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Is the Bond Bull Market Over? (Central Bank Preview)

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SL: Is the Bond Bull Market Over? (Central Bank Preview)

In the next 24 hours we’re going to get the answer to two very important questions:

  1. Is the Bond Bull Market Over?
  2. Have We Seen the Highs in Stocks for 2016?

And, it’s the Bank of Japan that likely will decide the answers to those questions, which will decide whether we see a potentially sharp decline in both stocks and bonds.

I’m not one for patting myself on the back, but I don’t know of many other research firms that were pounding the table back in August (when the market was quiet) saying:

  1. The July rally in stocks was in trouble because global bond yields were moving higher (they did, and the S&P 500 is down 2% from the August highs), and
  2. That the Bank of Japan and ECB were more important to US stocks than the Fed (the ECB caused a pullback two weeks ago and the Bank of Japan may do so tomorrow).

So, now I’m reiterating that tomorrow is a potentially very important day for clients’ stock and bond holdings, because even if we don’t see a lot of volatility immediately following the meetings, the Bank of Japan decision may mean the continuation of this rally in global bond yields, and the decline in stocks.


And, that could have significant consequences on clients returns as we enter the fourth quarter.

We are committed to making sure our paid subscribers know, before their competition, whether the Bank of Japan will cause global bond yields to move higher or lower, because that will be the key to getting clients properly positioned to outperform in Q4.

We’ve already delivered our Plain-English BOJ Preview to paid subscribers and they already know:

  1. What The Market Expects from the BOJ
  2. What will Make the Meeting “Dovish” and the likely market response
  3. What will Make the Meeting “Hawkish” and the likely market response

So, tomorrow, while other advisors and investors are searching WSJ.com, MarketWatch or CNBC to try and determine whether the meetings were bullish or bearish for stocks and bonds, our subscribers will already know.

But, more importantly, our subscribers know that at 7 a.m. Thursday morning we will deliver clear, Plain-English analysis of what the meetings mean for all asset classes (Stocks, Bonds, Commodities, Currencies) in the short and long term, and what tactical ETFs or general allocations we think will outperform in Q4 and beyond (and if that means raising cash, we’ll say it!).

Our paid subscribers won’t have to wait for a delayed, compliance-approved recap from their brokerage firm that just explains what the BOJ or Fed did, and ignores how to either protect gains or profit from the decisions.

We are going to tell our subscribers (at 7 a.m., and in plain English): 1) What Happened, 2) What it Means for Client Holdings (Stocks, Bonds, OI, Gold, the Dollar) and 3) How We Think We Can Make Money from It.

And, because this is such an important time for markets, we will be hosting a special webinar this Thursday at 1 P.M. EDT titled: “Breakout or Breakdown? 4th Quarter Market Preview.”

We will discuss the outlook for both stocks and bonds (and how we think investors should be positioned) heading into the 4th quarter.

There are a lot of moving pieces to tomorrow’s BOJ meeting and there aren’t a lot of clear, easy-to-read previews out there, so I’ve included an excerpt of our BOJ Preview as a courtesy:

 

BOJ Preview: What’s Expected

The fear going into tomorrow’s meeting will be that the BOJ will tacitly admit that it is indeed out of bullets, and is no longer able to provide meaningful stimulus to the Japanese economy. And while Japan is a unique case, this matters to all developed stock markets for two reasons.

  • First, and most directly, if the BOJ raises a symbolic white flag tomorrow, Japanese Government Bond yields will keep rising, which will make US Treasury yields rise, and that will keep a headwind on stocks.

  • Second, global stock markets have been supported (or propped up, depending on your definition) by the idea of ever more accommodative central banks. If the most aggressive central bank just declared itself impotent to spur further growth or inflation, what does that say about the ability of other central banks to support stocks prices/the economy if we see a slowdown? I often say at its heart, the market is little more than a confidence indicator, and a BOJ that disappoints markets again will strike a big blow to market confidence.

Bottom line, for global stock and bond markets that have been driven higher by the expectation of forever-low rates and ever-increasing central bank stimulus, having the most active player tacitly admit defeat is not good.

Now that we have the context, let’s look at what’s expected (there are a lot of moving pieces here, so bear with me):

  • QE: The first thing I will look at when I get up Wednesday will be to see if the BOJ increased the amount of QE. What’s Expected: No change to QE. If there is no change to QE, this BOJ decision will be at best neutral for stocks.
    • Dovish If (and Likely Market Reaction): Restricted for Subscribers
    • Hawkish If (and Likely Market Reaction): Restricted for Subscribers

     

  • Interest Rates:
    What’s Expected: Deposit Rate Cut from -.1% to -.3%.

     

    • Dovish If (and Likely Market Reaction): Restricted for Subscribers
    • Hawkish If (and Likely Market Reaction): Restricted for Subscribers

Wildcard to Watch: If the BOJ increases the inflation target from 2% to 3% (or close to 3%) that will be a surprise dovish move, and be taken as an unexpected positive (positive for stocks, negative for global bond yields).

 

Have a Plan In Place If Yields Keep Rising (and Stocks Keep Falling)

If you’re like me, and most advisors and investors, the biggest risk for tomorrow’s meetings is that global bond yields keep rising and stocks keep falling, creating an extension of the past 10 days where both stocks and bond holdings are falling together.

Given that risk, we spent last week providing subscribers with our “Higher Rate Playbook” they can refer to if we see that negative outcome, because in that scenario protecting profits and finding sectors that can outperform will be critically important! Paid subscribers already have this tactical playbook they can refer to, because we all know thinking clearly gets much more difficult when markets are falling!  

Play #1: Get Short the Long End of the Yield Curve, and/or Reduce the Overall Duration in any Bond Ladders

If we see a sustained decline in bonds/rally in yields, the belly and long end of the yield curve will get hit much harder than the short end of the yield curve.

There are two reasons for this:

First, the long end (say beyond 10 years) is over inflated because of foreign money, and as such has a lot further to fall before we get to compelling values.

Second, the short end of the curve (really 2 years or less) trades off Fed expectations, and the Fed simply isn’t going to raise rates quickly regardless of what happens in the markets (and especially if we see a selloff in stocks). So, the Fed will anchor the short end of the yield curve while the longer end rises, meaning the declines in short-term bonds will be less than in longer-term bonds.

ETFs to Get “Short” the Long Bond (there are many ETFs to do this but this is a list of the most liquid and targeted): Restricted for Subscribers

What to Buy in the Bond Markets: Restricted for Subscribers.
We don’t think everything in the bond market is toxic and we continue to have a top pick in the fixed income market for incremental capital that is less than five-year duration and the best alternative in a bond market that may be broadly declining.


Play #2: Focus on Good (but not Great) Credit Quality in Corporates

First, I think there may be opportunities for additional yield in the tier right below the top end of investment grade.
Point being, I would take the extra yield in that space between AAAs and junk, because barring a broad economic slowdown, corporate balance sheets are as strong as they’ve been in years.

Second, if I had a large allocation to junk bonds, I would rotate into higher-quality corporates because junk will get hit, and hit hard, in a declining bond market (think of junk bonds as the “subprime” of the bond market). Yes, junk pays a good yield, but in a rising rate environment it’s not worth the incremental risk.

How to Get Short Junk Bonds: Restricted for Subscribers.

How to Put on a Long Investment Grade/Short Junk Spread:
Restricted for Subscribers.


Play 3: Shift Exposure in US Stocks Out of “Yield Proxy Sectors.” (Know the difference between high-yielding sectors and truly defensive sectors).

If bonds and stocks keep falling, sector selection is going to become very important, and knowing the difference between truly “defensive” sectors vs. sectors that pay big dividends will matter for performance.

We provided the specific defensive sectors we like to paid subscribers in a report last week.

Play 4: Get a General Hedge Against “Risk Off.”

For over a year now we’ve used a specific inverse ETF as a broad hedge against a “risk-off” move in stocks, as this ETF has direct, specific exposure to some of the weakest sectors of the market, and as such can cushion any broad declines in the markets (like we saw in August/December 2015 and in January/February 2016).

We provided this specific ETF to subscribers once again in a report last week.


To be clear, I’m not advocating taking any of these steps right now, as it’s simply not clear that the bond market has indeed turned. So, we have to be wary of (another) head fake in this multi-year bull market.

But, if the bond market does turn and 10-year Treasury yield moves towards 2%, it is important that advisors have a plan before the declines start, because things could get ugly quickly.

If you don’t have a morning report that is going to give you the plain-spoken, practical analysis that will help you navigate the BOJ and Fed decisions tomorrow, and help you get positioned properly to outperform into year end, then please consider a quarterly subscription to The Sevens Report.

There is no penalty to cancel, no long-term commitment, and it costs less per month than one client lunch!

With thousands of advisor subscribers from virtually every firm on Wall Street and a 90% initial retention rate, we are very confident we offer the best value in the private research market.

I am continuing to extend a special offer to new subscribers of our full, daily report that we call our “2-week grace period.”

If you subscribe to The Sevens Report today, and after the first two weeks you are not completely satisfied, we will refund your first quarterly payment, in full, no questions asked.

Click this link to begin your quarterly subscription today.

Value Add Research That Can Help You Finish 2016 Strong!

Our subscribers have told us how our focus on medium-term, tactical opportunities and risks has helped them outperform for clients and grow their businesses.

We continue to get strong feedback that our report is: Providing value, helping our clients outperform markets, and helping them build their books:

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Begin your subscription to The Sevens Report right now by clicking this link and being redirected to our secure order form.

 
 



Finally, everything in business is a trade-off between capital and returns.

So, if you commit to an annual subscription, you get one month free, a savings of $65. To sign up for an annual subscription simply click here.
 


Best,
Tom

Tom Essaye
Editor, The Sevens Report

 

 

 

Market Update: Buy, Sell or Hold

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Last night my wife and I went out to dinner with friends. Shortly after we sat down, the conversation shifted to work, and eventually to what I do each day at The Sevens Report.

When describing the value that The Sevens Report
provides to our paid subscribers, my wife’s friend said, “so you’re basically a navigator of markets” for financial professionals.

It’s really a great analogy, as our goal at The Sevens Report is to wake up each day and help our subscribers navigate these complex markets, and provide the best value in market analysis out there today.

I created this report because I know that most financial advisors and professionals are not glued to blinking screens from 9:00 – 4:00 each day.

They are discussing the financial goals of their clients and mapping a financial course to reach those goals. Most of their time is spent building and fostering relationships, not analyzing Fed commentary, studying the yield curve, or digging through an oil inventory report.

The most successful advisors use tools like The Sevens Report
to stay ahead of the markets (stocks, bonds, currencies and commodities) and to make sure their clients are positioned to both outperform while also being protected from any financial “storm” that may blow up.

Specifically, we take complex macro-economic concepts (like ECB QE, Chinese economic policies, implication of rising interest rates, GDP, FOMC Statements, etc.) and tell you:

1) What you need to know

2) What will move markets, and

3) What will make those events positive or negative for stocks and other asset classes.

Every day at 7 a.m. we deliver this information, so you can show your clients you’re on top of the markets with a plan to outperform, regardless of the environment.

Stocks saw their first decent pullback in weeks Tuesday as an initial spike higher in Treasury yields following disappointment over underwhelming Japanese fiscal stimulus weighed on stocks.

And, with the Bank of England decision looming tomorrow and an important jobs report beyond that, the chances of rates moving higher are rising, and that’s a potential risk to stocks.

As a courtesy we have included analysis on yesterday’s selloff for you today:

Bottom Line—The Danger of Expectations

Yesterday’s surprise dip in stocks isn’t changing the outlook for markets, and including yesterday’s dip we can chalk this recent price action up to consolidation of the recent rally. In fact, part of the reason yesterday’s selloff caught people by surprise was because the market’s gone straight up for some five consecutive weeks.

Beyond the short term, though, I do believe yesterday’s reaction validates what we’ve been saying about this rally since it started after Brexit—namely that it is founded on extreme dovish expectations for central banks, and extremely low expectations for interest rates well into the future (like years in to the future). Given that extreme expectation, markets are at a constant risk of a reset.

To that point, it’s important to understand that over the past few days Japanese authorities have eased policy further.

  • First, the BOJ increased its purchases of ETFs.
  • Second, the Abe administration added 7 trillion yen of new government spending to stimulate the economy.

And, tomorrow the Bank of England will almost certainly cut rates (more stimulus).

But, the actions by the BOJ and only a rate cut by the BOE (meaning no more QE) will underwhelm markets because of the absurdity of expectations with regards to policy.

Literally the only thing that would have pleased markets recently is if The Bank of Japan and Abe administration would have instituted “helicopter money” by:

1) Floating a 50-year bond Japanese government bond,

2) Having the Bank of Japan buy those bonds with printed money and

3) The Japanese government spend the BOJ’s money in the economy!

Ten years ago, even proposing the idea of doing something like that would have made you a candidate for an economist insane asylum!

Now, it’s expected, and the culprit is the central banks themselves who have trained markets that if currencies rise too much and stocks go down enough, they will do whatever it takes to placate the investor class.

That remains one of my biggest issues with this rally. It’s built on the idea of forever-low rates, but central banks have consistently disappointed since Brexit, and the BOE may do it again tomorrow.

This is a theoretical rant, but at some point this system will break.

Maybe we’ll be at S&P 500 2500 before it does, but this relentless appetite by markets for more and more stimulus isn’t healthy longer term, and this week’s price action has made me all the more concerned that unless we get back to some state of normalcy in monetary policy sometime soon, the fallout for all this will be extreme.

Making this rant practical, central banks have consistently underwhelmed markets since Brexit and it’s starting to take its toll as the rally has stalled.

If the Bank of England disappoints markets tomorrow, and Friday’s Jobs Report runs “Too Hot” that will cause a move higher in bond yields, and that could well signal an impending pullback.

Tomorrow’s edition of The Sevens Report will be sent to paid subscribers shortly after 7 a.m. so we can tell them the market implications of the Bank of England decision. And, it’ll include our “Jobs Report Preview” that will directly tell subscribers what specific levels of a jobs report will cause Treasury yields to rise, and stocks to drop.

Click this link to begin your quarterly subscription and make sure you have an analyst team committed to helping you navigate this still challenging market.

Use Market Volatility to Your Advantage

The Sevens Report isn’t just another research tip sheet that’s designed to tell you whether stocks are going to go up or down. Rather, it’s a tool we have created for the purpose of helping advisors:

  1.  Attract more clients
  2.  Increase assets under management
  3.  Improve retention

In fact, The Sevens Report helped thousands of your colleagues and competitors at wirehouse firms and smaller RIAs be more efficient and more effective in finding and closing new clients since we launched in 2012, and we are doing it again in 2016.

We know this because last year, an advisor from Florida called to personally tell us that sharing The Sevens Report with one of his larger prospects helped him land the $25 million account!!!  

He said the independent analysis provided talking points for him to discuss in the meeting, and it helped show his prospect that he wasn’t all about “touting the company line.”

Another FA at an independent firm told us that our analysis of the recent stock market sell-off saved his clients a substantial amount of money.

He wrote, “Thanks for your continued insight; it has saved my clients over $2M USD this year… Keep up the great work!”

These are the results our subscribers are achieving with The Sevens Report.

And, we know our product delivers because we have a nearly unprecedented retention rate of over 90%.

2016 has already been a volatile year, and with divergent central bank policies emerging around the globe, still-volatile oil prices, and important political events (Italian and US elections) looming, markets are going to stay volatile, so consider making a small investment in your business that can:

1) Save You An Hour Each Day

2) Help You Make Better Investment Returns

3) Increase Your Market Knowledge and Confidence When Talking with Prospects

Affluent clients want communication on the markets that is not “boiler plate” strategy updates from your broker dealer.  They are expecting you to know what is happening in the markets and how it is affecting their portfolios, especially in this difficult environment. 

We created The Sevens Report, so that advisors can make sure they have an independent analyst that communicates with them every day and quickly identifies for them the risks and opportunities for:

  • Stocks
  • Bonds
  • Currencies
  • Commodities, and
  • Interprets what economic data means for the market. 

Most of our subscribers are not actively trading clients’ accounts.  However, they can demonstrate to their clients that they weren’t blindsided by the recent volatility
thanks to The Sevens Report.

That’s the kind of analysis that leads to More Clients and ultimately More AUM.

So, why not make an investment in yourself and your business in 2016? We are confident it will produce returns many times greater than the cost (which is less per month than one client lunch).

Because of the great response we have seen, I am continuing to extend a special offer to new subscribers of our full, daily report that we call our “2 week grace period.”

If you subscribe to The Sevens Report today, and after the first two weeks you are not completely satisfied, we will refund your first quarterly payment, in full, no questions asked.

Subscriptions start at just $65 per month, billed quarterly, and with the option to cancel any time prior to the beginning of the next quarter, there’s simply no reason why you shouldn’t subscribe to The Sevens Report right now.

Begin your subscription to The Sevens Report right now by clicking this link and being redirected to our secure order form.

Finally, everything in business is a trade-off between capital and returns.

So, if you commit to an annual subscription, you get one month free, a savings of $65. To sign up for an annual subscription simply click here.

Best,
Tom

Tom Essaye
Editor, The Sevens Report

Weekly Economic Cheat Sheet 10/26/15

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Last Week

Global markets got a badly needed boost of confidence last week from economic data, as reports gave further proof that the Chinese economy is stabilizing and that turmoil from the emerging markets is not dragging European and US economies downward. That, combined with more global central bank easing (the PBOC cut rates Friday and the ECB plans on doing more QE in December), pushed stocks to two-month highs.

The most important data and activity last week came from China. Early last week Q3 Chinese GDP slightly beat estimates at 6.9% vs. (E ) 6.8% while September Retail Sales also beat expectations. The data wasn’t universally positive, as September Fixed Asset Investment and industrial Production slightly missed estimates, but those numbers, combined with August data and September manufacturing PMIs, does imply the Chinese economy is stabilizing.

That helped markets broadly to start last week, and a very active PBOC helped support markets throughout the week. Last Wednesday, the PBOC made targeted liquidity injections into 11 financial institutions to promote lending, and on Friday the PBOC did a (somewhat) surprise 25-basis-point interest rate cut and 50-basis-point reserve requirement cut.

Bottom line on China last week was economic data continued to get better, and while data is still far from “good” on an absolute basis, it is stabilizing, and Chinese authorities continue to actively support the economy.

Looking more globally, the October flash PMIs were better than expected in Japan, Europe and the US (54.0 vs. (E) 53.0 in the USA). This is important because these PMIs refute the growing idea that the emerging market turmoil and global market volatility in August/September was pulling developed market economies back toward recession.

The event that effected the markets the most was a very dovish ECB meeting and rate announcement. ECB President Draghi basically told markets that the ECB would be doing more QE in December in reaction to declining economic growth and inflation. Much like the PBOC, the fact that the ECB is going to more QE isn’t a shock, but the fact that Draghi was so explicit about it was a surprise. That dovish ECB meeting was the major positive stock market catalyst last Thursday.

Finally, looking at some hard domestic economic data, September housing continues to come in “fine” with both Existing Home Sales and Housing Starts both beating expectations, and implying a still-healthy housing market while jobless claims continue to refute the soft August and September monthly data. Jobless claims beat estimates at 259k vs. (E ) 265k, and remain near 42-year lows, implying the jobs market remains strong.

Bottom line, last week was a good week from a macro standpoint as we were 1) Reminded that the biggest global central banks remain active and committed to propping up stock prices and being ultra-accommodative, and 2) That actual economic data (especially in China) is stable, and so far the fear that China would drag down the developed economies is not coming true.

This Week

The FOMC decision this Wednesday is obviously the highlight of this week. There is virtually zero chance the FOMC hikes this week (for multiple reasons). We will do our typical FOMC Preview in tomorrow’s Report, but the focus of this meeting will be on how much the FOMC acknowledges the improvement in Chinese economic data and the stabilization in US stocks (if both those developments are highlighted that will be “hawkish,” and increase chances of a December rate hike).

Away from the Fed there are several important domestic economic releases to watch. From an inflation standpoint, Friday we get the September Personal Income and Outlays Report (which includes the Fed’s preferred measure of inflation, the core PCE Price Index) and the quarterly Employment Cost Index, which is a closely followed measure of wage inflation (wage inflation is typically a precursor to broad inflation). Remember, core CPI was a touch more “firm” than expectations two weeks ago, so these inflation numbers will be watched closely.

After the inflation data most of the focus is on growth, with the highlight being the first look at Q3 GDP out Thursday. Durable Goods (tomorrow) will also be closely watched to see if business investment remains resilient.

 

TEST – TEST

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Sevens Report

Sevens Report 1.26.14

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Sevens Report 1.26.15SWG

Closing Bell Exchange: Oil, Jobs & Wages

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Tom Essaye’s recent interview on “Closing Bell” at CNBC.

5 Macro Risks Keeping Stocks Down

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Markets by their very nature are risky, but sometimes the macro risks are bigger and more dangerous than the bulls can handle. As we kickoff 2015, I see five big macro headwinds facing stocks—headwinds that are likely to limit upside at least in the near term.

In order of near-term importance, they are: 1) What will ECB QE look like? 2) Can oil stabilize? 3) Will we have another “Grexit” scare? 4) Is there really a global deflation threat or is it just oil? and 5) When will the Fed start to tighten and how will markets react?

Of the five, the first four are almost equal in importance with regards to what stocks do over the coming weeks. And, it’s important to note that European QE concerns now have trumped (or equaled) oil contagion worries as the near-term leading indicator for stocks. This was made evident Friday when articles in Bloomberg and Reuters were largely responsible for the drop in stocks (it wasn’t the jobs report).

Keep an eye on the WisdomTree Europe Hedged Equity ETF (HEDJ), a proxy for European stocks, as this fund’s direction will betray how the market assesses those concerns.

It’s key to realize, though, that beyond the very short term, none of the above should be materially negative influences on stocks.

The ECB may disappoint with initial QE, but the bottom line is the ECB knows it has to expand its balance sheet and provide more stimulus, which is bullish for European stocks over the coming months and quarters.

While we haven’t likely seen the low tick yet, oil appears to be trying to stabilize, as prices at these low levels will likely start to have an impact on marginal producers (so the pace of declines should slow), which is what is important from an “oil contagion” standpoint. The global “deflation” scare is mostly linked to oil prices so when they stabilize, so will inflation statistics. Third, the “Grexit” story is likely overdone (the chances of Greece leaving the EU remain very slim, and we know that from the bond markets).

Finally, the concern about the FOMC raising interest rates is a problem for the April time frame (as we approach the potential June “lift off” in the cost of capital).

The point here is that we are likely to see more near-term volatility until the events above get resolved, but I would view any material dip below 2000 in the S&P 500 as a buying opportunity in domestic cyclicals (banks, retailers and tech specifically) and continue to view European market weakness as offering fantastic longer term entry points.

Bottom line: The near term may be bumpy, but we see no reason to materially alter equity allocations.

Tom Essaye Featured in Forbes.com – Stocks Struggling To Break Free Of Oil’s Slide

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By Steve Schaefer at Forbes.com

It’s oil’s market, stocks are just living in it.

That’s the most common takeaway from the first few trading days of 2015, as the months-long punishing of oil prices and energy stocks keeps broader market averages mired in negative territory.

If oil, junk bonds and the ruble are rolling over, expect equities to fall in concert, according to Tom Essaye, author of the Sevens Report. When that trio is pushing toward fresh lows, “the stock market will go down in sympathy.”

Tuesday the trend continued, with a short-lived morning rally in stocks evarporating as oil prices slumped further below the $50 mark. West Texas crude dropped more than 4% to below $48 a barrel, while Brent slumped 4.5% to $50.71. The S&P 500 fell 1%, with energy its worst-performing sector by a wide margin.

FactSet senior earnings analyst John Butters points out that analysts still seem optimistic on the sector — energy is tied with healthcare for the highest percentage of buy ratings in any sector (57%) and companies like SchlumbergerSLB -0.04%, Kinder Morgan KMI -0.6%, Phillips 66 PSX -1.25%, EOG Resources EOG +1.16%and Williams Companies boast buy rankings from more than 80% of Street analysts who cover them — even though earnings are expected to fall more than 19% in 2015.

Citigroup’s Tobias Levkovich points to the chart below, which shows that while 2015 earnings expectations have plunged in the energy sector, 2016 have been little changed.

energy chart

Perhaps that’s because analysts think the selloff is overdone and has created some undervalued opportunities. More likely it’s because the damage in the energy sector has come so rapidly the analysts haven’t even had a chance yet to turn their attention to future years.

At some level, bargain-seekers will think oil and energy stocks are worth buying, but Essaye warns that the true oil shakeout some are waiting for may be a bit further off than they think.

A global supply glut barreling up against weakening economic growth is a well-understood factor in oil’s slide, but another element Essaye points to is the potential breathing room oil companies have thanks to hedging strategies.

Companies that hedged their 2015 production at prices around $90 or more per barrel can likely stay afloat longer than outsiders like OPEC anticipated, given that those hedges are now “in the money in a big way,” according to Essaye. Net short positions held by producers have leaped from 15 million contracts in August to 77 million last week.

“Bottom line, shale producers are not yet feeling the “full on” pain from the roughly 50% selloff thanks to their hedging strategies,” Essaye says. “Sso we can expect production to remain high and fundamentals to remain very bearish.” He expects oil to head toward $45 a barrel in the near term.

In a recent letter to clients, Forest Value Fund’s Thomas Forester notes that the sliding prices in oil have been considerably worse than the broader declines in other industrial commodities, which might be explained away in part by the end of the Federal Reserve’s monthly asset purchases – which provided cheap money that sloshed into emerging economies like China’s – and the strengthening dollar.

 

http://www.forbes.com/sites/steveschaefer/2015/01/06/stocks-struggling-to-break-free-of-oils-slide/

Get Today’s Sevens Report Now! Free Market Research for Two Weeks!

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To get access to today’s edition of The Sevens Report, simply sign up for a Free Trial on the Right hand side of this page!

 

Don’t Get Fired By Your Clients: How to Become a Better Financial Advisor

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“Tom, I just fired my Financial Advisor!”

That’s what a subscriber to The 7:00’s Report recently told me. When I asked her why she felt the need to get rid of her advisor, she told me it was because he couldn’t intelligently discuss any of the things she’d been reading about each day, a read that took her just 7 minutes every morning.

This same subscriber also told me that her advisor rarely offered her any original trading ideas, and that when she asked him about something she read in The 7:00’s Report, he basically blew her off.

Now, if you’ve ever had a question from a client that stumps you, or if you just don’t want to be outfoxed by a client who’s actually up on what’s going on in the economy and the markets, then The 7:00’s Report is the solution.

To start a Free Two Week Trial of The 7:00’s Report simply sign up on the right hand side of this page.

I’m Tom Essaye, and I created The 7:00’s Report for one simple reason–to give Financial Advisors like you the analysis and insight you need to help you understand what’s really important, and to arm you with the latest intelligence you can use to keep your clients happy.

The 7:00’s Report brings you all of the critical information you need to know about the markets, by 7 AM each morning, and in only 7 minutes or less.

To see for yourself, Sign up for a Free Trial Today! Just enter your email address on the right.

As a Financial Advisor, you simply can’t afford NOT to be up on the latest goings on in the market. But as we all know, it’s often a monumental time challenge getting through all of the research materials, websites, newspapers, blogs, etc., that have the insight on the markets vital to you.

The 7:00’s Report solves this time challenge by providing you the insight and analysis that you can use to give you a leg up on the competition–and the best part is it takes less time to read each day than a stop for coffee at the local Starbucks.

Just look at what some of your peers are saying about The 7:00’s Report:

“Tom’s ability to summarize market action in minutes is invaluable in today’s environment of data overload. We spend over $100,000 a year on research, and The 7:00’s Report is the one piece of research I can’t do without.“ –John S., Vice President of a multi-billion dollar asset management firm

“Your report saves me 45 minutes every morning, and I know more after I’ve read it then I did before, when I was spending an hour getting caught up in the morning.” –David R., a top-producing Financial Advisor at Bulge Bracket Investment Bank

“The only problem with the report is that now it’s the only thing I read in the morning.“ –Jeremy H., a Senior Investment Consultant at a Regional Wealth Management Firm

“As a hedge fund manager, my mornings are packed trying to catch up on important news. The 7:00’s Report is a perfect tool that gives me synopsis and analysis of all important events.“ –Monty A, Portfolio Manager of a Managed Futures Fund

If your goals include being better informed, speaking with more authority to clients, and, of course, having the knowledge necessary to make more money, then The 7:00’s Report is for you.

To experience your own success with The 7:00’s Report simply enter your name and email on the right hand side of the page and your FREE TWO WEEK TRIAL will begin TODAY.

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I believe that this Report can help you and your business the same way it’s helping hundreds of your competitors and colleagues.

More knowledge, more time, more profitable investment ideas, all in less than 7 minutes each morning.

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Best,

Tom Essaye
Editor
The 7:00’s Report

About Tom

Tom Essaye is not your average newsletter writer. After cutting his teeth on the trading floor of the NYSE in 2002 with Merrill Lynch’s Institutional Equity trading division, Tom moved on to manage a natural resource and commodity focused hedge fund. He later joined a leading financial publisher as the head of its trading strategies. In January 2012, Tom created a new company with the express purpose of providing institutional quality market analysis direct to financial advisers and retail investors. Shortly thereafter, The 7:00’s Report was born.

Tom is a frequent guest on national television, and appears regularly on CNBC, CNBC Europe, CNBC Asia, Bloomberg TV, BNN and Marketwatch.com. He’s also been a guest commentator on national radio shows, and is frequently quoted in various national print publications.


A cum laude graduate of Vanderbilt University, Tom holds a bachelor’s degree in business To management, with minors in finance and philosophy. He also holds an MBA from the Hough Graduate School of Business at the University of Florida