Posts

Sevens Report Warns Weak Market Breadth Threatens S&P 500 Rally

/in , /by

Tom Essaye cautions that rising concentration and falling participation raise risks of another sharp pullback.

Pay attention to these ’concerning’ market developments

U.S. equities fell Thursday as investors shifted focus from the Trump-Xi summit to surging bond yields and lackluster mega-cap tech earnings. The S&P 500 dropped nearly 1%, closing at weekly lows. While still up 16.25% year-to-date, Tom Essaye of Sevens Report Research said the rally is “deceiving,” with market breadth weakening beneath the surface.

Essaye noted that the top 10 companies now make up 40.5% of the S&P 500’s value — surpassing the tech bubble peak — with Nvidia alone at 8% after surpassing a $5 trillion market cap. Only 28.6% of S&P components are outperforming the index, and just 53% remain above their 200-day moving average. The NYSE Advance-Decline Line has also hit a 12-week low.

He warned that without a rebound in market breadth, risks of another “air pocket-style” drop or April-like correction are rising. “A broad-based rebound is needed to confirm that the bull market remains alive and well,” Essaye wrote.

Also, click here to view the full article published in Investing.com on November 1st, 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.

Tom Essaye: Markets Expect ‘Cooler Heads’ to Prevail in U.S.-China Trade Tensions

/in , /by

Sevens Report says tariff threats are unlikely to weigh heavily on stocks unless a full-scale trade war erupts.

Markets believe U.S., China will find trade compromise – Sevens Report Research

According to Sevens Report Research, investors remain largely unfazed by renewed U.S.-China trade tensions, with markets betting that both sides will ultimately compromise. Tom Essaye noted that while President Trump’s tariff threats and Beijing’s export limits on rare earths have raised concerns, optimism ahead of a planned meeting between Trump and Xi Jinping has kept sentiment stable. Essaye said “scary headlines” are unlikely to drive markets lower as long as traders believe a full-blown trade war can be avoided. For now, stock direction remains more influenced by economic growth and AI enthusiasm.

Also, click here to view the full article published in Investing.com on October 21st, 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.

Sevens Report: OpenAI’s $500B Valuation Rekindles AI Bubble Debate

/in , /by

Employee confidence strong, but lofty revenue multiples raise caution

Is OpenAI’s stock sale the latest evidence we’re in an AI bubble?

The Sevens Report said Friday that OpenAI’s latest secondary stock sale, which valued the company at around $500 billion, has reignited debate over whether surging enthusiasm for artificial intelligence reflects confidence or a brewing bubble.

The sale allowed employees to offload up to $10 billion in equity, though only $6.6 billion was ultimately offered — a sign that insiders remain confident in OpenAI’s growth trajectory. Sevens noted that the transaction was a liquidity event, not new fundraising, underscoring strong investor appetite after OpenAI’s first-half 2025 revenue already surpassed full-year 2024 totals.

Still, the valuation implies 25 times expected 2025 revenue of $20 billion, which the firm said demands rapid monetization to justify. “Leadership will have to prove the ability to translate growth into profitability sooner rather than later,” analysts cautioned.

Sevens also warned that fading intraday strength in AI-linked names like Nvidia shows rising risk that the AI narrative could be challenged, potentially triggering profit-taking across tech and the broader equity market.

Also, click here to view the full investing.com article featured on Yahoo Finance published on October 3rd, 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.

Sevens Report Flags ‘Bull Trap’ in Stocks Under Dow Theory

/in , /by

Transports’ weakness signals risk despite record highs

Charles Dow would describe this market as a ’bull trap’ says this analyst

The Sevens Report warned Friday that the U.S. stock rally fits the definition of a “bull trap” under Dow Theory. While the Dow Industrials have hit new highs, the Dow Transports remain negative year-to-date, flashing a bearish divergence.

The note cited two key principles: Confirmation and Trend Reversals. Both indexes must rise together to confirm expansion, but transports’ weakness suggests pressure in travel, logistics, and freight.

Sevens emphasized that despite four of five major equity benchmarks hitting records, Dow Theory would still label the advance a technical bull trap.

Also, click here to view the full investing.com article on Yahoo Finance published on September 19th, 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.

Sevens Report: U.S. Labor Market Stable, But Cracks Emerging

/in , /by

Thresholds in claims and unemployment could trigger sharp equity declines

What does a soft jobs market mean for markets?

Sevens Report said U.S. labor conditions remain broadly stable despite recent weak data, citing jobless claims below 250,000, continued positive payrolls, and JOLTS near 7 million.

The firm warned, however, that momentum is fading: hiring is slowing even as layoffs remain limited. Key thresholds include jobless claims above 260,000, a four-week average above 300,000, unemployment over 4.5%, and JOLTS falling under 6.5 million. Each would signal real deterioration.

On market impact, Sevens cautioned that a sharp labor downturn could drive a 15%–30% equity drop, with the S&P 500 potentially sliding 500–700 points initially. Defensive sectors such as staples, utilities, and healthcare would likely outperform, alongside lower-volatility ETFs and mega-cap tech if the AI trade holds.

“Bottom line, the labor market is not bad; however, it is losing momentum and this is something we need to watch carefully,” the report said.

Also, click here to view the full article published in Investing.com on September 8th, 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.

Sevens Report: Ethereum’s Rally vs. Bitcoin Raises Red Flags

/in , /by

ETH/BTC rallies have historically aligned with equity blowoff tops

Why the long-ETH/short-BTC trade matters

According to the latest Sevens Report, Ethereum has “meaningfully outperformed Bitcoin with the Long-ETH/Short-BTC trade accelerating rapidly as both cryptos surged towards record highs.” While many traditional investors might dismiss the shift, Sevens emphasized that “there is a key underlying takeaway sourced in cross-asset analysis.”

Historically, sharp ETH/BTC rallies have coincided with “squeezy yet powerful rallies in equity markets preceding near-term blowoff tops.” Examples include the 2017 ETH/BTC surge ahead of the 2018 equity drawdown, a 2020 spike before the pandemic selloff, and a 2021 rally that foreshadowed the “Double Bear Market” of 2022.

Sevens noted that the latest 130% ETH/BTC rally off April lows “has obviously coincided with the resilient tech-led rally in stocks off the 2025 lows.” Unlike 2023–2024, when ETH lagged while equities climbed, the current setup suggests stocks may be vulnerable if crypto momentum fades.

“Bottom line, in prior cases over the last 10 years, every time we have seen such a robust and pronounced rise in the ETH/BTC crypto-pair, stocks have been sprinting higher in lockstep. However, once the upside momentum faded from ETH/BTC rally, it would have been prudent for equity investors to put their guard up,” Sevens concluded.

Also, click here to view the full article on Yahoo Finance published on August 28th, 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.

Sevens Report: Tech Valuations Look Stretched Despite AI-Driven Leadership

/in , /by

Massive demand for semiconductors and AI infrastructure fuels gains, but valuations raise sustainability concerns.

Tech Valuations Stretch as AI Boom Meets Investor Caution

According to the latest Sevens Report, “massive demand for semiconductors and AI infrastructure combined with the promise of AI driven leaps in profitability” have made technology the undisputed leader of the S&P 500’s advance.

But valuations now appear difficult to justify. Sevens highlighted Palantir as “the most obvious example,” calling it “a stock that is the best performer in the S&P 500 YTD but also trades at a quasi-absurd 212X forward earnings!” Even broad-based exchange-traded funds such as XLK are trading at “above 29X earnings, a level that hasn’t proven historically sustainable.”

Recent declines in AI-related names, driven by disappointing reactions to earnings at CoreWeave, Applied Materials and Cisco, provided a small relief to valuations. But Sevens warned that “the ‘bar’ to impress investors in the AI names is high.”

With rate cuts expected next month, investors are also rotating into more cyclical sectors such as utilities, industrials and financials. Still, finding value in technology remains a challenge for new money. “The reality is that finding value in the tech space is a challenge, especially for new money that needs to be allocated but doesn’t want to chase sky-high valuations,” Sevens said.

The report suggested that investors can still participate in the AI-driven rally while managing risk by using alternative ETF strategies. These include equal-weight and smart beta approaches, as well as income-focused ETFs that “boost yield, and in doing so lower the aggregate valuation of the ETF.”

“Alternative tech strategies that can complement core tech holdings can lower overall tech valuations in a client portfolio, yet still provide exposure to the key names in the space,” concluded Sevens.

Also, click here to view the full article published in Investing.com on August 21st, 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.

What the Bad Jobs Report Means for Markets

/in , /by

Sevens Report sees no recession yet, but warns of rising anxiety

What the bad jobs report means for markets

“The jobs report was a major disappointment, but job adds are still positive, so it’s not signaling any sort of recession or slowdown,” Sevens wrote Monday.

Sevens Report noted that the report is often the “most inaccurate” of economic data, prone to distortions and revisions—especially during the summer. Broader indicators like jobless claims and the JOLTS survey remain stable, offering a more balanced picture of the labor market.

Tariff announcements on Friday were also shrugged off. Sevens said the moves were “largely in line with expectations” and that the market reaction reflected sentiment rather than surprise. “The S&P 500 gave zero room for disappointment,” the firm noted.

Looking ahead, Tuesday’s ISM Services PMI could be critical. A drop below 50 may fuel recession fears and push stocks lower, while a stable reading above 50 would help settle nerves.

With defensive sectors outperforming late last week, Sevens advised staying balanced: “If you’re very light defensives, you may want to be ready to boost them if data is soft.”

Also, click here to view the full article published in Investing.com on August 4th, 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.

AI Bubble Fears Grow as Chip Stocks Diverge From Broader Market

/in , /by

Sevens Report urges caution as SOX index lags S&P 500 gains

5 big analyst AI moves: Microsoft upgraded on Azure growth, chip stocks PTs raised

Sevens Report Research warned Friday that a growing disconnect between AI chip stocks and the broader equity market could be an early signal of an “AI bubble.”

“Every bubble in modern market history has been based on a narrative,” the firm wrote, calling AI technology the latest potentially bubble-inflating theme.

While Nvidia often draws attention as the face of the AI rally, Sevens cautioned that single-stock enthusiasm—especially driven by a “cult following”—can obscure broader market signals.

“It would be much more prudent to keep tabs on the broader-based semiconductor index, SOX,” the report said. Despite strong gains in the S&P 500 since July 2024, SOX has failed to post a new high, raising red flags.

“If AI remains the primary source of bullish optimism… this market is in trouble and at risk of rolling over sooner than later,” the report concluded, likening the broader market to Wile E. Coyote running off a cliff.

Also, click here to view the full article published in Investing.com on August 3rd, 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.

Sevens Report Co-Editor Says $750B EU Energy Deal Carries Financial Asterisk

/in , /by

Tyler Richey, Co-Editor, Sevens Report Research Quoted by MarketWatch.

The Energy Report: They Said It Couldn’t Be Done

“If there are plans to more rapidly expand Europe’s nuclear power capacity by utilizing U.S.-based companies, and the power-plant construction, operation, long-term fuel fulfillment contracts, and future reactor services (some of which can be decades long) are all included in that $750 [billion] ‘headline number,’ then there could be a case made that the pulled-forward dollar amount of future operations could boost the value of the deal,” said Tyler Richey, co-editor at Sevens Report Research.

However, that scenario would require some “financial engineering” to achieve the $750 billion, which would “leave the realistic dollar amount of the deal carrying an asterisk based on the three-year timeline mentioned,” Richey told MarketWatch.

Also, click here to view the full article published in Investing.com on July 29th, 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.