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The bond market is now signaling a real chance of a greater-than-expected economic slowdown

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The bond market is now signaling a real chance of a greater-than-expected economic slowdown : Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Traders Seek Refuge in Bonds Amid Market Volatility

“The bond market is now signaling a real chance of a greater-than-expected economic slowdown and falling yields are no longer a positive for markets. Going forward, the sooner Treasury yields can stabilize (ideally with the 10 year close to 4%) the better for markets,” wrote Sevens Report’s Tom Essaye in a note.

Also, click here to view the full Barron’s article published on August 5th, 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.

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What Makes This Stop? (Key Indicators to Watch)

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What Makes This Stop? (Key Indicators to Watch): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Makes This Stop? (Seven Indicators to Watch)
  • Chart – VIX Spikes to Pandemic Highs

There is a sense of stability in global markets this morning as the yen and VIX, two major sources of the recent volatility, are both pulling back amid easing recession fears.

Economically, German Manufacturing Orders rose a solid 3.9% vs. (E) 0.8%, helping to offset EU Retail Sales which fell -0.3% vs. (E) +0.1%.

Today, there is one economic report: International Trade (E: -$72.5B) but the data shouldn’t move markets while there are no Fed officials scheduled to speak.

Looking ahead to mid-day, the Treasury will hold a 52-Week Bill auction at 11:30 a.m. ET and a 3-Yr Note auction at 1:00 p.m. ET. Investors will be watching the auction results closely to gauge Treasury demand, and if the auctions are weak, that could see some of the recession fears from the last few sessions ease further and allow stocks to recover a good portion of the losses.

Finally, earnings season is starting to wind down but there are a few notable companies releasing results today including: UBER (E: $0.31) ahead of the bell and SMCI (E: $8.10) and ABNB (E: $0.92) after the close.

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And that’s really what’s been going on in the earnings season

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And that’s really what’s been going on in the earnings season: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Nvidia and Other Chip Stocks Are Leading the Market Lower Ahead of Big Tech Earnings

“I don’t think the market is really doubting the whole AI story at this point,” Sevens Report Research’s Tom Essaye told Barron’s. “But I do think there are extremely high growth expectations. And if those growth expectations disappoint, even a little bit, then you’ll see some punishment. And that’s really what’s been going on in the earnings season.”

Also, click here to view the full Barron’s article published on July 30th, 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.

Markets may get a bit ugly

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Markets may get a bit ugly: Sevens Report Editor, Tom Essaye, Quoted in Bloomberg

Israel Strike: The Bloomberg Open, Europe Edition

Markets may “get a bit ugly” if the central bank doesn’t signal a reduction given the recent tech weakness, said Tom Essaye at The Sevens Report.

Also, click here to view the full Bloomberg article published on July 31st, 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.

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 biggest question facing investors today remains ‘Is It Different This Time?

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The biggest question facing investors today remains ‘Is It Different This Time?: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Stock Market Doesn’t Look Like the Dot-Com Bubble. It’s Something Worse.

No, that’s not the real worry. The S&P 500 is. It smacks of 2007 all over again. From last July until now, the index has traded with an 85% correlation to July 2006 though July 2007, according to Sevens Report’s Tom Essaye.

Essaye went so far as to describe the resemblance of this market to the 2007 market as “concerning to say the least.” And he touched on the uncertainty that investors are facing.

“The biggest question facing investors today remains ‘Is It Different This Time?’” he wrote

Also, click here to view the full Barron’s article published on July 31st, 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.

FOMC Preview

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FOMC Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview
  • Chart: Stocks Are Trading With an 85% Correlation to 2007

U.S. equity futures are tracking European stocks higher as traders look ahead to the Fed, big-tech earnings, and more important economic data due in the sessions ahead.

Economically, Japan’s Unemployment Rate fell to 2.5% vs. (E) 2.6% while the EU’s GDP Flash rose to 0.6% vs. (E) 0.5%. The reports are not meaningfully moving markets but seem to be easing recession fears to some degree in pre-market trade.

Looking into today’s session, there are two housing market reports due out early: Case-Shiller Home Price Index (E: 7.2%) and the FHFA House Price Index (E: 6.3%) before Consumer Confidence (E: 99.5) and JOLTS (E: 8.0 million) will be released after the opening bell.

The July FOMC meeting begins today so there are no Fed speakers which will likely bring a sense of “Fed paralysis” before tomorrow’s meeting announcement and Powell’s press conference.

That will leave trader focus on earnings with BP ($0.92), PG ($1.37) and PYPL ($0.97) all due to report before the open while AMD ($0.67), MSFT ($2.90), and SBUX ($0.93) will release results after the close.

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What is Causing This Pullback?

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What is Causing This Pullback?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What is Causing This Pullback?
  • Yield Curve Update:  10’s-2’s Just Hit a Two-Year High
  • EIA Analysis and Oil Market Update

Futures are modestly lower as more mixed earnings are preventing a bounce in stocks.

Tech earnings were “ok” overnight (IBM and NOW posted good results) but other sectors’ results were weak, especially in the auto sector (Ford (F) is down 13% pre-market) and that’s weighing on futures.

Focus will remain on economic data and earnings today and the calendar is busy on both fronts.  Economically, the key reports today, in order of importance, are:  Jobless Claims (E: 235K), Final Q2 GDP (E: 2.1%), and Durable Goods (E: 0.3%).  Goldilocks economic data (so in-line with expectations across the board with no hints of inflation) would be a positive for stocks and help to slow this pullback.   But, if data is very soft or very strong, expect more downward pressure.

On the earnings front, results this season are, so far, very mixed and disappointing earnings are weighing on stocks.  Important results today include: AAL (E: $1.04), ABBV (E: $2.56), VLO (E: $2.61), LHX (E: $3.18) and BKR (E: $0.49).

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Dow Theory: Transports Sputter, Industrials Power On

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Dow Theory: Transports Sputter, Industrials Power On: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Dow Theory: Transports Sputter, Industrials Power On
  • Visual – Existing Home Sales Fall, Home Prices & Inventories Rise

Futures are lower thanks to soft earnings from Mag-7 members TSLA (down 7% premarket) and GOOGL (down 3% premarket) as well as soft economic data in Europe.

The Eurozone’s July Composite Flash PMI fell to 50.1 vs. (E) 51.0 with both the manufacturing and services components missing estimates (German data was notably weak).

Looking into today’s session, the U.S. Flash Composite PMI (E: 51.6) will be the market’s primary focus early in the day but New Home Sales (E: 644K) data is also due to be released shortly after the bell.

From there focus will likely revert to how the Mag-7 trades in the wake of yesterday’s weak tech earnings and follow through selling (like we are seeing in the pre-market) will be a drag on the major indexes.

There is also a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s strong 2-Yr auction pushed yields lower).

Finally, there are a few notable earnings reports due after the close including: F (E: $0.64), CMG (E: $0.31), and IBM (E: $2.16) and the Fed’s Bowman is scheduled to speak at 4:05 p.m. ET.

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Olympic Style Ideas (Finding A Common Topic With Clients)

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Olympic Style Ideas (Finding A Common Topic With Clients): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Olympic Style Ideas (Finding A Common Topic With Clients)

Futures are little changed following a night of mixed earnings as NFLX results were in-line while industrial PPG warned of a difficult macro-economic environment.

Economically, the only notable report was UK Retail Sales and they were worse than expected (-1.2% vs. (E) -0.4%) and that will push back slightly against the growing idea that the BOE won’t cut rates in September.

Today there are no notable economic reports, but we do get two Fed speakers, Williams (10:40 a.m. ET) and Bostic (12:45 p.m.).  Of the two, Williams is more important because he’s part of Fed leadership and if he again points towards a September rate cut (by saying the Fed is close to cutting rates) that should help boost stocks.

Earnings, meanwhile, continue to roll on and results so far are mixed.  Important reports today include AXP ($3.22), SLB ($0.83) and TRV ($2.35).

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What Caused This Rotation From Growth to Value (And How Long Can It Last?)

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What’s in Today’s Report:

  • What Caused This Rotation From Growth to Value?
  • How Long Can It Last?

Futures are slightly higher as tech stocks bounce modestly following better than expected earnings overnight.

Taiwan Semiconductor (TSM) posted solid earnings and the stock is modestly higher pre-market and that’s helping the tech sector to bounce and support futures.

Economically there were no important reports overnight.

Today is a busy day of economic data and central bank speak.  First, on the data front, the most important report is the July Philly Fed Survey (E: 3.0) followed closely by Jobless Claims (E: 230k).  Economic data so far this week has been Goldilocks and that’s helped stocks and markets will welcome more Goldilocks reports today, while “Too Cold” data will increase growth worries.

Looking at central banks, there’s an ECB Rate Decision later this morning but they aren’t cutting rates (the only question is how forcefully they telegraph a September cut and the more forcefully, the better for stocks).  Looking at the Fed, we have three speakers today, Logan (1:45 p.m. ET), Daly (6:05 p.m. ET) and Bowman (7:30 p.m. ET) and if they echo recent sentiment that it’s “almost time” to cut rates that should also help support stocks.

Finally, on the earnings front, we get some notable reports today including TSM ($1.37), NFLX ($4.70) and PPG ($2.48).

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