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CPI Impacts Two of The Three Pillars of The Rally

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CPI impacts two of the three pillars of the rally: Tom Essaye Quoted in The Spokesman-Review

Wall Street takes risk off table before CPI report

CPI is key because if it halts its downward trend, markets will have to price in a more hawkish Fed. That would be a headwind on stocks, said Tom Essaye, who founded The Sevens Report newsletter.

“Put in a more familiar way, CPI impacts two of the three pillars of the rally: disinflation and expectation the Fed is done with rate hikes,” Essaye noted. “If CPI is too hot, both will be damaged.”

Also, click here to view the full Spokesman-Review article published on September 12th, 2023. However, to see Tom’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.

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Tech Shares Have Been Driving The Major Stock Indices So Far This Week

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Tech shares have been driving the major indices: Tom Essaye Quoted in Barron’s

Stocks Slip. Apple Event in Focus Ahead of CPI Data.

“Tech shares have been driving the major stock indices so far this week,” Essaye writes. “So any meaningful reaction in [AAPL] shares will likely move the broader indices as focus turns ahead to CPI tomorrow.”

With no major economic reports ahead of Wednesday’s release of the consumer price index for August, Sevens Report Research’s Tom Essaye writes that Apple’s (ticker: AAPL) new product event will be a key focus. The event is expected to unveil the next line of iPhones. Wall Street doesn’t foresee the device will be a massive step up from recent releases.

Also, click here to view the full Barron’s article published on September 12th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Tech Shares - Barron's Quote

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CPI remains the most important monthly economic metric

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CPI remains the most important monthly economic metric: Tom Essaye Quoted in MorningStar

Dow turns higher as Apple falls ahead of its iPhone event, with inflation data looming

“CPI remains the most important monthly economic metric for the simple reason that if CPI does not continue to decline, markets will have to price in a more hawkish Fed, and that would be a headwind on stocks,” said Tom Essaye, founder and president of Sevens Report Research, in a note Tuesday.

“Sensitivity to this report will be especially high tomorrow because there have been anecdotal signs that inflation may be leveling off or bouncing back,” he said.

A “good” CPI report would show core inflation, which excludes energy and food prices, rose 0.2% or less in August, according to Essaye. Economists polled by the Wall Street Journal have forecast that core CPI increased 0.2% last month and 4.3% year over year.

“A continued drop in core CPI will help to calm concerns that inflation is bouncing back, and that could trigger a solid drop in Treasury yields and a good relief rally in stocks,” said Essaye.

Also, click here to view the full Morningstar article published on September 12th, 2023. However, to see Tom’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.

Get defensive but hold onto the magnificent seven

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Get defensive but hold onto the magnificent seven: Tom Essaye Joins BNN Bloomberg

Get defensive but hold onto the magnificent seven: Tom Essaye

Tom Essaye, president of Sevens Report Research, joins BNN Bloomberg for his cautious outlook for the markets, getting more into defensive areas and staying away from the Arm IPO.

Also, click here to watch the full BNN Bloomberg video published on September 11th, 2023. However, to see Tom’s full comments on the current market environment in our daily report sign up here.

Get Defensive

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Headline and Core CPI – The Important Difference

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Difference Between Headline and Core CPI: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Important Difference Between Headline and Core CPI
  • NFIB Small Business Optimism Index Contradicts the “No-Landing” Scenario

U.S. stock futures are tracking global shares lower this morning following more disappointing economic data in the Eurozone and continued pressure on the tech sector.

AAPL shares are extending yesterday’s post-product launch declines this morning, therefore, weighing on the tech sector broadly in pre-market trading.

Economically, U.K. GDP dropped to -0.5% vs. (E) -0.2% in July after hot wage data yesterday, bolstering stagflation fears while EU Industrial Production fell -1.1% vs. (E) -0.7%. Despite the recently soft data, rates markets continue to price in a 75% chance of an ECB rate hike this week.

Today, focus will primarily be on inflation data and how Treasuries react to the release: CPI (0.6% m/m, 3.6% y/y), Core CPI (E: 0.2% m/m, 4.4% y/y).

There are no Fed speakers or Treasury auctions today so a “hot” CPI report will likely spark cross-asset volatility while a Goldilocks release will setup a possible extension of the early September relief rally.

Headline and Core CPI

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The Fundamental Focus of the Oil Market Has Shifted: Oil Futures

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Oil Futures Touch Fresh Highs: Sevens Report Analysts Quoted in Morningstar

Oil futures touch fresh highs for the year on bets for tighter global supplies

“The fundamental focus of the oil market has shifted from demand — more specifically concerns that a slowdown in global growth will hurt consumer spending on refined products — to the supply side as Russia and Saudi Arabia caught markets off guard with their output cut extension announcements,” analysts at Sevens Report Research wrote in Monday’s newsletter.

Factoring in the extended cuts, “many forecasts reflect deepening supply deficits in physical markets into the end of the year and that, paired with another wave of speculators getting scared out of the market by the latest OPEC+ surprise, has resulted in the latest leg higher to fresh 2023 highs in oil,” they said.

Looking ahead, the path of least resistance is higher for oil right now, with WTI “fast approaching our initial upside target of $89 [a] barrel,” the Sevens Report analysts said. “However, we remain in the camp that the onset of a recession will derail the rally.”

Also, click here to view the full Morningstar article published on September 11th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Oil

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.

CPI Preview Scenarios: Good, Bad, Ugly

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CPI Preview Scenarios: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview Scenarios: Good, Bad, Ugly
  • Table: CME FedWatch Tool Shows No Additional Rate Hikes This Cycle

Stock futures are modestly lower today as ORCL offered disappointed revenue guidance after yesterday’s close. And, while economic data was largely disappointing overnight.

Economically, the German ZEW Survey’s Current Conditions Index fell to -79.4 vs. (E) -71.3. U.K. Also, wage growth rose to 8.5% vs. (E) 8.2% stoking stagflation concerns in Europe.

Domestically, the NFIB Small Business Optimism Index fell to 91.3 vs. (E) 91.7 in August. This was well below the long-term average of 98.0 pointing to deteriorating sentiment among small business owners.

Today, there are no additional economic reports today and no Fed officials are scheduled to speak which will leave equity traders focused on AAPL’s new product event. Tech shares have been driving the major stock indices so far this week (TSLA and QCOM yesterday, ORCL this morning) so any meaningful reaction in AAPL shares will likely move the broader indices as focus turns ahead to CPI tomorrow.

Finally, there is a 10-Yr T-Note auction at 1:00 p.m. ET that could move fixed-income markets and see equities reprice inflation expectations ahead of tomorrow’s widely anticipated inflation release, but no major moves are expected before tomorrow’s CPI print.

CPI Preview

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Stable Treasury Yields: Tom Essaye’s Insight

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Stable Treasury Yields: Tom Essaye Quoted in Barron’s

Stocks Are Rising, With Tech Leading the Way Higher

Technology stocks were leading the broader market higher in early Monday trading as traders braced for a busy week ahead.

“Today there are no notable economic reports nor any Fed speakers, so focus will remain on Treasury yields and if yields are relatively stable, then stocks can rebound from last week’s losses,” writes Sevens Report Research’s Tom Essaye. 

The big event of the week will be the release of the consumer-price index for August on Wednesday. The inflation reading will inform the Federal Reserve’s next moves on inflation. 

Also, click here to view the full Barron’s article published on September 11th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Treasury Yields

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.

Focus Remains on Treasury Yields Today

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Today’s Focus Remains on Treasury Yields – Tom Essaye Quoted in MarketWatch

Dow edges up as stocks look to rebound ahead of coming inflation, retail sales data

U.S. stock indexes were up as of Monday afternoon, with consumer discretionary shares and several technology companies leading the broader market higher, as traders braced for a busy week of economic data releases.

“No major U.S. economic data is set for release on Monday, so the focus will remain on Treasury yields”, said Tom Essaye, president of the Sevens Report Research. 

“If yields are relatively stable, then stocks can rebound from last week’s losses”, Essaye said in an email.

Also, click here to view the full MarketWatch article published on September 11th, 2023. However, to see Tom’s full comments on today’s market insights sign up here.

Treasury Yields

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.

Navigating Market Signals: Tom Essaye’s Insight on Growth and Demand

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Market Growth and Demand Signals – Tom Essaye Quoted in Barron’s: Strengthen your market knowledge with a free trial of The Sevens Report.

U.S. Stock Futures Slip as Higher Oil Prices Renew Inflation Fears

Economic data on tap includes the ISM services index for August, the trade balance for July, and the release of the Fed’s Beige Book, an anecdotal report of current economic conditions published eight times a year.

“As has been the case lately, the market is looking for signs of slowing demand but not a sharp downturn in growth,” said Tom Essaye, the founder of Sevens Report Research.

“The ISM will be the more important report to watch so a number that is ‘too hot’ or ‘too cold’ will likely see yesterday’s stock market declines extended, while a Goldilocks print will help markets stabilize.”

Also, click here to view the full Barron’s article published on September 7th, 2023. However, to see Tom’s full comments on market growth and demand signals sign up here.

Market Growth and Demand Signals

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