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The OPEC+ Decision Was A Clear Disappointment

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The OPEC+ Decision Was A Clear Disappointment: Tyler Richey Quoted in Morningstar

Oil prices stretch loss to a 4th session in a row to settle at lowest since July

“The OPEC+ decision was a clear disappointment last week due to both the underwhelming amount of additional [oil] output curbs and the voluntary nature of the 2024 policy cuts,” said Tyler Richey, co-editor at Sevens Report Research.

“The market didn’t buy it, however, as the bears are pressing OPEC+ for more clarity on the long-term outlook for policy plans and reassurance that the group is willing to do ‘whatever it takes’ to keep oil near or above $80/barrel,” Richey told MarketWatch on Tuesday.

“Looking ahead, the price action in oil has become increasingly heavy, and if there is not some sort of positive or bullish market catalyst ahead, we are likely to see a test of the 2023 lows in the $67/barrel area” for WTI, analysts at Sevens Report Research wrote in a Tuesday note.

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

Oil Inventories

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.

Stock Rally, 1o-Yr Treasury Yield, and Fed Policy

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Stock Rally, Treasury Yield, and Fed Policy: Tom Essaye Quoted in MarketWatch on MSN

Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

But the subsequent rally for stocks after the Nov. 1 Fed meeting, with the S&P 500 jumping more than 6% over eight days, and a 50 basis point drop in the 10-year Treasury yield were “overdone and not governed by facts,” said Tom Essaye, founder of Sevens Report Research, in a note.
“Meanwhile, if we think about what the Fed said last week, namely that the rise in the 10-year treasury yield was doing the Fed’s work for it and as a result they may not have to hike rates, then the short/sharp decline in the 10-year yield we’ve seen could essentially remove the reason for the Fed not having to hike rates — and that could put a rate hike back on the table!” he wrote. “That’s essentially what Powell reminded us of yesterday and that, along with the poor Treasury auction, pushed yields higher,” setting up pressure on stocks.

Also, click here to view the full article published by MSN on November 11th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Treasury Yield

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 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.

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.

Tom Essaye Quoted in MaketWatch on August 14th, 2023

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China-focused ETFs drop as country’s property woes highlight ‘recession risks in China are real’

Concerns about China’s economy increased Monday after Country Garden Holdings Co. suspended trading in some offshore bonds, “reminding investors of Chinese property market volatility from years ago and reinforcing that recession risks in China are real,” Tom Essaye, founder and president of Sevens Report Research, said in a note. He also cited “downbeat trade data out of China” last week, with imports and exports both missing estimates.

Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in Market Watch on July 31st, 2023

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Stocks could sink into a bear-market recession, says technician. Here are five signals on when it likely starts.

“We continue to respect the rally and acknowledge the trend in equities is still higher, but we remain ‘patient bears’ with regard to stocks given the deeply inverted yield curve,” Tyler Richey, co-editor at Sevens Report Research wrote in a Monday report.

“We view the fact that most Treasury spreads have inverted to levels not seen since the early 1980s as a clear warning sign that the more than 500 basis points of Fed rate hikes in less than 18 months was way too much for the economy to weather,” noted Richey. 

Click here to read the full article.

Sevens Report Analysts Quoted in Morningstar on July 20th, 2023

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Natural-gas futures settle nearly 6% higher; oil gains

Oil prices, meanwhile, finished higher. Global demand and supply will determine if WTI crude can “trade sustainably” above $80 a barrel in the near term, analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.

Sevens Report Analysts Quoted in Market Watch on July 18th, 2023

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Oil futures score first gain in 3 sessions

The disappointing Chinese economic data offset an increase in Russia/Ukraine tensions to push commodity prices lower on Monday, analysts at Sevens Report Research wrote in Tuesday’s newsletter. “A Chinese economic slowdown, if it happens, will add to demand concerns” they said. Click here to read the full article.

Tom Esaye Quoted in Market Watch on July 17th, 2023

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As the Dow hits 2023 high, one of the oldest stock-market forecasting tools is making a comeback

Despite numerous warning signals from cross asset analysis, including the still deeply inverted yield curve, Dow Theory, which is one of the most historically accurate strategies to identify the primary trend in the stock market, is now saying the path of least resistance is higher for the first time since April of 2022, said Tom Essaye, founder of Sevens Report Research and a former Merrill Lynch trader, in a Monday note to clients. Click here to read the full article.

Tom Essaye Quoted in Market Watch on July 17th, 2023

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Why U.S. stock-market investors shouldn’t expect positive economic data to push S&P 500 materially higher

While it’s undeniable that fears of a hard landing, inflation and hawkish Fed have not materialized, the reality is that the current level of the S&P 500 largely factors all of that in, so last week’s CPI and PPI reports didn’t provide the market with a new positive catalyst, but instead just reinforced what was already widely assumed,” Tom Essaye, founder of Sevens Report Research, wrote in a Monday note. Click here to read the full article.

Current Market Glossary (For Clients & Prospects)

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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).