Posts

Jobs Day

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What’s in Today’s Report:

  • Why Inflation Might Not Be As Temporary as the Fed Thinks
  • OPEC Update and Oil Outlook

Futures are slightly higher ahead of the jobs report following a quiet night of news.

The only notable economic report overnight was Eurozone PPI, which rose 9.6% yoy vs. (E) 9.5% yoy.  That report isn’t moving markets, but it’s the second inflation report in two days to imply inflation pressures haven’t peaked.

There were no new developments on infrastructure.

Today the jobs number is key and expectations are as follows: Job Adds 675K, UE Rate 5.7%, Wages yoy 3.1%.  As long as the headline job adds number isn’t close to 1 million and the wages number doesn’t spike well above expectations, markets should be able to generally digest this report, even if it is a mild surprise.

Other economic indicators today include International Trade in Goods (E: -$71.2B) and Factory Orders (E: 1.3%) but we don’t expect them to move markets.

Tom Essaye Quoted in Bloomberg on June 14, 2021

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From Copper to Corn, Markets Show Peak Inflation Fear Has Passed

Even though inflation metrics are high, the pressure is starting to come off and that leaves investors to say…said Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

Tom Essaye Quoted in KITV News on June 7, 2021

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Dollar doldrums are back as inflation worries heat up

The market still views the Fed as the ‘most dovish’ global central bank, and as long as that’s the case, the dollar will have…said Tom Essaye, the founder and president of Sevens Report Research. Click here to read the full article.

Inflation Expectations Dashboard

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What’s in Today’s Report:

  • Sevens Report Inflation Expectations Dashboard
  • Chart: Gold Holds Key Trend Support

Stock futures are wavering between gains and losses this morning as traders digest mixed economic data and look ahead to a key inflation report due later in the week.

Economically, Japanese GDP was not as bad as feared in Q1 but German Industrial Production missed estimates as did the U.S. NFIB Small Business Optimism Index which is weighing modestly on sentiment this morning.

There are two economic reports to watch in the U.S. today: International Trade in Goods and Services (E: -$69.0B) and JOLTS (E: 8.045M). The latter will be the more important to watch as investors continue to look for clues regarding the state of the labor market recovery.

No Fed officials are scheduled to speak today however there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and a weak outcome could rekindle taper fears with Thursday’s CPI report coming into focus.

A Market Still In Search of a Catalyst

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What’s in Today’s Report:

  • Why This Market Still Needs A Positive Catalyst
  • Weekly Market Preview (Fed anticipation and Inflation)
  • Weekly Economic Cheat Sheet (Inflation Thursday and Employment Data Are Key)

Futures are slightly lower on underwhelming economic data and as markets digest last week’s rally.

Economic data was slightly disappointing as Chinese exports missed expectations (27.9% vs. (E) 32.1%) as did German Manufacturers’ Orders (-0.2% vs. (E) 1.0%).

The G-7 agreed in principle to a global minimum corporate tax and that is weighing slightly on global markets.  But, investors view implementation of the tax as taking a very, very long time (if it ever actually happens).

Today there are no notable economic reports and no Fed speakers so focus will be on any apparent infrastructure progress, although at this point any infrastructure deal likely won’t be big enough to provide material stimulus to the economy (and push markets higher).

Tom Essaye Quoted in Courthouse News Service on May 28, 2021

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Markets Eke Out Winning Week in Swirl of Data, Good and Bad

Put differently, we all know that inflation surged in April. The key is whether it keeps going through the summer. If inflation continues during the summer months that could cause volatility and… Essay wrote. Click here to read the full article.

 

Tom Essaye Quoted in Barron’s on May 27, 2021

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Stocks Edge Higher as Jobless Claims Continue to Decline

Inflation not being temporary is easily the biggest long-term risk to this market, because it will cause the Fed to get more…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Barron’s on June 1, 2021

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Stocks End Mixed After Another Inflation Red Flag

If we get that strong [PMI] number (along with strong pricing indices) then pressure will build on the Fed to at least acknowledge a discussion about…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
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Key Summer Market Events (Inflation Today, Fed Tomorrow)

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What’s in Today’s Report:

  • Key Summer Market Events Part 1:  Inflation
  • EIA Analysis and Oil Market Update

Futures are slightly lower following a generally quiet night of news, although on the margin markets are seeing global central banks get less dovish.

On Wednesday, the Reserve Bank of New Zealand had hawkish commentary, while overnight the Bank of Korea hinted at a rate hike before year-end.  Neither the Reserve Bank of New Zealand nor the Bank of Korea will move markets, but the bottom line is we are seeing a global rising tide of “less dovish” central bank policy, and that’s likely to cause volatility as we move forward throughout the year.

There was no market moving economic data overnight.

Today we get several notable economic reports including (in order of importance): Jobless Claims (E: 450K), Durable Goods (E: 0.7%), Revised Q2 GDP (6.5%), and Pending Home Sales (E: 2.0%).  Bottom line, markets will want to see solid, but not “Too Hot” economic data, and if we get that result the data should help stocks rally today.

Tom Essaye Quoted in Barron’s on May 25, 2021

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Shake Shack Pops, Domino’s Drops, and the Stock Market Is Rising

U.S. stock futures are extending yesterday’s gains this morning as easing inflation concerns…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.