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Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • An Excellent Explanation of the Economic Cycle
  • Oil Update (How Far Could It Fall?)

Futures are little changed despite hawkish commentary from the BOJ and more underwhelming economic data.

BOJ commentary overnight was hawkish and markets now expect a rate hike at the December meeting. And that expectation is pushing global yields slightly higher.

European economic data was again soft as German Industrial Production declined –0.4% vs. (E) 0.5%. This adds to the recent string of soft EU economic reports.

Today focus will remain on economic data and specifically weekly Jobless Claims (E: 222K) and Continuing Claims (1.91 million).  These numbers have been drifting higher lately and Continuing Claims just hit a two-year high.  If we see further upside in these readings today that will add to the growing list of readings that implies the economy is losing momentum and while that may not cause a drop in stocks today, a slowing economy will likely become a headwind in early 2024.

Jobs Report Preview

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Tomorrow’s Jobs Report

Tomorrow’s jobs report: Tom Essaye Quoted in BNN Bloomberg


Stock Futures Slide as Bond Yields Keep Rising

“Tomorrow’s jobs report may be the most important one of the year,” according to Tom Essaye, a former Merrill Lynch trader.

If the report is too hot and the yield on the U.S. 10-year bond moves close to 5 percent. “We could easily see the S&P 500 fall through the 200-day moving average and at that point we could see an acceleration of the declines in stocks,” Essaye wrote in his The Sevens Report newsletter.

Also, click here to view the full BNN Bloomberg article published on October 5th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Tomorrow’s Jobs Report

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An Important Jobs Day

An Important Jobs Day: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • An Important Jobs Day (Jobs Report Preview – Abbreviated Version)

Futures are modestly higher following better than expected economic data overnight and on positioning ahead of today’s important jobs report.

Japanese Household Spending (3.9% vs. (E) 0.6%) and German Manufacturers’ Orders (3.9% vs. (E) 2.1%) both beat estimates. This points to some resilience in the global economy.

Today focus will be on the jobs report and expectations are as follows:  Job Adds: 160K, UE Rate: 3.7%, Wage Growth: 0.3% m/m & 4.3% y/y.  For markets, a job adds figure modestly below expectations with an increase in unemployment and drop in wages should push Treasury yields lower and spur a strong rebound in stocks.

Conversely, if we see a job adds number close to or above 250k, a decline in unemployment or rise in wages, expect higher Treasury yields and lower stock prices.

Outside of the jobs report today we also get Consumer Credit (E: $11.5B) and one Fed speaker, Waller (12:00 p.m. ET), but they shouldn’t move markets.

An Important Jobs Day

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Jobs Report Preview

Jobs Report Preview: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Jobs Report Preview (How Bad Would a Too Hot Number Be for Markets?)
  • Why Oil Dropped

Futures are modestly lower on slightly stagflationary foreign economic data while investors digest Wednesday’s bounce and look ahead to tomorrow’s jobs report.

Economically, foreign data hinted at stagflation again as Taiwan and South Korean CPIs rose slightly more than expected while German exports missed estimates (-1.2% vs. (E) – 0.6%).

Today focus will remain on data and Fed speak.  The key economic report is Jobless Claims (E: 210K) and at this point, the higher the better for stocks.  We also have numerous Fed speakers today including Mester, Barkin, Daly, and Barr.  However, none of them are Fed “leadership” so unless they provide surprise comments they shouldn’t move markets.

Jobs Report Preview

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Jobs Report Preview

Jobs Report Preview: Get the simple talking points you need to strengthen your client relationships with a free trial of The Sevens Report.


What’s in Today’s Report:

  • Jobs Day

Futures are modestly higher ahead of the jobs report following slightly better than expected final global manufacturing PMIs.

Economic data overnight was better than expected as the Chinese Caixin manufacturing PMI (a private market reading) beat estimates (51.0 vs. (E) 49.3). While EU (43.5 vs. (E) 43.7) & UK (43.0 vs. (E) 42.5) final manufacturing PMIs were no worse than feared.

Today there are two important economic reports that have the potential to move markets.  The first is the jobs report, and expectations are as follows:  170K Job Adds, 3.5% UE Rate, 0.3% m/m & 4.4% y/y Wage Growth).

As we covered in the Jobs Report Preview, “Too Hot” readings in job adds or wages will likely push Treasury yields higher and weigh on stocks.  But, a “Too Cold” job adds number would be a potentially more concerning signal over the medium and longer term, regardless if there’s any short term “bad is good” rally.

The other important economic report today is the ISM Manufacturing Index (E: 46.8) and markets will want to see stability.  The August flash PMIs were ugly and if we see the ISM manufacturing PMI drop from current levels, that will increase hard landing concerns.

Finally, there’s one Fed speaker today, Mester at 9:45 a.m. ET, but she shouldn’t move markets.

Jobs Report Preview


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Jobs Report Preview

What’s in Today’s Report:

  • Jobs Report Preview
  • Oil Market Update & EIA Analysis

Futures are little changed following a busy night of mixed economic data.

Positively, the August Chinese PMIs were better than feared, rising to 50.3 vs. (E) 50.1 and helping to slightly reduce China recession worries.

Negatively, the EU flash HICP (their version of CPI) was hot on the headline (5.3% vs. (E) 5.1%) but in-line on core (5.3% y/y), underscoring that inflation is sticky in the EU.

Focus today will be on economic data, specifically Jobless Claims (E: 238K) and the Core PCE Price Index (E: 0.2% m/m, 4.2% y/y).  For stocks to extend the week’s gains (and continue to bounce back from the broader pullback) investors won’t want any surprises.  In the case of jobless claims, that means no big jump in claims that hints at economic weakness, nor a further drop that might make the Fed more hawkish.  On the core PCE Price Index, an in-line to slightly below reading would be positive as it’d further pressure Treasury yields and likely lift stocks.

Finally, there is one Fed speaker today, Collins at 9:00 a.m. ET, but she shouldn’t move markets.

Tom Essaye Quoted in Barron’s on August 2nd, 2023

Stocks Open Lower Amid Fitch Downgrade

“Looking into today’s session, focus will be on the U.S. credit downgrade as investors digest the potential implications on fixed income markets and re-assess valuations of risk assets,” wrote Tom Essaye, founder of the Sevens Report.

Click here to read the full article.

Jobs Day

What’s in Today’s Report:

  • Jobs Report Preview (Abbreviated Version)

Futures are slightly higher thanks to good AMZN earnings and solid EU economic data.

AMZN and AAPL, the last two big earnings reports for Q2, were mixed but generally fine. AMZN posted strong results (stock up 8%) while AAPL’s numbers were slightly underwhelming, but nothing terrible (stock down 1%).

Economically, EU data was solid as German Manufacturers’ Orders and EU Retail Sales beat estimates.

Today focus will be on the jobs report and estimates are as follows:  Job Adds, 200k.  Unemployment Rate, 3.6%.  Wages, 0.3% m/m, 4.2% y/y.  The key for markets today is the reaction of the 10-year yield to the jobs report.  If the jobs report is “Too Hot” then 10-year Treasury yield will rise and it’ll likely pressure stocks.  Conversely, if we get a Goldilocks number, then the 10-year yield should fall modestly and stocks can extend this early rally.

What Caused Yesterday’s Selloff? (It Wasn’t the Fitch Downgrade)

What’s in Today’s Report:

  • What Caused Yesterday’s Selloff? (It Wasn’t the Fitch Downgrade)
  • Jobs Report Preview
  • EIA Analysis and Oil Market Update

Futures are modestly lower following Wednesday’s selloff on more disappointing earnings and mixed economic data.

Economically, the EU Composite PMI slightly missed estimates (48.6 vs. (E) 48.9) as recession worries creep higher.

Tech earnings underwhelmed again, with disappointing results from QCOM and PYPL (both stocks down 7%-ish).

Today will be a busy day of data and earnings.  First, the BOE is set to hike rates 50 bps, but markets will want to see if they signal this is the last hike of the cycle.

Turning to the U.S., there are several important economic reports today including: Jobless Claims (E: 225K), ISM Services PMI (E: 53.0) and Unit Labor Costs (E: 2.6%).  Investors need Goldilocks economic data to help stabilize stocks, and if these reports are stronger than expected, look for Treasury yields to rise and for stocks to fall (like what happened yesterday).

Finally, on earnings, we get results from two of the biggest stocks in the market after the close:  AAPL ($1.19) and AMZN ($0.34).

Current Market Glossary (For Clients & Prospects)

What’s in Today’s Report:

  • Current Market Glossary (For Clients & Prospects)

Futures are slightly lower following a night of disappointing tech earnings.

NFLX, TSLA and TSM all posted disappointing earnings results (stocks down 3% – 6% pre-market) and that’s weighing on Nasdaq and S&P 500 futures.

There was no notable economic data overnight.

Today will be another busy day of data and earnings results.  On the economic front, the two key reports are Weekly Jobless Claims (E: 250k) and Philly Fed (E: -10.0), and as you can guess (and especially at these stretched valuations) markets will want to see more Goldilocks data (so stable claims and Philly and falling prices).  We also get Existing Home Sales (E: 4.23M) but, barring a big miss, that shouldn’t move markets.

Turning to earnings, focus today is on industrials and consumer/healthcare names, and some important results to watch include:  AAL ($1.58), TSM ($1.07), JNJ ($2.61), PM ($1.48), COF ($3.31), CSX ($0.49), and PPG ($2.14).