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Was Bullard That Hawkish? (No)

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What’s in Today’s Report:

  • Was Bullard That Hawkish?  (No).

Futures are moderately higher following more geo-political progress amidst an otherwise quiet night.

Russian officials signaled they are open to high-level talks with the U.S. on strategic stability, which is being taken as another (small) step towards an ultimate cease-fire.

Economically, the only notable number was UK Retail Sales and they were better than expected, rising 0.6% vs. (E) 0.2%.

Today the calendar is sparse with just Existing Home Sales (E: 4.360M) and one Fed speaker, Collins (8:40 a.m. ET) but if she doesn’t provide any hawkish surprises, this early rally can continue as stocks recoup yesterday’s Bullard inspired losses.

Fed Wildcard to Watch: Dual Risks

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What’s in Today’s Report:

  • Fed Wildcard to Watch: Dual Risks
  • Economic Data Takeaways: A Hot JOLTS Report Offsets a Favorable ISM Release
  • Chart – The Fed Could Make or Break the Gold Market Today

Futures are higher ahead of today’s Fed announcement amid continued China reopening hopes and good earnings.

AMD is up more than 4% after good earnings yesterday evening which is bolstering tech shares this morning.

Today, the focus will be on economic data early with the ADP Employment Report (E: 200K) due out ahead of the bell. The market will want to see some headline weakness to help offset yesterday’s JOLTS data in order for stocks to rebound into the Fed. Motor Vehicle Sales (E: 14.2M) will also be released over the course of the morning.

Then focus will turn to the Fed with the FOMC Announcement at 2:00 p.m. ET followed by Powell’s Press Conference at 2:30 p.m. ET. A dovish release could trigger a sharp and squeezy rally while a hawkish decision would almost certainly result in investor pain.

Earnings will be on the backburner today but there are still a few notable releases to watch: CVS ($1.99), PGR ($1.48), CHRW ($2.15), QCOM ($3.14), EBAY ($0.93).

Tom Essaye Quoted in MorningStar on October 24th, 2022

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Gold futures retreat after Friday’s wild ride

“The trend is still lower for now but once we can actually say we have reached peak-hawkishness, the outlook for gold will very likely shift to neutral (if not bullish) from bearish,” said Tom Essaye, a former Merrill Lynch trader and the founder of the Sevens Report newsletter. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on October 4th, 2022

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Gold futures end at a 3-week high; silver prices at highest since June

“If U.S. Treasury yields have peaked near term along with the dollar, gold and silver can both extend gains and claw back some of the recent losses”, analysts at Sevens Report Research wrote in Tuesday’s newsletter. Click here to read the full article.

Another Hawkish Surprise: What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • Another Hawkish Surprise: What the Fed Decision Means for Markets

Futures are little changed as markets digested yet another hawkish Fed decision amidst more global rate hikes.

The overnight session was mostly quiet as investors digested the Fed rate hike while other global central banks raised rates (five separate central banks hiked rates overnight, as expected).

The Bank of Japan intervened in the currency markets for the first time since 1998, causing a 1% rally in the yen.

Today focus will be on the Bank of England Rate Decision (E: 50 bps hike) and on weekly Jobless Claims (E: 220K).  Fed Chair Powell again highlighted that the labor market is still much too tight, so markets need these jobless claims to start to rise towards 300k to prevent even further Fed tightening in the future.  The sooner the labor market returns to better balance, the sooner we get to “peak hawkishness.”

Tom Essaye Quoted in Forbes on September 19th, 2022

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Stocks Struggle As Markets Brace For Another ‘Unusually Large’ Fed Rate Hike

Oil prices fell more than 2% as risks of a recession “weighed heavily” on the market, analyst Tom Essaye of the Sevens Report, wrote in a Monday note. Click here to read the full article.

Sevens Report Analyst Quoted in Market Watch on September 19th, 2022

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Gold retreats, holds near a more than 2-year low as investors await Fed decision

The new lows for gold have shifted our call on gold from neutral to bearish for the medium term. That will remain the case until we reach peak hawkishness with Fed expectations resulting in a top in the dollar and interest rates, both nominal and real, beginning to decline…analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.

Sevens Report Analysts Quoted in MorningStar on September 7th, 2022

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Gold prices mark highest finish in more than a week

If the recent dynamic of rising rates, a firming dollar, and fading inflation expectations continues, it is only a matter of time until gold breaks down through the bulls’ ‘line in the sand’ at $1,680 and hits new lows for the year…analysts at Sevens Report Research wrote in Wednesday’s newsletter. Click here to read the full article.

Sevens Report Analysts Quoted in ETF Trends on August 25th, 2022

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Gold ETFs Could Still Find a Place in a Diversified Portfolio

If the market responds to Powell in a dovish manner that should send inflation expectations even higher, while the dollar and yields should pull back, which would all result in tailwinds on gold. However, a hawkish and ‘growth-insensitive’ Powell would likely send gold back down towards $1,700, potentially by Friday’s close…analysts at Sevens Report Research said in a note. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on August 22nd, 2022

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Gold down a 6th session in a row as a strong dollar weighs on precious metals

If the dollar and Treasury yields continue to trend higher, it is only a matter of time before gold retests the 2022 lows…analysts at Sevens Report Research wrote in Monday’s newsletter. Click here to read the full article.