), CVS ($1.67), MA ($3.57).

The primary negative influences on copper

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The primary negative influences on copper: Sevens Report Analysts Quoted in MarketWatch

Here’s what this real-time barometer says about tariff-induced recession risks rising

“Recession worries and lack of concrete progress in trade relations between the U.S. and China remain the primary negative influences on copper,” analysts at Sevens Report Research wrote in Wednesday’s newsletter.

They said the “primary trend in copper is not one of higher or lower prices, but of volatility, which highlights trade-war uncertainty and an elevated sense of angst among global investors.”

Also, click here to view the full article featured on MarketWatch published on April 30th, 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.

A Wildcard to Watch: Legal Challenges to Trump’s Tariffs

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What’s in Today’s Report:

  • Wildcard to Watch: Legal Challenges to Trump’s Tariffs
  • The “Rest of the Market” Continues to Outperform – Chart

Stock futures are wavering between gains and losses this morning as traders digest potential tariff relief for auto imports and position into more mega-cap earnings reports.

Economically, Germany’s GfK Consumer Climate Index rose to -20.6 vs. (E) -25.5, helping German markets outperform with the DAX up ~0.75% this morning.

Today, focus will be on economic data early with International Trade in Goods (E: $-142.0B), Case-Shiller Home Price Index (E: 4.7%), FHFA House Price Index (E: 0.3%), Consumer Confidence (E: 87.5), and JOLTS (E: 7.464 million) data all due to be released.

Earnings season also continues today with noteworthy companies reporting results including: PYPL ($1.15), UPS ($1.42), KO ($0.71), V ($2.68), and SBUX ($0.49).