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Reset the trade relationship back to where it was

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Reset the trade relationship back to where it was: Tom Essaye Quoted in Barron’s

Netflix and 6 More Winning Stocks to Sell Now

The White House now says that trade negotiations with China are over, even though the latest agreement from London “did little other than to reset the trade relationship back to where it was following the Geneva talks and, importantly, didn’t result in any further tariff reduction,” notes Sevens Report President Tom Essaye.

That means consumers will face at least 30% tariffs on Chinese imports and additional 25% on select goods and “according to the administration, they are going to stay there in perpetuity,” he notes. “Yes, ultimately Chinese tariffs were lower compared to the 145% absurdity in early April. But, they are much, much higher than at the start of the year.”

Also, click here to view the full article featured on Barron’s published on June 13th, 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.

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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.

What is the Shadow Fed?

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What’s in Today’s Report:

  • What is the Shadow Fed?

Futures are modestly lower as geopolitical concerns offset more strong tech earnings.

Geo-politically, multiple news outlets reported that Israel is preparing for a strike on Iranian nuclear facilities, which is boosting gold prices and weighing on global markets.

Oracle (ORCL) beat earnings on continued robust demand for AI infrastructure (the stock is up 7% pre-market).

Today focus will be on economic data via Jobless Claims (E: 243K) and PPI (E: 0.2% m/m, 2.6% y/y).  Claims have ticked higher in the last few weeks and if that continues, it will slightly increase economic anxiety and (slightly) pressure stocks.  On inflation, PPI is viewed as a loose leading indicator of CPI so if PPI can remain subdued, it’ll boost confidence inflation remains under control.

Finally, notable tech earnings continue today with ADBE ($4.01).

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 MMT Chart

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What’s in Today’s Report:

  • June MMT Chart

Stock futures are modestly lower this morning as the “framework agreement” from the U.S.-China trade talks is digested ahead of today’s critical U.S. CPI report.

Economically, Japanese CPI favorably fell from 4.1% in April to just 3.2% in May, below estimates of 3.5%.

Today, focus will be on the latest U.S. inflation data with CPI (E: 0.2% m/m, 2.5% y/y) and Core CPI (E: 0.3% m/m, 2.9% y/y) figures due to be released before the open.

There are no other economic reports today and no Fed officials are scheduled to speak which leaves a 4-Month Treasury Bill auction at 11:30 a.m. ET and a 10-Yr Treasury Note auction at 1:00 p.m. ET as the only other notable market catalysts on the calendar today.

Finally, two late season earnings releases that could move markets after the close include: CHWY ($0.16), ORCL ($1.30).

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.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • ADP Employment and ISM Services PMI Takeaways
  • Oil Update – Prices Resilient Despite Three Bearish Catalysts

Futures are little changed as global traders digest yesterday’s soft U.S. economic data after a mostly quiet night of news.

Economically, China’s Services PMI rose from 50.7 to 51.1, meeting estimates while Eurozone PPI favorably cooled to 0.7% from 1.9%.

Looking into today’s session, there are several economic reports to watch including International Trade in Goods (E: $-118.1B), Jobless Claims (E: 235K), and Productivity & Costs (E: -0.8%, 5.7%). However, with the May Jobs Report looming large tomorrow, it will take a significant surprise in one of these reports to materially move markets.

There are also multiple Fed speakers again today including Kugler (12:00 p.m. ET), Harker (1:30 p.m. ET), and Schmid (1:30 p.m. ET). Any dovish commentary regarding yesterday’s soft economic data is likely to be well received, supporting both stocks and bonds.

Finally, there are a handful of late-season earnings releases this afternoon: AVGO ($1.35), LULU ($2.59), DOCU ($0.25), BF.B ($0.36), and WOOF ($-0.05). AVGO is particularly in focus as an increasingly important semiconductor manufacturer and its quarterly results could move the broader tech space on a material beat/miss.

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.

Hard Landing/Soft Landing Scoreboard: May Update

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard: Hard Data Still (Mostly) Hanging in There
  • ISM Manufacturing Index Takeaways

Futures sold off overnight as a notably weak Chinese factory report offset a favorably cooler-than-anticipated EU CPI print.

China’s May Manufacturing PMI fell to 48.3 vs. (E) 50.7 while EU Core CPI encouragingly fell from 2.7% to 2.3% vs. (E) 2.5% last month.

Looking ahead to today’s session, there are a few noteworthy economic reports including Motor Vehicle Sales (E: 16.4M), Factory Orders (E: -3.0%),  and JOLTS (E: 7.1 million). The market could be particularly sensitive to a soft Job Openings print as a drop below 7 million could stoke worries about the health of the labor market ahead of Friday’s May jobs report.

Additionally, there are a handful of Fed speakers but unless any of them deviate from the “wait-and-see” narrative of late, their market impact should be limited. Speakers today include Goolsbee (12:45 p.m. ET), Cook (1:00 p.m. ET), and Logan (3:30 p.m. ET).

Finally, some late season earnings continue to trickle in with DG ($1.47), NIO ($-0.22), CRWD ($-0.28), and HPE ($0.28) all reporting Q1 results today.

With the ISM Services (tomorrow) and BLS jobs report (Friday) still looming large, today should be a relatively quiet day for markets as traders digest the big May rally however risks of profit taking exist if a negative headline crosses the wires.

Volatility Update

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What’s in Today’s Report:

  • Volatility Update

Futures are slightly lower following a mostly quiet night of news ahead of the holiday weekend.

Politically, the Supreme Court issued a ruling overnight that implies the President does not have the authority to fire the Fed Chair and this is a general positive for markets (it mostly removes Trump firing Powell as a threat).

Economically, data was better than expected as UK retail sales and German GDP both beat estimates.

Today focus will be on New Home Sales (E: 700K) and there is one Fed speaker, Cook (12:00 p.m. ET).  But, given the looming holiday weekend, expect trading to be quiet barring any surprises.