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A Four Way Assault on the Bullish Mantra

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A Four Way Assault on the Bullish Mantra: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop and What’s It Mean for Markets? (Four Reasons)
  • JOLTS Data Takeaways – “Solid Enough” for Now
  • Chart: The S&P 500 Violated It’s 2024 Uptrend Yesterday
  • Chart: The “Short-Vol Trade” Is Beginning to Unravel (More to Come)

Stock futures are lower again this morning as the hawkish money flows of early Q2 continue with the 10-Yr yield at YTD highs ahead of Powell’s speech on the economy today.

Economically, China’s Composite PMI met estimates at 52.7 while the EU’s “Narrow Core HICP” (their Core-CPI equivalent) favorably fell from 3.1% to 2.9% vs. (E) 3.0%.

Today, there are two important economic reports due out: The ADP Employment Report (E: 150K) before the open and then the ISM Services Index (E: 52.7). Good economic news has been bad for markets lately, so softening growth numbers and low/falling inflation metrics in today’s data are the best case scenario for stocks today.

Beyond the data this morning, there are several Fed officials scheduled to speak: Bowman (9:45 a.m. ET), Goolsbee (12:00 p.m. ET), Powell (12:10 p.m. ET), and Barr (1:10 p.m. ET).

Powell’s speech at Standford shortly after 12:00 p.m. (ET) will get the most attention as traders look for him to reiterate the key takeaways from the March FOMC meeting (likely summer rate cut, three cuts in 2024 expected). Any hints at “higher for longer” will add to the hawkish money flows that have been weighing on stocks so far in Q2.

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The key for the ISM manufacturing survey is stability

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The key for the ISM manufacturing survey is stability: Tom Essaye Quoted in Barron’s

Stock Futures Point to Record Highs as Investors Mull Cuts to Interest Rates

“The key for the ISM manufacturing survey is stability. An in-line or better than expected result will further reinforce that growth is resilient and likely support the early rally,” said Tom Essaye, founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on April 1st, 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.

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Tom Essaye interviewed by Barron’s

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 Durable-goods number showed stable growth: Tom Essaye Interviewed by Barron’s

Market’s Spirit Isn’t Dampened by Mixed Economic Data

In an interview with Barron’s, Tom Essaye of Sevens Report Research said the durable-goods number showed stable growth while the consumer confidence reading was light.

“Every time the market is reminded that we’ve got stable growth, still falling inflation, a looming rate cut —which was reinforced last week—and positive AI headlines, the default reaction is to rally. And rightly so. And that’s exactly what’s happening today,” he said.

Essaye also called the collapse of Baltimore’s Francis Scott Key Bridge a “tremendous tragedy”and thinks the disaster could trickle into economic reports at a time when the Federal Reserve is watching all numbers closely.

“This is going to cloud some of the economic data, potentially, which has some risk associated with it because the data is really important right now,” Essaye said. “It will probably send some noisiness into the data. We’re just going to have to look through that as best we can over the next couple of months. That’s something to pay attention to.”

Also, click here to view the full Barron’s article published on March 26th, 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.

Sevens Report Technical Analyst Tyler Richey Laid Out The Case For A Looming Pullback For Bitcoin

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A Looming Pullback For Bitcoin: Strengthen your market knowledge with a free trial of The Sevens Report.

Bitcoin Tops $70,000—But Is This Rebound Here To Stay?

Sevens Report technical analyst Tyler Richey laid out the case for a looming pullback for bitcoin as its relative strength index, a tool commonly used by technical strategists to measure the sustainability of a sharp rally or selloff, sits at its lowest level since early February, indicating a potentially “frothy and overextended” market for bitcoin.

Such technical analysis can be “hit-or-miss” for crypto assets, Richey added, considering crypto prices can behave far more erratically than those of other asset classes like stocks and physical commodities, but declining technical backing coupled with elevated prices “should not be sustainable forever,” suggesting $52,000 as a potential first true spot of resistance for bitcoin based on historical data, a backstop nearly 30% below bitcoin’s Monday price.

Also, click here to view the full Forbes article published on March 25th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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.

Data from the EIA was largely bullish

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Data from the EIA was largely bullish: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Oil futures edge lower early Thursday

“Yesterday’s weekly inventory data from the EIA was largely bullish but the futures market had become overbought and there was a knee-jerk selloff in the immediate wake of the release as short-term traders booked profits on the latest breakout to new 2024 highs,” analysts at Sevens Report Research wrote in a note.

Also, click here to view the full MarketWatch article published on March 21st, 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.

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The Rally Is Broadening

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The Rally Is Broadening: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Rally Is Broadening
  • SPY vs. RSP Comparison – Bar Chart

Equity futures are higher this morning as traders position into a fairly busy morning of U.S. economic data while Chinese authorities intervened in the currency market to support the yuan which is helping general investor sentiment.

Economically, the German GfK Consumer Climate index was slightly better than feared at -27.4 vs. (E) -27.9 but the release is not materially impacting markets this morning.

Today, focus will be on economic data early with several key reports due to be released including: Durable Goods Orders (E: 1.3%), Case-Shiller Home Price Index (E: 0.2%), and Consumer Confidence (E: 106.7).

There are no Fed officials scheduled to speak today but there is a 5-Yr Treasury Note auction at 1:00 p.m. ET. With the elevated level of market anxiety surrounding Friday’s Core PCE release (when markets will be closed) any surprises via strong or weak demand in the auction could move yields and impact equities.

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Updated Risk/Reward Outlook

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Updated Risk/Reward Outlook: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Updated Risk/Reward Outlook

Futures are modestly lower following a quiet weekend of news as investors digest last week’s Fed decision, AI news and economic data.

Atlanta Fed President Bostic stated over the weekend he only expected one rate cut in 2024, pushing back slightly on the 2024 dot (which showed three cuts).

Oil rose above $81/bbl on rising geo-political tensions as Russia attacked Ukrainian energy infrastructure.

Today there are two notable economic reports, Chicago Fed (E: -0.50) and New Home Sales (E: 675k) but they’d have to be big surprises (positively or negatively) to move markets.  There are also two Fed speakers, Bostic (8:25 a.m.) and Cook (10:30 a.m.) and if they both push back on the idea of three cuts in 2024 that would slightly weigh on stocks.

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Growth is holding up, and that’s the key

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Growth is holding up, and that’s the key: Tom Essaye Quoted in Barron’s

S&P 500 Marks Record Close. Tech Stocks Rebound.

Sevens Report Research’s Tom Essaye told Barron’s that markets can rally higher on developments in the artificial intelligence world and signs of continued economic growth, even in the face of diminished hopes for imminent rate cuts.

“Growth is holding up, and that’s the key,” Essaye says. “It’s when growth begins to roll over that rate cuts really matter. And we’re not there yet. We’re getting hints of it. But we’re not there yet.”

Also, click here to view the full Barron’s article published on March 19th, 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.

What Is the Bitcoin “Halving?”

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What Is the Bitcoin “Halving?”: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Is the Bitcoin “Halving?”
  • Manheim Used Vehicle Index Continues to Decline – Chart

Stock futures are little changed this morning as yields drift sideways and the dollar firms ahead of the Fed decision.

European markets were led lower by luxury brand names after soft earnings from Gucci’s parent company (Kering SA) offset favorable inflation data out of the UK.

Economically, the PBOC left the Loan Prime Rate at 3.45% which is seen as accommodative while U.K. CPI favorably fell from 5.1% to 4.5% vs. (E) 4.6% in February.

There are no notable economic reports today which will leave investor focus pretty much exclusively on the Fed with the FOMC Meeting Announcement at 2:00 p.m. ET followed by Fed Chair Powell’s press conference at 2:30 p.m. ET.

If the Fed is hawkish and signals a higher-for-longer policy stance (more so than is already priced in), expect some volatility in the wake of the decision while a dovish decision projecting confidence in a soft landing could see the 2024 rally extend to new highs.

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The major question for tomorrow’s meeting is what do the dots say?

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The major question for tomorrow’s meeting: two or three rate hikes? Tom Essaye Quoted in Barron’s

Dow Turns Higher. Tech Stocks Pull Back.

“I think what we’re seeing today is just a little bit of hedging by investors,” Sevens Report Research’s Essaye told Barron’s in a phone interview.

Essaye says that ahead of the Fed meeting, traders may be looking at defensive stocks on the chance that the Federal Open Market Committee’s March meeting sends stocks lower or pushes yields lower.

“The major question for tomorrow’s meeting is what do the dots say: two or three rate hikes?” Essaye says. “That’s really gonna determine how the market reacts to this meeting.”

“AI enthusiasm has been a major factor in this rally, and as long as nothing else is particularly negative, AI enthusiasm can continue to push markets higher,” Essaye says. “That’s what happened yesterday. Today, we don’t have that sort of new shiny object in AI to focus on, and we have the Fed decision tomorrow.”

Also, click here to view the full Barron’s article published on March 19th, 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.