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Happy New Year

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Happy New Year: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Happy New Year

Futures are little changed following a quiet night of news and ahead of the final trading day of the year.

Economically there was more evidence of global disinflation overnight as South Korea’s Core CPI fell to 2.8% vs. (E) 2.9% while Spain’s Core CPI also declined to 3.8% from 4.5%.

Geo-politically, there were no significant events overnight and the number of ships transiting the Suez Canal is rising again although tensions remain high.

Today there is one economic report, the Chicago PMI (E: 50.0), but barring a massive drop that shouldn’t move markets and we’d expect a mostly quiet trading on the final day of a good year in the markets and ahead of a long weekend.   From all of us at Sevens Report Research please have a happy and safe New Year.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the 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 ’23 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.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

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Two Important Differences in 2024

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Why Last Week’s Price Action is Important for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Two Important Differences in 2024

Futures are little changed following a generally quiet night of news as there was no notable economic data or significant market moving events.

Chinese industrial profits rose 29.5% in November, accelerating substantially from the 2.7% gain in October and offering some anecdotal optimism about future growth.

Geo-political tensions remained elevated in the Mid-East following increased attacks on U.S. troops in the region, but no specific escalation occurred overnight.

Today the most notable event is a five-year Treasury bond auction and markets will want to see strong demand (like we saw at yesterday’s two-year auction) to keep rates drifting lower and dovish Fed/lower rates momentum in place through year-end.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the 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 ’23 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.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

Market Multiple Table: December Update

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Market Multiple Table: December Update: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – December Update (Unbranded Copy Available)
  • Chart – 10-Yr Yield Violates Long-Term Uptrend, 2023 Lows in Focus

Stock futures are slightly higher and bond yields are falling modestly this morning. This is as traders digest a dovish BOJ decision and largely in-line Eurozone inflation report.

The Bank of Japan left their benchmark policy rate unchanged at -0.10%. With no hint of a January rate hike sending the yen down >1% and the Nikkei up nearly 1.5% overnight.

Economically, the Eurozone HICP Narrow-Core inflation rate favorably fell from 4.2% to 3.6% last month, meeting estimates.

Looking at today’s potential market catalysts, there is one economic report to watch: Housing Starts (E: 1.360 million), and two Fed officials are to speak: Bostic (12:30 p.m. ET) and Goolsbee (6:00 p.m. ET).

Lastly, as long as the housing market data is not a big shock, the release shouldn’t move markets this morning while Bostic’s comments will be closely watched to see if he joins Daly and others from the Fed in acknowledging concerns about the labor market (which would add a dovish tailwind).

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Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

We’ve been contacted by advisor subscribers who wanted to use the remainder of their 2023 pre-tax research budgets to extend their current subscriptions, upgrade to an annual (and get a month free) or add a new product (Alpha, Quarterly Letter, Technicals).

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

West Texas Intermediate Crude Tested Critical 2023 Support

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Oil Futures Finished Higher: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Oil futures end modestly higher after posting 7 consecutive weekly declines

Gains for the session came from a “combination of near-term oversold conditions in the futures market” after West Texas Intermediate crude tested critical 2023 support in the upper $60s last week, said Tyler Richey, co-editor at Sevens Report Research.

Oil futures finished higher on Monday after posting seven consecutive weekly declines.

Generally improving investor sentiment and risk-on money flows across other asset classes have also provided support to oil, he said. 

Also, click here to view the full MarketWatch article published on December 11th, 2023. 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.

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.

Jobs Report Preview

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

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

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

We’ve been contacted by advisor subscribers who wanted to use the remainder of their 2023 pre-tax research budgets to extend their current subscriptions, upgrade to an annual (and get a month free) or add a new product (Alpha, Quarterly Letter, Technicals).

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

Separating Short Term vs. Longer Term in this Market

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Separating Short Term vs. Longer Term: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Separating Short Term vs. Longer Term in this Market
  • Important Context for Economic Data Going Forward
  • Weekly Market Preview:  How Much Higher Can Markets Rally in 2023?
  • Weekly Economic Cheat Sheet:  Does Data Start to Roll Over?

Futures are modestly lower following a generally quiet weekend as markets further digested last week’s stock and bond rally.

On inflation, Swiss CPI rose less than expected (1.4% y/y vs. (E) 1.7%) continuing last week’s trend of smaller than expected increases in inflation in the EU region.

On growth, German exports underwhelmed (-0.2% vs. (E) 1.1%) continuing the recent trend of both lower inflation and slowing growth.

Today the only notable economic report is Factory Orders (E: -2.6%) and it’d take a major beat or miss to move markets, so we should expect continued general digestion of last week’s rally.

Please email info@sevensreport.com if you have any trouble downloading today’s Report or need to contact us.

Separating Short Term vs. Longer Term in this Market

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.

Bull Case vs. Bear Case: What’s It Mean Mean for Markets?

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Bull Case vs. Bear Case: What’s It Mean for Markets? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Bull Case vs. Bear Case:  What’s It Mean for Markets?
  • What Should Outperform in Q1/H1
  • OPEC+ Decision Takeaways

Futures are little changed as global manufacturing PMIs were better than expected, but looming commentary from Fed Chair Powell is keeping futures little changed.

Economically, Euro Zone (44.2 vs. (E) 43.8) and UK (47.2 vs. (E) 46.2) manufacturing PMIs beat estimates, reducing concerns about regional economic slowdowns.

Today focus will be on Fed speak and economic data.  Fed Chair Powell speaks twice today at 11:00 a.m. and 2:00 p.m. ET. Markets will want to see if Powell repeats the “policy is appropriate” message we received from Fed Governor Waller earlier this week.  If he does, stocks can rally.

On the economic front, we get one of the “big three” monthly economic reports today via the November ISM Manufacturing PMI (E: 47.5). So the markets will want to see more Goldilocks data (activity that meets estimates with declines in price indices).  Beyond Powell, we also get two other Fed speakers, Goolsbee (10:00 a.m. ET) and Cook (2:00 p.m. ET), but they shouldn’t move markets.

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FOMC Meeting Minutes Takeaways

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FOMC Meeting Minutes Takeaways: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Meeting Minutes Takeaways (Dovish in Hindsight)
  • Existing Home Sales Data Offers Mixed Signals

Futures are modestly higher this morning as a pullback in oil futures is pushing bond yields lower while investors digest a volatile reaction to mostly positive NVDA earnings.

Economically, U.K. CBI Industrial Trends saw the headline Orders Balance fall -35% vs. (E) -25% in November which is driving dovish money flows this morning.

Today’s economic calendar is a busy one with Durable Goods Orders (E: -3.2%), Jobless Claims (E: 225K), and Consumer Sentiment (E: 60.5, 1-Yr Inflation Expectations: 4.4%) all due to be released before 10:00 a.m. ET.

There are no Fed speakers today so markets will trade off of the data. If the reports are largely in line, expect mostly sideways price action with the Thanksgiving Day break looming, however, hawkish or dovish surprises will still move markets despite thin attendance and low volumes.

The Treasury will hold auctions for 4-week and 8-week Bills at 11:30 a.m. ET. While auctions for these securities usually don’t move markets, investors are more closely watching auction results following the recent weak 30-Yr auction that roiled markets. As there is potential the outcomes impact equities in an otherwise quiet environment ahead of Thanksgiving.

FOMC Meeting Minutes Takeaways

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Three Pillars of the Rally Updated

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Three Pillars of the Rally Updated: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Three Pillars of the Rally Updated (An Important Change to Watch)
  • Weekly Economic Cheat Sheet – Friday’s Flash Composite PMI in Focus

Futures are steady after a mostly quiet weekend of financial news and thinning volumes coming into the holiday-shortened Thanksgiving trading week.

Geopolitically, Iran-backed Houthi rebels seized a cargo ship in the Red Sea. This is rekindling a fear bid in global energy markets as seaborne oil cargoes are viewed as “at risk.” The rise in oil prices is modestly pressuring Treasuries this morning (yields up slightly).

Economically, German PPI met estimates of -11.0% Y/Y in October further solidifying the global peak-inflation argument.

Looking into today’s session, there is just one economic report on the calendar with Leading Indicators (E: -0.6%) due out shortly after the open and there is just one Fed speaker midday: Barkin (12:00 p.m. ET).

One potential catalyst that could shake up markets today is the 20-Year Treasury Bond auction at 1:00 p.m. ET as weak results could trigger a rebound in yields. Especially given fading attendance this week and subsequently less liquid market conditions across asset classes.

Three Pillars

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