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FOMC Meeting Preview

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What’s in Today’s Report:

  • FOMC Preview
  • Empire State Manufacturing Survey Takeaways

Futures are lower amid an elevated sense of market uncertainty after President Trump left the G-7 summit early as tensions between Israel and Iran remain elevated.

Economically, Economic Sentiment within the latest German ZEW Survey rose from 25.2 to 47.5 vs. (E) 31.3, however European stocks are trading with a heavy tone amid the elevated geopolitical tensions in the Middle East.

Today, there are several noteworthy economic reports to watch including: Retail Sales (E: -0.6%), Import & Export Prices (E: -0.3%, -0.1%),  Industrial Production (E: 0.1%), Business Inventories (E: 0.0%), and the Housing Market Index (E: 36).

Beyond the economic data, the June FOMC meeting gets underway today which should prompt a sense of “Fed paralysis” as investors await clarity on the future path of monetary policy.

Finally, there are two late-season earnings releases to watch: JBL ($2.15) and LZB ($0.93) but neither should move the broad markets as focus shifts to the Fed decision.

Focus will remain on geopolitical headlines

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Focus will remain on geopolitical headlines: Sevens Report Editor Tom Essaye Quoted in Bloomberg

Stocks Rise on Reports Iran Wants to Restart Talks: Markets Wrap

“Focus will remain on geopolitical headlines, but as long as the conflict stays limited between Israel and Iran, it’s unlikely to materially impact the markets,” said Tom Essaye at The Sevens Report.

Also, click here to view the full article featured on Bloomberg published on June 15th, 2025. 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

 

This market is solidly above any fundamental valuation

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This market is solidly above any fundamental valuation: Sevens Report Founder, Tom Essaye Quoted in MarketWatch

Stock-market rally has pushed S&P 500 above ‘fundamental valuation levels’

“This market is solidly above any fundamental valuation and really only justifiable if we assume extremely positive resolution to the numerous risks facing this market and economy,” Tom Essaye, founder and president of Sevens Report Research, said in a note Tuesday. “The S&P 500 at these levels reflects a very optimistic view of how this all works out.”

The stock market faces the risk of tariffs slowing the economy and hurting corporate earnings, as well as concerns about inflation and the U.S. fiscal outlook, according to his note.

“The environment is much better than what was feared in April, but it’s still an environment with several distinct equity market headwinds, especially compared to the start of the year,” said Essaye. “While the rally is legitimate, the S&P 500 is solidly above fundamental valuation levels.”

Also, click here to view the full MarketWatch article, published on June 10th, 2025. 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.

June Market Multiple Table (All About TACO)

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What’s in Today’s Report:

  • June Market Multiple Table Update – All About “TACO”

Futures are slightly higher this morning as traders remain optimistic about progress in the ongoing U.S.-China trade talks ahead of the May CPI release tomorrow.

Economically, the NFIB Small Business Optimism Index rose 3 points to 98.8 in May, topping estimates of 95.9 which is supporting modest gains in U.S. equity futures.

There are no additional economic reports today and no Fed officials are scheduled to speak which limits potential catalysts to today’s Treasury auctions which include 6-Week and 52-Week Bill auctions at 11:30 a.m. ET and a (more important) 3-Yr Note auction at 1:30 p.m. ET.

Late season earnings continue to trickle in as well with: ASO ($0.84), SJM ($2.25), UNFI ($0.24), GME ($0.08), and PLAY ($0.96) all due to report Q1 results today.

Bottom line, today is lining up to be fairly quiet as far as scheduled catalysts are concerned. However, any materially positive or negative trade talk headlines out of London where U.S. and Chinese negotiations remain underway, could meaningfully move markets today before focus turns to tomorrow’s critical May CPI release.

Jobs Day

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What’s in Today’s Report:

  • Jobs Report Preview (Abbreviated)
  • Jobless Claims Show Potential Cracks Emerging in Labor Market
  • Productivity and Costs Point to Sticky Wage Inflation
  • Collapsing Trade Deficit Reveals Significant Tariff Impact on Trade

Futures are modestly higher this morning as TSLA shares (+4%) are recovering some of yesterday’s heavy losses amid prospects of a Trump-Musk call today while economic data was solid overnight ahead of today’s jobs report.

Economically, Eurozone GDP rose +1.5% y/y in Q1 vs. (E) +1.3% while Retail Sales rose +2.3% vs. (E) +1.0% y/y. Both data points support the case for ongoing resilience and bolster prospects for a soft economic landing in the EU.

Market will be primarily focused on the May BLS Employment Situation Report this morning at 8:30 a.m. ET (E: 129K Job-Adds, 4.2% Unemployment Rate, 3.7% Wage Growth).

From there focus will shift to the financial news headlines as traders look for additional insight on trade negotiations, particularly talks between the U.S. and both Europe and China, however there is a “second tiered” economic release in the afternoon with Consumer Credit (E: $10.2B) due out at 3:00 p.m. ET.

Finally, two late season earnings releases to watch today are ABM ($0.87) and MANU ($-0.33) but neither is likely to meaningfully move markets with the focus on the May jobs report.

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist
  • JOLTS Data Takeaways – A Rise in Job Openings Signals Resilient Labor Market

Stock futures have reversed from overnight losses to trade with moderate gains in the pre-market largely thanks to upbeat composite PMI data in Europe.

Economically, the Eurozone’s Final Composite PMI came in at 50.2 vs. (E) 49.5 mostly due to a better than expected Services Index component which firmed to 49.7 vs. the Flash print of 48.9.

Today, there are two more noteworthy domestic economic releases due to be released; the May ADP Employment Report (E: 110K) ahead of the open, and the ISM Services PMI (E: 52.0) shortly after the bell. Investors will be looking for more evidence of labor market resilience in the ADP release and evidence of strong consumer spending and preferably cooling inflation pressures in the ISM data.

There are two more Fed officials speaking today: Bostic & Cook (8:30 a.m. ET) but the narrative has not materially changed since the May Fed meeting and isn’t expected to as the Fed is set to remain data-dependent for the foreseeable future.

Finally, there are a few more noteworthy earnings releases today that could impact markets including DLTR ($1.19), FIVE ($0.83), and PVH ($2.23). As retail and consumer focused brands, any mention of weakness in consumer spending trends could pour cold water on the early June rally.

What Is the “TACO Trade?”

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What’s in Today’s Report:

  • The “TACO Trade” and Why It Matters to You
  • Durable Goods Orders Show Cracks Emerging in Business Spending
  • Consumer Confidence Rebounds – Chart

Equity markets initially traded with a risk-off tone overnight thanks to a rise in global bond yields on the back of a soft Japanese government debt auction, but futures are back to flat ahead of the Fed minutes this afternoon and NVDA earnings after the close.

There is one lesser followed economic report today: Richmond Fed Manufacturing Index (E: -9.0), but barring a major surprise, the releasee is unlikely to materially move markets given other catalyst in focus.

One of those catalysts will be the Fed minutes release this afternoon at 2:00 p.m. ET as traders will look for any fresh insight as to when the next rate cut will occur or clarity on the FOMC’s outlook for the economy/inflation in the quarters ahead.

As mentioned, a soft JGB auction overnight weighed on global risk assets. As such, today’s Treasury auctions, the first for 4-Month Bills at 11:30 a.m. ET and the second for 5-Yr Notes at 1:00 p.m. ET both have potential to impact equity trading today (recall it was a 20-Yr auction that sparked last week’s mid-week selloff).

Finally, one of the last major earnings releases of the season will hit after the close with NVDA (E: $0.80) reporting post-market. A few other noteworthy late-season reports today include:  DKS ($3.37), ANF ($1.36), M ($0.14), CRM ($1.87), and ELF ($0.57).

Moody’s downgraded U.S. sovereign debt

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Moody’s downgraded U.S. sovereign debt: Sevens Report Analysts Quoted in Investing.com

What the Moody’s downgrade means for markets

According to the latest Sevens Report, the move is unlikely to drive long-term market direction.

“Moody’s downgraded U.S. sovereign debt to Aa1 from Aaa. That downgrade boosted long-term Treasury yields, as some investors sold long-term Treasuries,” the analysts wrote.

Stocks opened lower Monday, but Sevens emphasized that the downgrade “revealed nothing new.”

But Sevens called the timing questionable: “Downgrading U.S. debt for larger deficits and rising interest costs is the financial equivalent to saying ‘water is wet.’”

Sevens said, “There’s been no dramatic deterioration lately,” and noted that speculative fears tied to potential legislation “don’t justify the downgrade.”

“The deteriorating fiscal situation hasn’t stopped stocks from rallying over the past few years and that’s unlikely to change anytime soon.”

Also, click here to view the full article featured on Investing.com published on May 20th, 2025. 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.

Alleviate consumer-demand concerns and recession worries

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Alleviate consumer-demand concerns and recession worries: Tyler Richey, editor of Sevens Report Technicals Quoted in MarketWatch

U.S. oil prices settle at highest in 3 weeks as trade-war optimism eases consumer-demand concerns

U.S. benchmark oil prices settled Tuesday at their highest in three weeks, as trade-war optimism helped “alleviate consumer-demand concerns and recession worries,” said Tyler Richey, co-editor at Sevens Report Research.

A multiyear low in annualized U.S. headline inflation was also a “welcomed surprise that effectively poured gasoline on an already raging risk-on fire across financial markets since the better-than-anticipated outcome of the U.S.-China trade negotiations over the weekend,” he told MarketWatch.

A continued relief rally seems to be likely in the weeks ahead, with the $70- to $72-a-barrel range the “first logical upside price target for WTI,” said Richey.

Also, click here to view the full article featured on MarketWatch published on May 14th, 2025. 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.

Where is the Trump Put Now?

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What’s in Today’s Report:

  • Where is the Trump Put Now?
  • Weekly Market Preview:  Stagflation Update (Real Risk or Not?)
  • Weekly Economic Cheat Sheet:  CPI Tuesday, Key Growth Data on Thursday

Futures are surging (up more than 2%) on larger than expected tariff reduction between the U.S. and China.

The U.S. reduced tariffs on Chinese imports to 30% while China cut tariffs on U.S. imports to just 10%, significantly de-escalating the global trade war.

The tariff reduction will be in effect for 90 days while negotiations occur on a longer-term trade solution.

There are no notable economic reports today and just one Fed speaker, Kugler at 10:25 a.m. ET and she shouldn’t move markets.  So, markets will be driven by trade commentary and the tone around the U.S./China de-escalation.  Given upward momentum, more trade happy talk will help extend the rally.