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Who’s Right on the Consumer? WMT (Positive) or TGT (Negative)

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Who’s Right on the Consumer?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Who’s Right on the Consumer?  WMT (Positive) or TGT (Negative)

Futures are little changed on disappointing NVDA earnings and after further escalation in the Russia/Ukraine war.

NVDA beat earnings estimates ($0.81 vs. (E) $0.74) but guidance disappointed at only 6.8% FQ4 revenue growth vs. (E) 11.75% and the stock is down 2% pre-market.

Geo-politically, Russia fired a non-nuclear ICBM into Ukraine for the first time, further escalating the conflict.

Today focus will turn back towards economic data as there are three notable reports (ranked in order or importance):  Jobless Claims (E: 219K), Philly Fed (E: 7.0) and Existing Home Sales (E: 3.90 million).  Given elevated Treasury yields, in-line to slightly soft data will be best for markets, as it reinforces a soft landing and would slightly boost December rate cut expectations.

There are also several Fed officials speaking today, including Hammack (8:45 a.m.), Goolsbee (12:25 p.m. ET) and Barr (4:40 p.m. ET) although they are unlikely to move markets (the Fed outlook is pretty known at this point and the looming jobs report will likely decide if we get a rate cut in December, or not).

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Why Did Stocks Drop Last Week?

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Why Did Stocks Drop Last Week?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop Last Week?
  • Weekly Market Preview:  Focus on Treasury Secretary, NVDA earnings and economic growth (Thursday/Friday).
  • Weekly Economic Cheat Sheet:  Important Growth Data Late This Week

Futures are little changed following a quiet weekend of news as markets continue to digest last week’s rise in Treasury yields, and the return of political surprises (via Trump’s cabinet announcements).

There were no notable economic reports overnight.

Politically, the major remaining cabinet pick from Trump is Treasury Secretary and it should come early this week (and another unorthodox choice would further roil markets).

Today the calendar is quiet as there is just one economic report, Housing Market Index (E: 43), and one Fed speaker, Goolsbee (10:00 a.m. ET).  So, focus will be on Trump’s cabinet (again, the more traditional choice for Treasury, the better for markets) and on the 10-year yield.  If it keeps rising, that will be a continued headwind on stocks.

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Where Are We In the Bull Market Cycle? (One Year Later)

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Where Are We In the Bull Market Cycle?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Where Are We In the Bull Market Cycle? (One Year Later)

Futures are moderately lower as markets continue to digest the market implications of the Republican win while economic data was mixed.

The U.S. Dollar at near two-year highs along with the 10-year yield pushing 4.50%, combined with Trump’s recent unorthodox cabinet picks, is causing investors to re-assess the potential impacts of the incoming Republican government.

Focus today will be on economic data and given the less dovish rhetoric from Fed officials this week, markets will want to see in-line to slightly soft reports to keep rate cuts on track.  If the data is hotter than expected, look for yields to rise and stocks to extend the early losses.  The important reports today include Retail Sales (E: 0.3%), Empire Manufacturing (0.0) and Industrial Production (E: -0.3%) and we have one notable Fed speaker, Williams (1:15 p.m. ET).

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Equities surged as a Republican sweep is the likely election outcome

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Equities surged as a Republican sweep is the likely election outcome: Tom Essaye Quoted in Morningstar

Dow soars as these areas are ‘likely market winners’ of potential Republican sweep

Equities surged as “a Republican sweep is the likely election outcome,” Tom Essaye, the founder and president of Sevens Report Research, said in a note Wednesday. “This likely ‘green lights’ a solid year-end rally as long as growth and the Fed perform as expected.”

The note described the Republican agenda as favoring “pro-growth policies,” citing tax cuts, deregulation, “a focus on domestic industries and negotiating better trade relationships.”

Essaye pointed to several exchange-traded funds as “the likely market winners from this policy stance,” including the Vanguard Value ETF VTV, which invests in large-cap value stocks in the U.S., and the small-cap equities-focused iShares Russell 2000 ETF IWM.

Also, click here to view the full MarketWatch article published in Morningstar on November 6th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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It’s been a stellar year so far for U.S. markets

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It’s been a stellar year so far for U.S. markets: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Why Trump’s Win Can Stoke the Bull Market for the Rest of 2024

It’s been a stellar year so far for U.S. markets. Investors should expect the surge to carry on until the end of 2024 now that Donald Trump has won the race to the White House, Sevens Report Research founder and president Tom Essaye said on Wednesday.

While the result isn’t “a bullish gamechanger” because stocks are already up so much this year, the election results “should spur a rally into year-end, barring any other major surprises,” he wrote in a research note.

The expectation that Trump could roll out pro-growth economic policies and tax cuts, combined with a solid macroeconomic environment, could power the S&P 500 past 6,000 points by the end of 2024, Essaye added.

Also, click here to view the full Barron’s article published on November 6th, 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.

Market Multiple Table: How High Can This Market Go?

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Market Multiple Table: How High Can Stocks Go?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table: How High Can This Market Go?

Stock futures are modestly lower with the dollar index at a multi-year high and the 10-Yr yield holding above 4.40%, a multi-month high, as traders look ahead to the CPI report.

Economically, Japanese PPI notably jumped from 2.8% to 3.4% y/y in October which raised inflation concerns in Asian markets.

Today, trader focus will almost exclusively be on the latest U.S. inflation data due out before the bell: CPI (E: 0.2% m/m, 2.6% y/y), Core CPI (E: 0.3% m/m, 3.3% y/y). A “hotter” than anticipated print will likely trigger hawkish money flows, pushing the dollar index and Treasury yields to new highs which would weigh on stocks while an as-expected or “cool” print would be well-received.

Additionally, there are several Fed speakers on the calendar who could move markets: Logan (9:45 a.m. ET),  Musalem (1:00 p.m. ET), and Schmid (1:30 p.m. ET).

Lastly, earnings season continues to slow down but a few notable companies reporting quarterly results today include: HUT (-$0.24), NU ($0.10), and CSCO ($0.87).

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Why the Bullish Thesis Got Stronger

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Why the Bullish Thesis Got Stronger: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why the Bullish Thesis Got Stronger
  • Weekly Market Preview: Does the S&P 500 Breakthrough 6,000?
  • Weekly Economic Cheat Sheet: CPI on Wednesday, Important Growth Data on Thursday

Futures are modestly higher on post-election momentum and following a very quiet weekend of news.

Parts of the Trump administration are starting to come into view, most notably that Scott Bessent is looking most likely to become Treasury Secretary and the market views that as bullish.

Economically, there were no notable reports overnight.

Today is Veteran’s Day so trading should be quiet as there are no economic reports or Fed speakers, while the bond market is closed.  However, there are important updates this week on inflation (CPI on Wednesday) and growth (numerous reports on Thursday/Friday) so the week will get busier.

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What Yesterday’s Rate Cut Means for Markets

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What Yesterday’s Rate Cut Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Yesterday’s Rate Cut Means for Markets

Futures are slightly lower mostly on digestion of the week’s news and after Chinese stimulus only met expectations.

China announced a 1.4 trillion-yuan fiscal stimulus program (so government spending) although that only met expectations and is seeing a mild “sell the news” reaction.

Today the calendar is relatively quiet (especially considering what a busy week it’s been already) but there is still one notable economic release, the University of Michigan Consumer Sentiment (E: 70.8) and, contained in that report, the One-Year Inflation Expectations (E: 2.7%).  Markets will want to see both numbers hit expectations and not be “Too Hot” (especially for inflation expectations).

We also have two Fed speakers today, Bowman (11:00 a.m. ET) and Musalem (2:30 p.m. ET), but given the Fed decision yesterday they shouldn’t move markets.

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FOMC Preview

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

What’s in Today’s Report:

  • FOMC Preview
  • EIA Data Takeaways – Oil Market Fundamentals Continue to Deteriorate

Futures are slightly higher this morning as markets are largely holding yesterday’s sizeable post-election gains with trader focus shifting to today’s Fed decision.

Economically, data was mostly solid overnight as Chinese exports jumped +12.7% y/y in October (+2.4% in September) while EU Retail Sales were inline with estimates, up 0.5% last month.

Today is lining up to be a critical day for markets as traders assess the big week-to-date gains. Early focus will be on economic data with two notable releases due before the open: Jobless Claims (E: 221K) and Productivity & Costs (E: 2.5%, 1.0%).

From there, markets are likely to turn sideways as traders position into the afternoon Fed events beginning with the FOMC Announcement at 2:00 p.m. ET, followed up by Fed Chair Powell’s press conference 2:30 p.m. ET. Anything other than the expected 25 basis point rate cut and steady forward guidance will almost certainly move markets today.

Finally, there are no big tech or major industrial earnings today but there are a few noteworthy companies due to report quarterly results today including: GOLD ($0.33), WBD ($-0.05), HAL ($0.75), SQ ($0.87), and ABNB ($2.17). However, to be clear, the Fed is the catalyst to watch today.

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Earnings across the board were disappointing

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Earnings across the board were disappointing : Tom Essaye Quoted in Blockworks

Major earnings week weighs on tech stocks

Tom Essaye, founder of Sevens Report Research, said it wasn’t just Big Tech weighing on equities Thursday. Earnings across the board were disappointing (looking at you, Uber, Ebay and Intercontinental Exchange), plus economic data looks like we may see higher rates for a more sustained period of time.

Also, click here to view the full Blockwork article published on November 1st, 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.