Posts

CPI Preview: Good, Bad & Ugly

/in , /by

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

What’s in Today’s Report:

  • CPI Preview:  Good, Bad & Ugly
  • Weekly Market Preview:  Will Market Catalysts This Week Support A Further Rally?
  • Weekly Economic Cheat Sheet:  CPI Tomorrow, Key Growth Data the Rest of the Week

Futures are slightly lower as markets digest two slightly negative events from the weekend and look ahead to a week filled with possible market moving catalysts.

Moody’s downgraded the U.S. credit outlook to negative but importantly did not change the rating and as such it’s not significantly impacting markets.

Geo-politically, U.S. forces struck more targets in Syria over the weekend, escalating regional tensons but so far markets are not reacting (oil isn’t rallying off the news).

Looking forward, this is a potentially important week, but it starts slowly as there are no notable economic reports today nor any Fed speakers.

Beyond today, though, in addition to the economic catalysts this week, risk of another U.S. government shutdown is rising as there needs to be a short-term spending deal by Friday to avoid a shutdown.  So, any progress on that front today will help markets, while any negative headlines will likely provide a small headwind.

CPI Preview:  Good, Bad & Ugly

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 Did Stocks Drop? (Familiar Reasons)

/in , /by

Why Did Stocks Drop? S&P 500: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop? (Familiar Reasons)
  • What A Seven Month High In Continuing Jobless Claims Means for Markets

Futures are little changed following a quiet night of news. Markets digest Thursday’s two “hawkish” events (poor Treasury auction and Powell comments), the rebound in Treasury yields and stock pullback.

Economic data was mixed overnight as UK manufacturing slightly disappointed (0.1% vs. (E) 0.3%). While monthly GDP slightly beat (-0.2% vs. (E) -0.1%) but overall, the data isn’t moving markets.

Treasury yields will likely remain in control of this market and if they continue to rise, expect more declines in stocks.  From a data standpoint, the numbers that could move Treasury yields today are Consumer Sentiment (E: 64.5) and the Five-Year Inflation Expectations (E: 3.0%).  Markets will want to see in-line readings for both (or lower in the case of inflation expectations) to pressure yields.

We also have two Fed speakers today, Logan (7:30 a.m. ET) and Bostic (9:00 a.m. ET) but they shouldn’t move markets (Logan will likely be slightly hawkish and Bostic slightly dovish).

Why Did Stocks Drop?

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.

Was Last Week’s Rally Legitimate?

/in , /by

Was Last Week’s Rally Legitimate? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Was Last Week’s Rally Legitimate?
  • Weekly Market Preview:  Do Falling Treasury Yields Fuel More Upside in Stocks?
  • Weekly Economic Cheat Sheet:  Is the “Growth Scare” Starting to Appear?

Futures are modestly higher on momentum from last week’s big rally, following a mostly quiet weekend of news.

Economically, Euro Zone Composite PMI met expectations (46.5) while German Manufacturers’ Orders beat (0.2% vs. (E ) -1.1%) but there was a negative revision and overall, the data isn’t moving markets.

Geo-politically, Israeli forces are moving further into Gaza but so far risks of a broadening conflict remain relatively low.

Today there are no notable economic reports and just one Fed speaker, Cook (11:00 a.m. ET), so look for Treasury yields to continue to drive short term trading.  If the 10-year yield continues to decline then the S&P 500 can extend last week’s rally.

Please email info@sevensreport.com if you need to contact us.

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.

What the Fed Decision Means for Markets

/in , /by

What the Fed Decision Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Fed Decision Means for Markets
  • EIA Analysis and Oil Market Update

Futures are moderately higher on momentum from Wednesday’s post-Fed rally while earnings and data were solid overnight.

Economically, Euro Zone Manufacturing PMI was slightly better than expected (43.1 vs. (E ) 43.0).

On earnings, reports were good overnight with solid reports from ALL, CLX, PYPL, QCOM and others.

Today focus will be on economic data and a big earnings report after the close.  Economically, the two notable reports are Jobless Claims (E: 213K) and Unit Labor Costs (E: 0.7%).  Of the two, Unit Labor Costs are the more important number and markets will want to see an in-line or lower reading to imply receding inflation risks.

On the earnings front, there are a lot of reports today, but the highlight is clearly AAPL ($1.39) which reports after the close.  Other notable earnings include SQ ($0.47) and SBUX ($0.97).

Bottom line, if the market gets more Goldilocks data and solid earnings, this relief rally can continue. But if yields start to rise, don’t be shocked if there’s a reversal.

What the Fed Decision Means for Markets

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.

Core PCE Reading Was Inline With Expectations

/in , /by

Core PCE Reading Was Inline With Expectations: Tom Essaye Quoted in Barron’s

S&P 500 Joins Nasdaq in Correction Territory

Sevens Report Research’s Tom Essaye told Barron’s the core PCE reading was inline with expectations but didn’t eliminate the risk of inflation rebounding.

He added that Amazon and Intel’s earnings didn’t outweigh what has been a bad week overall.

“And, while there’s progress in Washington, markets won’t celebrate the Republicans being able to finally elect a speaker, and there’s still the prospect of a government shutdown looming,” Essaye added.

Also, click here to view the full Barron’s article published on October 28th, 2023. 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 Rally

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.

What Can Stop This Selloff?

/in , /by

What Can Stop This Selloff? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Can Stop This Selloff?
  • Weekly Market Preview:  A Very Important Week of Earnings, Fed Decision and Economic Data
  • Weekly Economic Cheat Sheet:  A Busy Week (Jobs Report Friday, ISM PMIs Wed/Fri)

Futures are moderately higher on a small reduction in geo-political tensions and better than expected inflation data.

Geo-politically, Israel moved forces into Gaza over the weekend but the operation isn’t as large as feared (yet) and that’s helping to slightly reduce geopolitical anxiety.

On inflation, Spanish CPI rose 3.5% vs. (E) 3.8%, providing another reminder that global inflation is declining.

This week will be a very busy one as we get a Fed decision and important economic/inflation data, as well as the final “big” week of earnings.  But, it starts slowly as there are no economic reports today, so focus will be on earnings and some important reports today include:  MCD ($3.00), WDC ($-1.87), ON ($1.35), SOFI ($-0.07), ANET ($1.58).

What Can Stop This Selloff?

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 Tech Is Driving This Selloff

/in , /by

Why Tech Is Driving This Selloff: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Tech Is Driving This Selloff
  • S&P 500 Weekly Chart: Not A Setup You Want To See

Futures are moderately higher on solid tech earnings and optimism there won’t be a government shutdown drama.

On earnings, AMZN and INTC both posted solid numbers (up 6% and 7% after hours respectively). And that’s helping the tech sector and broader market bounce.

Politically, Speaker Johnson publicly supported passing a short term spending bill. This possibly avoids another shutdown drama.

Today focus will be on inflation, namely the Core PCE Price Index (E: 0.3% m/m, 3.7% y/y) and the five-year University of Michigan Inflation Expectations (E: 3.0%).  Lower than expected numbers will remind markets that inflation is falling and depress Treasury yields, and that should extend today’s early rally.  Conversely, if the inflation data is higher than expected, don’t be shocked if these early gains are erased as yields rise.

Why Tech Is Driving This Selloff

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 Did Stocks Drop to Multi-Month Lows?

/in , /by

Why Did Stocks Drop to Multi-Month Lows? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop To Multi-Month Lows? (A New Reason)
  • Will the Election of a Speaker of the House Provide Any Relief for Investors?

Futures are solidly lower and are extending Wednesday’s losses following more disappointing earnings reports.

Earnings results this week have not been good and that continued overnight with disappointing guidance from META, WPP and Canadian Pacific (CP).

Today will be a busy day on both macro and micro economic fronts.

First, there’s an ECB Rate Decision but no hike is expected.  Economically, key reports today include, in order of importance, Jobless Claims (E: 208K), Durable Goods (E: 1.0%), Preliminary Q3 GDP (4.2%) and Pending Home Sales (-1.0%).  As has been the case, “Goldilocks” data that shows solid, but not very strong, activity will be welcomed by markets.

On the earnings front, there are multiple important reports today highlighted by AMZN ($0.58) after the close.  Other notable reports today include: UPS ($1.53), MRK ($1.94), LUV ($0.38), MA ($3.21), INTC ($0.19), and CMG ($10.46).  Bottom line, disappointing earnings are becoming a new headwind on markets and solid results today will help stabilize sentiment (while more disappointing reports will add to headwinds).

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. 

Is Another Crash Imminent?

/in , /by

Is Another Crash Imminent? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is Another Crash Imminent?
  • Chart – M2 Money Supply Still Up Massively Despite QT
  • The Recent Gold Rally and Inflation Expectations

Stock futures are rebounding modestly this morning amid further stabilization in the Treasury market as big tech earnings come into focus while economic data overseas disappointed overnight.

The Eurozone PMI Composite Flash came in at 46.5. vs. (E) 47.4 with a softer than expected Services sub-index which added to existing recession worries in the EU overnight. And that soft data is contributing to the steady bond market this morning.

Looking into the U.S. session, there is one economic report to watch: PMI Composite Flash (E: 49.4), and as has been the case, a release that supports a soft-landing scenario (easing growth and falling price measures) will support stocks while a “hot” report that sends yields back higher will be a negative.

There are no Fed speakers today but there is a “policy-sensitive” 2-Yr Treasury Note auction at 1:00 p.m. ET.  If demand is weak, that could put upward pressure on yields and reintroduce a headwind on equities and other risk assets as big tech earnings come into focus this week.

Earnings Update

Earnings season continues to ramp up this week with: KO ($0.69), VZ ($1.17), GE ($0.56), MMM ($2.34), and SYF ($1.44) reporting before the bell. While MSFT ($2.65), GOOGL ($1.45), and V ($2.23) will release results after the close.

Investors will want to see some better than expected results from the big tech names as they have been responsible for most of the 2023 stock market gains. Any disappointment will almost certainly mean new lows in the major indices this week.

Is Another Crash Imminent

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?

/in , /by

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

What’s in Today’s Report:

  • Why Have Stocks Dropped (And Are the Reasons Legitimate?)
  • Weekly Market Preview:  Focus Turns to Earnings (And They Need To Be Good)
  • Weekly Economic Cheat Sheet:  Important Growth and Inflation Updates

Futures are solidly lower following a further increase in geopolitical tensions and a lack of domestic political progress over the weekend.

Attacks on Israel from Lebanon increased over the weekend, raising fears of a two-front conflict.

Domestically, political gridlock continued as nine Republicans are now running for Speaker. But it’s not clear any of them have enough support to actually become Speaker.

Today the calendar is quiet as there’s just one notable economic report, the Chicago Fed National Activity Index (E: 0.05), so focus will remain on yields.  The 10-year yield sits at 5.00% as of this writing, and the higher it goes today, the lower stocks will likely fall.  Any progress on electing a Speaker of the House will be welcomed by the markets and likely push yields lower.

On the earnings front, we get a lot of important reports later this week, including MSFT, AMZN, KO, VZ, META, and others. But they come on Tues/Wed/Thurs and today there are just two reports to watch:  CLF ($ 0.46) and LOGI ($0.60).

Why Have Stocks Dropped

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.