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What’s Needed for Markets to Stabilize

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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

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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

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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

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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

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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

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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

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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.

Sevens Report Analysts Quoted in Market Watch on August 31st, 2022

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Oil futures end lower, with economic jitters fueling a more than 9% monthly loss for U.S. prices

All of yesterday’s news flow was digested as bearish for oil as the threat of OPEC+ cuts were reduced, demand estimates in Europe were adjusted lower on poor data while ‘hot’ data in the U.S. added to already hawkish money flows that bolstered the dollar and further pressured oil, wrote analysts at Sevens Report Research, in a note. Click here to read the full article.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • EIA Analysis and Oil Update

Futures are solidly lower as negative China/COVID headlines and lackluster economic data weighed on markets.

Chinese authorities put the city of Chengdu (population 17 million) in a COVID lockdown, reminding markets “Zero COVID” is still in effect.

Economically, global manufacturing PMIs were underwhelming as all major regions (EU, UK and China) posted numbers below 50 (signaling contraction).

Today focus will be on economic data and the most important number is the ISM Manufacturing PMI (E: 52.2).  Markets need to see an in-line reading, because if it’s a very strong number that will increase hawkish concerns about the Fed, and if it’s a very weak number (below 50) that will spike stagflation concerns.  Outside of the PMI we also get Jobless Claims (E: 248K) and Unit Labor Costs (E: 10.7%) and there’s also one Fed speaker, Bostic at 3:30 p.m. ET.

Sevens Report Co-Editor Tyler Richey Quoted in Morningstar on August 25th, 2022

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Oil futures post first loss in 3 sessions

However, from a fundamental standpoint, any production cuts would be aimed at offsetting the return of Iranian barrels to the global market and not a material new bullish catalyst…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.