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Tom Essaye set expectations for holiday travel.

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Tom Essaye set expectations for holiday travel: Tom Essaye Interviewed On Schwab Network

360 Round: Holiday Travel

Robby Silk and Tom Essaye set expectations for holiday travel. They both expect record air travel, with Airlines for America forecasting 54M flyers between Dec. 19-Jan. 6. Tom says it’s “not surprising” that travel remains strong, but notes that the industry has shrunk substantially over the last 20 years with mergers and bankruptcies.

Also, click here to view the full interview with Schwab Network published on December 23rd, 2024. 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.

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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.

Why Have Stocks Dropped?

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Why Have Stocks Dropped?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Have Stocks Dropped?
  • Weekly Market Preview:  Can Goldilocks Data Fuel A Rebound?
  • Weekly Economic Cheat Sheet:  Friday’s Jobs Report is the First Big Report of 2025.

Futures are extending Friday’s rally thanks to a rebound in political optimism and despite more mixed global economic data.

Mike Johnson was relatively easily re-elected Speaker of the House on Friday, providing a needed positive political event for markets and boosting pro-growth policy hopes.

Economically, global data remained lack luster as the UK Services PMI missed expectations (51.1 vs. (E) 51.4.).

Today focus will turn back to data with Factory Orders (E: -0.3%) and the December Services PMI (E: 58.5) and the more Goldilocks the readings, the more they’ll fuel this early bounce.  There is also one Fed speaker, Cook (9:15 a.m. ET), but she shouldn’t move markets.

Sevens Report Quarterly Letter

Our Q4 ’24 Quarterly Letter was delivered to subscribers last Thursday, complete with compliance backup and citations. We’re already receiving feedback about how it is saving advisors time and helping them communicate with their clients in this volatile environment!

You can view our Q3 ’24 Quarterly Letter here.

To learn more about the product (including price) please click this link.

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Sentiment Update: Bullish Enthusiasm Reduced, But Not Eliminated

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Sentiment Update: Bullish Enthusiasm Reduced, But Not Eliminated: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Sentiment Update: Bullish Enthusiasm Reduced, But Not Eliminated

Futures are modestly lower, again in quiet trading, on disappointing Chinese economic data.

Chinese industrial profits declined –7.3%, contracting for the fourth consecutive month and reminding investors that while there’s been a lot of stimulus from Chinese officials, it will take time to impact the economy.

In Japan, economic data was better than expected as retail sales and industrial production beat estimates.

Today there are no notable economic reports and trading should be quiet.  That said, the 10-year yield will remain an influence on stocks.  The higher the yield goes, the more it’ll pressure stocks.

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A Likely Quiet Trading Day But With One Important Economic Report

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A Likely Quiet Trading Day But With One Important Economic Report: Start a free trial of The Sevens Report.

Futures are modestly lower in quiet trading following the Christmas holiday.

Economically, the only notable event overnight was “not hawkish” commentary by BOJ Governor Ueda, who was vague when speaking about future rate hikes (although markets do expect the BOJ to hike rates in 2025).

Most major global markets were closed for Christmas and will remain closed today, including major European markets and Hong Kong.

Given the numerous global market closures, trading should be quiet today.  That said, there is one notable economic report, Jobless Claims (E: 223K), and investors will want to see an in-line to slightly weak number that does not push back on any 2025 rate cut hopes.

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Was Last Week A Preview of 2025?

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Was Last Week A Preview of 2025?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Was Last Week A Preview of 2025?
  • Weekly Market Preview: Can the Santa Rally Re-start?
  • Weekly Economic Cheat Sheet: A Quiet Week, But Claims Thursday Matter

Futures are slightly weaker following a quiet weekend of news and ahead of the holiday-shortened trading week.

Economically, the only notable number overnight was UK GDP which was slightly weaker than expected, rising 0.9% vs. (E) 1.0%.

Politically, a U.S. government shutdown was averted as Congress passed a bill to fund the government but only through March, which adds complication to Republican plans to pass aggressive pro-growth legislation.

Today the only notable economic report is Consumer Confidence (E: 113.0) and barring a major surprise, it shouldn’t move markets.

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Did the Fed Decision Weaken the Bull Market?

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Did the Fed Decision Weaken the Bull Market?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Four Reasons the Fed Decision Caused Such a Big Selloff
  • Did the Fed Decision Weaken the Bull Market?

Futures are seeing a bounce following yesterday’s steep selloff despite more negative news overnight.

Politically, government shutdown risks spiked on Thursday after support for the stop-gap funding bill collapsed and a government shutdown on Friday is becoming more likely.

On earnings, Micron (MU) posted disappointing guidance and the stock is down –15% pre-open.

Today is another busy day of economic data and policy decisions.   The Bank of England has a rate decision (E: 25 bps cut) while there are numerous U.S. economic reports including, in order of importance,  Jobless Claims (E: 232K), Philly Fed (E: 2.5), Final Q3 GDP (E: 2.8%) and Existing Home Sales (E: 4.05 million).  The market needs Goldilocks data to help it hold this early bounce and any data that’s “Too Hot” (meaning much stronger than expected) will only increase hawkish Fed worries, push yields higher and likely hit stocks, again.

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Why Has the Trump Trade Stalled? (Part One)

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Why Has the Trump Trade Stalled? (Part One): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Has the Trump Trade Stalled? (Part One)
  • Economic Takeaways – November Retail Sales

Stock futures are recovering some of yesterday’s losses as cooler-than-feared inflation data in the EU is driving modestly dovish money flows ahead of the Fed decision.

Economically, inflation data out of Europe was “cooler” than feared with U.K. Core CPI rising to 3.5% vs. (E) 3.6% while Eurozone HICP rose to 2.2% vs. (E) 2.3%. The “cooler” data saw rates traders price in more policy rate cuts from the ECB in 2025.

Today, there is one economic report due to be released mid-morning: Housing Starts and Permits (1.340M & 1.430M) but the primary market focus will be the Fed decision at 2:00 p.m. ET and likely more importantly, Fed Chair Powell’s press conference at 2:30 p.m. ET.

While the Fed will almost certainly be the primary catalyst for markets today, there is some micro-news that could influence sectors and sub-sectors of the equity markets as we will get late season earnings from GIS ($1.22), JBL ($1.88), MU ($1.75), and LEN ($4.18).

Bottom line, investors are looking for the Fed to reiterate their view that the economy is tracking for a soft-landing and that the FOMC is not overly concerned with the latest uptick in inflation data that could signal a sustained “pause” in rate cuts. A hawkish tone in the announcement or Powell’s press conference would likely trigger renewed selling pressure in equity markets and higher bond yields.

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What to Expect from Markets in 2025

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What to Expect from Markets in 2025: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What to Expect from Markets in 2025
  • Weekly Market Preview:  Does the Fed Keep Cutting and Does Data Stay Goldilocks?
  • Weekly Economic Cheat Sheet:  All Eyes on the Fed Dots

Futures are slightly higher following a mostly quiet weekend of news and despite mixed global economic data.

Chinese Retail Sales (3.0% vs. (E) 4.6%) and Fixed Asset Investment (3.3% vs. (E) 3.5%) both missed estimates, reminding investors that despite promises for more stimulus, Chinese growth remains lackluster.

In Europe, data was better as the flash Composite PMIs for the EU (49.5 vs. (E) 48.0) and the UK (50.5 vs. (E) 50.0) both beat estimates.

Today focus will be on the Empire Manufacturing Survey (6.4) as that’s the first data point for December and investors will want to see in an-line to slightly soft reading to reinforce the Goldilocks narrative.

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Why Has Tech Been So Strong? (Again)

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Why Has Tech Been So Strong? (Again): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Has Tech Been So Strong? (Again)

Futures are modestly higher following better than expected tech earnings overnight.

Broadcom (AVGO) earnings were mixed but management commentary was bullish and the stock is rallying 15% pre-market and that’s helping to boost tech stocks and broader market futures.

Economically, the notable data was from the UK and it was soft.  Monthly GDP (-0.1% vs. (E) 0.2%) and Industrial Production (-0.6% vs. (E) 0.3%) both missed estimates.

Today there are no notable economic reports nor any Fed speakers, so markets will likely follow the tech sector.  If the AVGO led tech rally this morning can hold, it should pull other indices and sectors higher with it.

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