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Investors still view ‘bad data as good for stocks’

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Investors still view ‘bad data as good for stocks’: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Nvidia Earnings Spark a Rally in Tech Stocks

“For now, investors still view ‘bad data as good for stocks’ as it makes rate cuts more likely so a small miss vs. expectations should extend the early rally,” writes Sevens Report Research’s Tom Essaye.

Also, click here to view the full Barron’s article published on May 23rd, 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.

Breadth matters because it basically speaks to investor conviction about fundamentals

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Breadth matters because it basically speaks to investor conviction about fundamentals: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The S&P 500 Is Suffering From Bad Breadth Again

“Breadth matters because it basically speaks to investor conviction about fundamentals,” Sevens Report Research’s Tom Essaye tells Barron’s. “The more sectors that are rallying, the stronger the perception of underlying fundamentals (a rising tide lifts all boats). If just one sector is carrying the market (poor breadth) it’s viewed as a vulnerable market because fundamentals aren’t that strong outside of the one sector.”

Also, click here to view the full Barron’s article published on May 23rd, 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.

Explaining This Market to Clients (Summer Edition)

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Explaining This Market to Clients (Summer Edition): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Explaining This Market to Clients (Summer Edition)
  • Weekly Economic Preview – All Eyes on Inflation (Friday)

Futures are modestly higher, led by mega-cap tech, as traders return from the long weekend to mixed headlines.

Economically, an ECB survey showed a favorable dip in medium term (3-year) consumer inflation expectations which was well received by equity traders overnight.

Geopolitically, an Egyptian soldier was killed in a fire fight with Israeli forces at the Rafah border over the weekend while, separately, there were dozens of civilian casualties following an Israeli airstrike just north of Rafah leaving Middle East tensions as high as they’ve been in months (oil is up more than 1%).

Looking into today’s session, there are two economic reports to watch: S&P Case-Shiller Home Price Index (E: 0.3%) and Consumer Confidence (E: 95.3) while several Fed officials are scheduled to speak: Kashkari (9:55 a.m. ET), Cook (1:05 p.m. ET), and Daly (1:00 p.m. ET). The market will want to see more “goldilocks” economic data and preferably less-hawkish Fed chatter.

Additionally, there are two key Treasury auctions, the first for 2-Yr Notes at 11:30 a.m. ET, and the second for 5-Yr Notes at 1:00 p.m. ET. With the total amount being auctioned just shy of $150B, demand for the Notes will be closely watched and weak auction outcomes could push yields higher and weigh on stocks with key inflation data looming later in the week.

Join thousands 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.

Did the Last 48 Hours Make the Fed More Hawkish?

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Did the Last 48 Hours Make the Fed More Hawkish? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Did the Last 48 Hours Make the Fed More Hawkish?

Futures are modestly higher following a quiet night as markets bounce following Thursday’s high-rate driven declines.

Economically, UK Retail Sales declined –2.3% vs. (E ) -0.1%, although that’s not making a June cut more likely.

Geo-politically, there are reports Putin will seek a cease-fire in Ukraine, although that’s unconfirmed (it would be a surprise positive if true).

Given the looming long weekend we can expect quiet trading today but there are two notable economic reports:   Durable Goods Orders (E: -0.5%) and University of Michigan Inflation Expectations (1-Yr Inflation Expectations: 3.5%, 5-Year Inflation Expectations 3.1%). As yesterday demonstrated, strong data is “bad” for stocks in the near term so markets will want to see in-line readings or slightly soft numbers on both reports to help fuel a rebound from yesterday.

There is also one Fed speaker and it’s an important one, Waller at 9:35 a.m. ET, but it’s unlikely he’ll say anything surprising (he just spoke earlier this week).

Join thousands 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.

Investors will need to see economic data that remains goldilocks

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Investors will need to see economic data that remains goldilocks: Tom Essaye Quoted in SwissInfo.ch

US Futures Steady as Nvidia Results Grab Spotlight: Markets Wrap

“With stocks sitting on record highs investors will need to see economic data that remains ‘goldilocks,’ the absence of any hawkish Fed surprises, steady yields, good retailer earnings, and solid guidance from AI bellwether Nvidia to meaningfully advance beyond current levels,”  Tom Essaye at the Sevens Report said in a note to clients.  

Also, click here to view the full article published on May 22nd, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Swissinfoch logo

Lastly, 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 key is whether the data warrants a hike

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The key is whether the data warrants a hike: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Fed Minutes Spooked the Stock Market. They Probably Shouldn’t Have.

“The key is whether the data warrants a hike and there’s virtually nothing in the day that implies a hike is needed,” Sevens Report Reserach’s Tom Essaye told Barron’s. “So, I think this is much ado about nothing.”

Also, click here to view the full Barron’s article published on May 22nd, 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.

No relation to the recent geopolitical tensions

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No relation to the recent geopolitical tensions: Sevens Report Research Analysts, Quoted in Morningstar

Oil prices settle lower as traders fret over the outlook for demand

Analysts at Sevens Report Research wrote in Tuesday’s newsletter that the crash was deemed to be “an accident and had no relation to the recent geopolitical tensions between Iran and Israel, which allowed for some of the fear bids added on Friday ahead of the weekend to come unwound” at the start of Monday’s trading.

Also, click here to view the full MarketWatch article published on Morningstar on May 21st, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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.

Even after the revisions, the data was really mostly in line.

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Even after the revisions, the data was really mostly in line: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Market Is in a Trance. Wednesday’s Inflation Data Could Break It.

But Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that even after the revisions, the data was really mostly in line.

“The markets could be entering an extension of the sweet spot that they were in earlier in the year,” Essaye says. “If you’re looking out, there are definitely some things you want to pay attention to, because some of this data is starting to point in a not-great direction. But it’s not necessarily a reason to sell now.”

“We were in the bullish trance, and now Powell has kind of put us back into it by saying, ‘Well, no, we’re not going to hike rates. Probably going to cut rates once or twice’ or whatever,” Essaye says. “That kind of got us back into it. So it’s going to take a hot data point.”

Also, click here to view the full Barron’s article published on May 14th, 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.

“Good, bad and ugly” outcomes for the April consumer-price index reading.

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“Good, bad and ugly” outcomes for the April consumer-price index reading: Tom Essaye, founder of Sevens Report Research, Quoted in Morningstar

Stock market could suffer ‘ugly’ day if April CPI comes in above this level

Tom Essaye, founder of Sevens Report Research, took a look Tuesday at potential “good, bad and ugly” outcomes for the April consumer-price index reading.

So what would provoke an ugly reaction? Essaye puts the threshold at 3.9%.

A core reading at or above that threshold would be likely to spark a “solid selloff,” further entrenching the idea that inflation remains sticky and rates will be higher for longer, Essaye wrote. That has the potential of undoing much of the rally seen over the last two weeks, as investors would likely scale back rate-cut expectations, penciling in just one cut in December.

Also, click here to view the full MarketWatch article published on Morningstar on May 14th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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.

Even a small bout of stagflation would result in a 10%-20% decline in stocks

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Even a small bout of stagflation would result in a 10%-20% decline in stocks: Tom Essaye Quoted in MarketWatch

The economy could be heading toward 1970s-style stagflation. What it means for the stock market.

 “Stagflation doesn’t have to be as bad as it was in the 1970s, but for a stock market that’s trading above 21 times earnings, the truth is that even a small bout of stagflation would result in a 10%-20% decline in stocks,” said Tom Essaye, founder of Sevens Report Research, in a Monday note.

“Of course, comparing this period to the 1970s, where GDP growth was flat or negative and CPI was running more than 10%, [Powell’s] absolutely right [that] there is no stagflation,” said Essaye. But he added that it’s somewhat “dismissive” to say that just because things aren’t as bad as they were in the 1970s, any talk of stagflation is unwarranted.

“In an absolute sense,” economic growth is not at levels that would imply stagflation — but data releases are becoming “more conclusive that economic momentum is slowing,” Essaye said. “While stagnation isn’t here yet, the data is showing a greater chance of it occurring than any time in the last year and a half.”

Also, click here to view the full MarketWatch article published on May 13th, 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.