Posts

Futures are plunging globally on snowballing concerns about economic growth

/in , /by

Futures are plunging globally on snowballing concerns about economic growth: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

U.S. Stock Futures Plunging in Perfect Storm for Market Selloff

“Futures are plunging globally on snowballing concerns about economic growth following Friday’s soft jobs report,” said Tom Essaye, founder of Sevens Report research. “Global growth concerns are the main reason behind the stock weakness but technical factors are majorly at play.”

Also, click here to view the full Barron’s article published on August 5th, 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.

Why Stocks Dropped (What We’ve Been Worrying About)

/in , /by

Why Stocks Dropped (What We’ve Been Worrying About): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Stocks Dropped (What We’ve Been Worrying About)
  • Jobs Day (Updated Preview)

Futures are sharply lower and are extending Thursday’s losses following more disappointing tech earnings and as worries about economic growth grow.

Tech earnings disappointed last night as AMZN (down 8%), MCHP (down 5%) and INTC (down 20%, not a typo) all posted disappointing earnings or guidance.

Geo-politically, concerns are rising about a direct Israel/Iran conflict and that’s boosting oil and gold prices.

Today focus will be on the jobs report and expectations are as follows: 180K Job Adds, 4.1% Unemployment Rate and 3.7% y/y Wage Growth.  Given Thursday’s poor economic data and the pop in growth concerns, a slightly better than expected number would be the best-case scenario for stocks and help support the “rest” of the market (tech will be under pressure today regardless because of earnings).  A number substantially below expectations (or a rise in the unemployment rate to 4.2% or higher) will increase growth concerns and further weigh on stocks.

Join thousands 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.

We’re staring at big catalysts

/in , /by

We’re staring at big catalysts: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Tech Stocks Are Sliding Ahead of Key Earnings Reports

“There was not much going on yesterday and there isn’t a ton going on today, either,” Sevens Report Research’s Tom Essaye told Barron’s. “And we’ve had sort of big moves in the market, and we’re staring at big catalysts.”

Reports from Alphabet and Tesla may have lowered the bar for Big Tech, Essaye says. On the flip side, the megacap tech stocks have run up tremendously on high expectations for growth ahead driven by artificial intelligence. That changed in July, when tech stocks started to struggle to keep up as investors rotated from the sector to underperforming small-cap names.

“Investors are kind of more in a ‘show me’ mode now than they have been in a long time with these names,” Essaye says. “They want to see better earnings before they jump back in for fear that this rotation isn’t over.”

Also, click here to view the full Barron’s article published on July 30th, 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.

I don’t think the market is really doubting the whole AI story

/in , /by

I don’t think the market is really doubting the whole AI story: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Nvidia and Other Chip Stocks Are Leading the Market Lower Ahead of Big Tech Earnings

“I don’t think the market is really doubting the whole AI story at this point,” Sevens Report Research’s Tom Essaye told Barron’s. “But I do think there are extremely high growth expectations. And if those growth expectations disappoint, even a little bit, then you’ll see some punishment. And that’s really what’s been going on in the earnings season.”

Also, click here to view the full Barron’s article published on July 30th, 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.

Technical Levels to Watch Today and Jobs Report Preview

/in , /by

Technical Levels to Watch Today and Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Technical Levels to Watch in the Wake of the Fed
  • Jobs Report Preview

Futures are solidly higher in pre-market trade with tech and AI-focused names leading after solid AMD earnings (stock up 9%) offset mildly disappointing results from MSFT (stock down 3%) while economic data was solid overnight and investors digest the BOJ’s decision to raise rates to the highest level since 2008.

Today, focus will be on economic data early with the ADP Employment Report (E: 154K), Employment Cost Index (E: 1.0%), and Pending Home Sales (E: 1.1%) all due to be released. Healthy employment and steady wage growth numbers will be critical to see for the soft landing narrative to persist.

From there, focus will turn to 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.

Earnings season also continues today with BA (-$1.68) and MA ($3.51) reporting before the open and META ($4.69), QCOM ($2.25), ALL ($0.33), and EBAY ($1.12) all due to release results after the close.

Join thousands 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.

Dow Theory: Transports Sputter, Industrials Power On

/in , /by

Dow Theory: Transports Sputter, Industrials Power On: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Dow Theory: Transports Sputter, Industrials Power On
  • Visual – Existing Home Sales Fall, Home Prices & Inventories Rise

Futures are lower thanks to soft earnings from Mag-7 members TSLA (down 7% premarket) and GOOGL (down 3% premarket) as well as soft economic data in Europe.

The Eurozone’s July Composite Flash PMI fell to 50.1 vs. (E) 51.0 with both the manufacturing and services components missing estimates (German data was notably weak).

Looking into today’s session, the U.S. Flash Composite PMI (E: 51.6) will be the market’s primary focus early in the day but New Home Sales (E: 644K) data is also due to be released shortly after the bell.

From there focus will likely revert to how the Mag-7 trades in the wake of yesterday’s weak tech earnings and follow through selling (like we are seeing in the pre-market) will be a drag on the major indexes.

There is also a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s strong 2-Yr auction pushed yields lower).

Finally, there are a few notable earnings reports due after the close including: F (E: $0.64), CMG (E: $0.31), and IBM (E: $2.16) and the Fed’s Bowman is scheduled to speak at 4:05 p.m. ET.

Join thousands 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.

The Fed needs a few more ‘good’ reports on inflation

/in , /by

The Fed needs a few more ‘good’ reports on inflation: Tom Essaye Quoted in MarketWatch

Here’s what it would take for June CPI reading to send stocks lower

“Stepping back, the Fed needs a few more ‘good’ reports on inflation to cut rates in September. This can be one of those needed ‘good’ reports and keep the rally rolling (although it won’t be a new, positive catalyst as markets already assume ongoing disinflation),” said Tom Essaye, founder of Sevens Report Research, in a note.

On the other hand, if the CPI report delivers a higher-than-expected number, particularly for the core, “then a quick, sharp drop in stocks shouldn’t be surprising, because again it’s widely expected and priced into stocks that 1) Inflation is falling and 2) The Fed will cut in September,” he wrote.

A “bad” CPI report would see a core reading at 3.4% year over year with a headline figure of 3.2% to 3.3%, Essaye said, likely sparking a modestly negative reaction. An “ugly” report, with a core reading of more than 3.4% year over year and a headline figure higher than 3.3%, would likely spark a major selloff because it would challenge expectations for disinflation and a September cut, he said.

Also, click here to view the full MarketWatch article published on July 11th, 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.

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.

The Important Question in a Noisy Market

/in , /by

The Important Question in a Noisy Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Important Question in a Noisy Market

Futures are slightly higher mostly on momentum as markets again ignore disappointing retailer earnings.

Hugo Boss became the latest retailer to post poor results and cut guidance as anecdotal warnings on consumer spending continue to grow.

The only notable economic number overnight was the German ZEW Sentiment Index and it met expectations.

Today focus will stay on economic data and earnings. The key economic report today (and of the week) is Retail Sales (E: -0.3%) and if that number is weaker than expected, look for concerns about a slowdown to grow (although that likely won’t hit stocks immediately as bad data is still good for stocks).  We also get the Housing Market Index (E: 43) and one Fed speaker, Kugler (2:45 p.m. ET), but they shouldn’t move markets.

On the earnings front the season continues to heat up and reports we’ll be watching today include:  BAC ($0.79), UNH ($6.65) and MS ($1.65).

Join thousands 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.

July MMT Chart and Powell Testimony Takeaways

/in , /by

July MMT Chart and Powell Testimony Takeaways: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Powell Testimony Takeaways – Underappreciated Growth Risks
  • July MMT Chart – All Scenario Targets Hit New Highs

Futures are higher again this morning amid firming Fed rate cut bets after Powell’s first day of semiannual testimony on Capitol Hill while inflation data was mixed overnight.

Economically, inflation data in Asia was mixed as Chinese CPI fell to 0.2% vs. (E) 0.4% y/y but Japanese PPI rose from an upwardly revised 2.6% in May to 2.9% in June.

There are no notable economic reports in the U.S. today which will leave markets primarily focused on Fed Chair Powell’s second day of Congressional testimony, this time before the House Financial Services Committee.

There are two additional Fed speakers this afternoon, Goolsbee and Bowman at 2:30 p.m. ET while Cook speaks later this evening, well after the close (7:30 p.m. ET).

Finally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. Yesterday’s 3-Yr Note auction saw solid demand, however there is some uncertainty about demand for longer duration Treasuries right now, and weak results at today’s auction could send those yields higher which has the potential to trigger some profit taking in equities.

Join thousands 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.

A lack of market breadth won’t lead to markets reversing

/in , /by

Lack of market breadth won’t lead to markets reversing: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Stock Market’s Breadth Is Improving. Why It Matters.

Though a lack of market breadth won’t lead to markets reversing, Sevens Report Research’s Tom Essaye told Barron’s, it is worth watching.

“The lack of breadth tells you something about the underlying business fundamentals in the economy,” Essaye says. “If everything were as healthy as the S&P 500 would have you believe, breadth would be better.”

He says the index’s performance may be overstating how well things are going for U.S. firms.

“It doesn’t mean the reality is bad—it’s just not as good as that single index is making you think it is,” Essaye says.

Also, click here to view the full Barron’s article published on July 3rd, 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.