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What Yesterday’s Rebound Means for Markets

What’s in Today’s Report:

  • Five Reasons Stocks Rallied Yesterday
  • What the Rebound Means for Markets

Futures are slightly higher as markets digest Thursday’s rebound amidst more positive news from the UK.

Support for the Truss spending/tax cut plan has totally eroded and markets are hopeful the plan will be scrapped entirely, and that’s helping global bond yields fall.

Today there are two notable economic reports, Retail Sales (E: 0.2%) and University of Michigan Consumer Sentiment (E: 58.8), but the key for markets will be the inflation expectations within Consumer Sentiment and if the five-year inflation expectations fall further below 3.0%, that’ll be a positive for markets.  We also get two Fed speakers, George (10:00 a.m. ET) and Cook (10:30 a.m. ET) but we don’t expect them to move markets.

Earnings season also unofficially starts today and key reports to watch include: JPM ($2.97), MS ($1.51), C ($1.55), WFC ($1.09), PNC ($3.66), USB ($1.17) and FRC ($2.19).  If results are better than expected, that can extend Thursday’s rebound.

The Current Reality Facing Stocks (Not Good)

What’s in Today’s Report:

  • The Current Reality Facing Stocks (Not Good)
  • Technical Update:  Watch the VIX
  • Weekly Economic Cheat Sheet:  CPI Thursday is the Key Number
  • Weekly Market Preview:  Can Earnings Hold Up?

Futures are slightly lower as markets digest the implications of Friday’s strong jobs report following a mostly quiet weekend.

Friday’s jobs report won’t make the Fed any more hawkish, but it’ll keep stocks facing a dual headwind of aggressive Fed and earnings pressure, and that’s weighing on futures.

There were no notable economic reports overnight.

Today is Columbus Day so there are no economic reports while the banks and bond market will be closed, likely leading to slow trading in stocks.  There is one Fed speaker, Evans (9:00 a.m. ET), but he shouldn’t move markets (at this point it’s well-known what the Fed plans to do).

Sevens Report Analysts Quoted in Market Watch on September 28th, 2022

U.S. oil prices settle back above $80 as Hurricane Ian forces production cuts

We have to acknowledge the dominant trend is still lower for the oil market right now but we do continue to look for the market to stabilize soon as we do not believe the combination of over-compliance by OPEC+, tight global physical markets, and the geopolitical uncertainty surrounding the war in Ukraine can be solely offset by concerns about the global economy…wrote analysts at Sevens Report Research, in a note. Click here to read the full article.

What’s Needed for Markets to Stabilize

What’s in Today’s Report:

  • Bottom Line:  What’s Needed for Markets to Stabilize (It’s Not That Much)
  • Weekly Market Preview:  Can Bond Yields Fall Further?
  • Weekly Economic Cheat Sheet:  Jobs Report on Friday

Futures are slightly higher following some backtracking on the UK fiscal spending plan.

UK PM Truss has abandoned part of her spending/tax cut plan amidst market and political pressure as she will no longer eliminate the 45% top tax rate (this is a mild positive as GILT yields were slightly lower on the news).

Oil prices rallied 3% as markets expect a material production cut from OPEC+ at this week’s meeting.

Today focus will be on the ISM Manufacturing PMI (E: 52.0) and while the headline reading is important as always, the Prices index will also be closely watched.  If that index can decline below 50 it will be a strong signal that dis-inflation is starting to work its way into the economy (and that’s a good thing). There’s one Fed speakers today, Williams at 3:10 p.m. ET but he shouldn’t move markets.

Sevens Report Analysts Quoted in Market Watch on September 20th, 2022

Oil prices settle at a nearly 2-week low as an expected Fed rate hike may hurt energy demand

“We continue to believe that the oil market is in the process of finding its footing, However, a hawkish Fed this week could further stoke fears of a hard landing and spur a continued rally in the dollar, which would surely see the recent lows near $80/barrel tested into the weekend,” said analysts at Sevens Report Research, in a Tuesday newsletter. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on September 21st, 2022

U.S. oil futures settle lower as Fed rate hike feeds worries about a recession

Higher rates are restrictive in nature, and likely to become a headwind on consumer spending including that on refined products like gasoline and diesel…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Forbes on September 19th, 2022

Stocks Struggle As Markets Brace For Another ‘Unusually Large’ Fed Rate Hike

Oil prices fell more than 2% as risks of a recession “weighed heavily” on the market, analyst Tom Essaye of the Sevens Report, wrote in a Monday note. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on September 13th, 2022

Oil prices finish lower after stronger-than-expected U.S. inflation reading

The “hot” CPI print also brought a 100 basis point rate hike into play at the September meeting. A more aggressive Fed in the months ahead, “will choke off growth and ultimately weigh on broader consumer demand, including demand for refined products…said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.

 

Sevens Report Co-Editor Tyler Richey Quoted in MorningStar on September 8th, 2022

Oil futures end higher as a recent drop to 7-month lows left prices ‘oversold’

Official U.S. government data revealed a “massive” weekly build in commercial U.S. crude stockpiles, leading to a “knee-jerk reaction” lower in oil prices…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on September 8th, 2022

Oil futures finish higher on ‘oversold’ condition, despite a hefty weekly rise in U.S. supplies

Oil futures ended higher on Thursday, with prices near-term oversold, following Wednesday’s multi percentage-point drop to multi-month lows…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.