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What Could Go Wrong in 2022

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What’s in Today’s Report:

  • What Could Go Wrong in 2022
  • Chart: Rate Hike Prospects Weigh on Nasdaq

Futures are modestly higher despite negative COVID headlines and a mixed outlook for China’s economy.

New COVID cases topped 1 million and set a record for a second day Tuesday as the highly contagious, but less severe Omicron variant continues to rip through hot spots around the globe. But for now, few nations have implemented new lockdowns allowing investors to look past the latest surge in cases.

According to Bloomberg Economics, China’s economy grew this month but property sector risks remain a key concern and that weighed on Asian shares overnight.

Today, there are two economic reports due out: International Trade in Goods (E: -$86.0B), and Pending Home Sales (E: 0.6%) but once again, neither should move markets as they should not shift the outlook for monetary policy.

There are no Fed speakers today but there is a 7-Year Treasury Note auction at 1:00 p.m. ET. If the auction is weak and yields rise materially, that could add pressure to higher valuation sectors of the market like tech/Nasdaq and drag the broader equity markets lower in thin holiday trading today. Otherwise, the Santa Claus rally remains in effect and the path of least resistance does still remain higher given the recent records in the S&P 500.

 

Sevens Report Q4 ’21 Quarterly Letter Coming January 3rd

The Q4 2021 Quarterly Letter will be delivered to advisor subscribers on Monday, January 3rd.

With several key macro issues coming to a head in the next few weeks, we believe the first quarter could be the most volatile of 2022.

We deliver the letter on the first business day of the new quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q3’21 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

Why Stocks Have Dropped

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What’s in Today’s Report:

  • Why Are Stocks Dropping?
  • Nasdaq Composite Chart: Below the 100 Day Moving Average

U.S. futures are rebounding with global shares after the U.K. decided against new lockdown measures due to Omicron while there is renewed hope for Biden’s spending bill.

Reports of a late Sunday call between Biden and Manchin, after Manchin announced that he would not support the bill on live TV, have revived hopes for the potential passage of Build Back Better in the weeks ahead.

The German GfK Consumer Climate Index fell to -6.8 vs. (E) -2.5 for January which points to a further deterioration in consumers’ outlook for income and spending in Europe’s largest economy.

There are no economic reports and no Fed officials speak today which will leave traders focused on the political drama surrounding Build Back Better and any new developments about Omicron and subsequent economic lockdown measures.

The one potential catalyst on the calendar is a 20-Yr Treasury Bond auction at 1:00 p.m. ET. A weak auction could send yields higher which could add renewed pressure on high multiple tech names and cause the major indexes to roll over.

Tom Essaye Quoted in Nasdaq.com on December 10, 2021

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History Proves That Rate Hikes Don’t Have to Dent Stocks

While the market will likely remain volatile near term, there’s no reason yet to think that stocks can’t….says Essaye of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Yahoo Finance on September 29, 2021

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Time to Short Nasdaq With These Inverse ETFs?

Really what you’re seeing is, across asset classes, the market is adopting a pro-cyclical view, which means better growth in the future…Tom Essaye, The Sevens Report Research Founder, told Yahoo Finance Live. Click here to read the full article.

Tom Essaye Quoted in Barron’s on July 30, 2021

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Amazon Sinks, Chevron Pops, and the Nasdaq Is Down

Futures are moderately lower on disappointing earnings…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Bloomberg on May 23, 2021

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Nasdaq 100 Rallies 2% as Inflation Concerns Ebb: Markets Wrap

Inflation fears will remain a headwind for stocks until it becomes clear that price pressures are temporary. “Until then, expect a more volatile market, but at this point, strong policy support for…” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here for the full article.

Sevens Report’s Tom Essaye quoted in Nasdaq on November 20, 2018

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Sevens Report’s Tom Essaye quoted in Nasdaq on November 20, 2018. Read the full article here.