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What Yesterday’s “Inside Day” Means for Markets

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What Yesterday’s “Inside Day” Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Yesterday’s Inside Day Means for Markets
  • Takeaways From Oil’s Reaction to Israel’s Retaliatory Air Strikes

Futures are flat this morning while global markets rallied modestly overnight amid quiet news flow as traders look ahead to multiple important catalysts looming over the next week.

Economically, data was largely encouraging overnight as the Japanese Unemployment Rate fell to 2.4% vs. (E) 2.5% while the German GfK Consumer Climate Index rose to -18.3 vs. (E) -20.5, however, neither report meaningfully impacted markets.

Looking ahead to the U.S. session, there are several noteworthy economic releases today beginning with a housing market report, the Case-Shiller Home Price Index (E: 5.2%), before we the first labor market report of this critical jobs week, JOLTS (E: 7.9 million), and finally Consumer Confidence (E: 99.1).

There are no Fed officials scheduled to speak today but there is a 7-Yr Treasury Note auction at 1:00 p.m. ET. The 7-yr auction is notable because soft demand in past auction have roiled bond markets and sparked volatility in equities, something to watch for today.

In corporate news, this critical week of earnings begins in earnest today with consumer-focused companies including PYPL ($1.08), MCD ($3.18), and BP ($0.78) reporting before the bell while tech giants AMD ($0.92) and GOOG ($1.83) report after the close along with credit card staple V ($2.58).

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What the Iranian Missile Strike Means for Markets

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Economic Implications of the Port Strikes: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Iranian Missile Strike Means for Markets
  • ISM Manufacturing Mildly Disappoints
  • JOLTS Top Estimates

Stock futures are lower amid a continued risk-off tone in markets as investors digest negative earnings news and await Israel’s response to Iran’s missile attack on Tuesday.

In corporate news, NKE earnings disappointed as sales fell 10% y/y and guidance was withdrawn ahead of a CEO change, leaving shares down 5% pre-market.

Economically, the Eurozone Unemployment Rate held steady at 6.4% in August, meeting estimates which is having little impact on markets today.

Today, investor focus will be on the ADP Employment Report (E: 121.5K) before the bell as well as a handful of Fed speakers on the schedule through the lunch hour: Hammack (9:00 a.m. ET), Musalem (10:05 a.m. ET), Bowman (11:00 a.m. ET), and Barkin (12:15 p.m. ET).

In addition to the jobs data and Fed chatter, tensions in the Middle East will remain a major focus as further deterioration in the Israel-Iran conflict is likely to weigh further on risk assets and influence flight-to-safety money flows.

Sevens Report Quarterly Letter Delivered

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Optimism regarding a ceasefire between Israel and Hamas had been building

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Optimism regarding a ceasefire between Israel and Hamas had been building: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Oil pares gains as Hamas reportedly accepts cease-fire plan, Israel warns of Rafah invasion

“Optimism regarding a ceasefire between Israel and Hamas had been building over the last week or so, and that was reflected in last week’s steep drop in oil futures price,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

The reason the oil market didn’t see more of a selloff Monday in the wake of the news that Hamas has accepted the cease-fire proposal is that “it was largely already priced in,” said Richey.

Also, “despite the progress in negotiations, military action is continuing on with reports of 50 Israeli air strikes in Rafah today alone -and that is keeping speculative shorts on their toes as we start the new week,” he said.

Also, click here to view the full MarketWatch article published on Morningstar on May 6th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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What Has Really Changed In This Market?

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What Has Really Changed In This Market? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Thoughts on the Israeli Strike in Iran
  • What Has Really Changed In This Market?
  • Oil Market:  Technicals vs. Fundamentals

Futures are moderately lower as Israel conducted a limited strike in Iran while NFLX guidance disappointed.

Israel struck an Iranian military base in response to the weekends’ drone attack, but the operation was small and viewed as an effort to de-escalate the situation.

NFLX posted strong earnings but mixed guidance and the stock is down 6% pre-market.

Today there are no economic reports and only one Fed speaker, Goolsbee at 10:30 a.m. ET, and on the dovish side of the spectrum so barring a hawkish tone from him, he shouldn’t move markets.

On the earnings front, results early in the season have been a bit disappointing and focus on earnings will increase (especially next week).  This market needs better results to help stabilize.  Earnings we’re watching today include:  AXP ($2.97), PG ($1.42) and SLB ($0.74).

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Tensions remain elevated between Israel and Hamas

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Tensions remain elevated between Israel and Hamas: Sevens Report Analysts, Quoted in MarketWatch

Oil prices finish higher on talk of potential for Iran strike on Israel

“Bottom line, tensions remain elevated between Israel and Hamas and while ceasefire talks are as close as they have been yet, there remain risks of further escalation and a contagion effect in the region, particularly with Iran who recently threatened to close the Strait of Hormuz, which sees about 1/5th of the world’s seaborne oil trade flow through it,” said analysts in Sevens Report Research’s Wednesday newsletter.

Also, click here to view the full MarketWatch article published on April 10th, 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 surging Vix briefly pushed the value of front-month Vix futures contracts

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The surging Vix briefly pushed the value of front-month Vix futures contracts: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Iran-Israel fears sink stocks as traders rush to gold, Treasury bonds

The surging Vix briefly pushed the value of front-month Vix futures contracts expiring later this month above that of contracts expiring in May, causing the Vix futures curve to become inverted for the first time since February, according to Tyler Richey, co-editor of Sevens Report Research.

An inverted Vix futures curve is a sign that traders are bracing for stocks to continue sliding in the weeks ahead, Richey said.

Also, click here to view the full MarketWatch article published on April 12th, 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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How Bad Was Last Week for the Rally?

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How Bad Was Last Week for the Rally? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Initial Thoughts on the Iranian Strikes on Israel
  • How Bad Was Last Week for the Rally
  • Weekly Economic Cheat Sheet – Growth Metrics in Focus

Stock futures are rebounding modestly from Friday’s steep selloff as geopolitical developments from the weekend were not as bad as feared leaving focus on the start to Q1 earnings season and key economic data this week.

Geopolitically, Iran attacked Israel with a series of well-telegraphed drone and missile strikes over the weekend, but most were intercepted. There were limited casualties and little damage so the situation is seen as “contained” for now, however, a retaliatory strike by Israel would be a negative development for risk assets.

Looking into today’s session, there are two important investment bank earnings reports due out ahead of the bell: GS ($8.54) and SCHW ($0.73). following Friday’s disappointing results from other major banks including JPM, investors will want to see good numbers.

Economically, we get several important data points today including the Empire State Manufacturing Index (E: -5.1), Retail Sales (E: 0.4%), and the Housing Market Index (E: 51). Data needs to come in Goldilocks, especially, Retail Sales as the last two reports missed estimates and have raised concerns about the health of the consumer. Otherwise selling pressure is likely to pick up again today.

Finally, there are two Fed officials speaking today: Williams (8:30 a.m. ET) and Daly (8:00 p.m. ET). Any less hawkish tone will be welcomed while “higher for longer” commentary will be negative for stocks and bonds (yields higher).

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The Israeli Operation in Gaza May Help Ease Geopolitical Tensions

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Ease Geopolitical Tensions: Tom Essaye Quoted in Investing.com

From Israel’s Gaza Incursion to Apple’s Launch: Weekly Market Wrap

Economic Conditions and Expert Opinions:

Notably, Tom Essaye from The Sevens Report newsletter noted that the Israeli operation in Gaza might be helping ease geopolitical tensions. 

Despite the positive reaction to the Middle East situation, global equities are still on a trajectory towards their third consecutive monthly decline, attributed to increasing bond yields, a few unexpected tech earnings outcomes, and geopolitical worries.

This week also anticipates numerous key economic events, including interest rate decisions from various central banks, consumer confidence indices, and earnings reports from major corporations like Apple.

Also, click here to view the full Investing.com article published on October 30th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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.

Oil Futures Briefly Plunged To New Session Lows

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Oil Futures Briefly Plunged To New Session Lows: Tyler Richey Quoted in Morningstar

Oil prices mark first gain in 4 sessions as risks of market disruptions in the Middle East remain

Tyler Richey, co-editor at Sevens Report Research, pointed out that during Wednesday’s session, oil futures briefly plunged to new session lows after a preliminary news headline crossed the wires about Israel agreeing to delay a ground invasion of Gaza, but reports then said the provided reason for the delay was that the Israeli military was awaiting the arrival of U.S. missile support.

All of that “suggests an invasion is still imminent — just not right at this moment,” Richey said.

An implied measure of consumer gasoline demand, known as total motor gasoline supplied, was “largely steady with its smoother four-week moving average rising to a more-than-one-month-high,” said Sevens Report’s Richey. “That firming demand metric amid an unexpected drop in refinery runs last week is likely to result in some near-term pressure on supply, which is bullish for energy prices.”

Also, click here to view the full Morningstar article published on October 25th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Futures

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The Israel-Hamas Conflict in the Middle East

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The Israel-Hamas conflict in the Middle East: Tyler Richey Quoted in MorningStar

Oil prices inch higher after losing much of their war premium during a 3-session decline

“The Israel-Hamas conflict in the Middle East remains top of mind and the threat to the regions oil resources and infrastructure continue to warrant a fear bid in the oil market,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

However, “the lack of material escalation since the initial attacks by Hamas has seen some of that fear bid unwind as the conflict has been largely contained up to this point,” he said.

All of that “suggests an invasion is still imminent — just not right at this moment,” said Richey.

Also, click here to view the full MorningStar article published on October 25th, 2023. 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 Rally

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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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.