Posts

Two Sector Rotation Strategies With Proven Outperformance

/in , , /by

Two Sector Rotation Strategies With Proven Outperformance: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Two Sector Rotation Strategies With Proven Outperformance
  • Dueling Political Influences on Oil Prices

Futures are modestly higher on more solid tech earnings and as markets are in a “show me” mode on tariff threats.

Apple (AAPL) beat earnings overnight and the stock is up 3% pre-market and that’s helping push futures higher.

On tariffs, markets remain skeptical tariffs will be implemented against Canada and Mexico tomorrow and if they are, they’ll be largely ineffectual.

Today focus will be squarely on the Core PCE Price Index (E: 0.2% m/m, 2.6% y/y).  This is the Fed’s favorite measure of inflation and markets will want to see an in-line to weaker number to keep rate cut expectations intact.  If this number is above expectations, however, look for yields to jump and for that to likely hit stocks.

In addition to the core PCE Price Index we do have one Fed speaker today (Bowman at 8:30 a.m. ET) and some more notable earnings (XOM ($1.58), ABBV ($2.13), CL ($0.89)) but they’re unlikely to move markets.

Join thousands 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.

What Would Cause the Fed to Cut Rates Again? (Two Answers)

/in , , /by

What Would Cause the Fed to Cut Rates Again? (Two Answers): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Would Cause the Fed to Cut Rates Again? (Two Answers)

Futures are modestly higher despite mixed tech earnings.

TSLA (up 3% pre-market) and META (up 1% pre-market) results were “fine” while MSFT disappointed (MSFT down  4% pre-market) but none of the results were surprising enough to impact the broader tech sector.

Today will be a busy day of economic data and earnings including, in order of importance, the ECB Rate Decision (E: 25 bps cut), Jobless Claims (E: 224K), Advanced Q4 GDP (E: 2.7%) and Pending Home Sales (E: 0.4%).  And, following yesterday’s Fed meeting, it remains the case that in-line to slightly weak results are the “best” case for stocks as they imply solid growth but keep rate cut expectations stable.

On earnings, the key results today include: AAPL ($2.36), INTC ($0.12), V ($2.66), UPS ($2.52), MA ($3.68), CAT ($4.97).

Join thousands 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.

FOMC Preview (Good, Bad, and Ugly Scenarios)

/in , , /by

FOMC Preview (Good, Bad, and Ugly Scenarios): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview – What’s Expected, Hawkish-If, Dovish-If Scenarios
  • December Durable Goods Orders Takeaways (Goldilocks)
  • NVDA Chart – An Ominous Technical Setup

Stock futures are slightly higher ahead of today’s Fed decision as global bond markets remain steady on the back of some favorable inflation metrics overnight.

Economically, Australian CPI fell from 2.8% to 2.4% vs. (E) 2.6% in Q4’24 and Eurozone M3 Money Supply rose 3.5% Y/Y vs. (E) 4.0%, both of which helped ease inflation fears.

There are no economic reports today leaving market focus on the FOMC Decision (2:00 p.m. ET) and Powell’s Press Conference (2:30 p.m. ET). As today’s Fed preview details, a hawkish outcome that sends yields higher could cause a painful selloff in equities.

Today is also the first day of big tech earnings with TSLA ($0.75), META ($6.90), MSFT ($3.12), and IBM ($3.74) all due to report quarterly results after the close. Expectations are already optimistic for 2025 so any disappointment could pressure stocks in after-hours trading regardless of the initial reaction to the Fed announcement.

Join thousands 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 last thing Saudi Arabia wants right now is lower oil prices amid their already subdued output

/in , , /by

The last thing Saudi Arabia wants right now is lower oil prices amid their already subdued output: Tyler Richey, Sevens Report Co-Editor, Quoted in MarketWatch on MSN

Crude oil extends losing streak as Trump urges OPEC to lower prices

While Trump is known to enjoy good relations with Saudi Crown Prince Mohammed bin Salman, but “the last thing Saudi Arabia wants right now… is lower oil prices amid their already subdued output, so they would not be likely to roll over and open the spigots without some sort of concessions – whether it be military [or] defense assets… or some other promise of U.S. investment in Saudi Arabia,” according to Tyler Richey, co-editor at Sevens Report Research.

Also, click here to view the full Seeking Alpha article published by MSN on January 24th, 2025. 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.

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.

Oil began to “peel off” after comments from Trump

/in , , /by

Oil began to “peel off” after comments from Trump: Tyler Richey Quoted in Morningstar

Oil at 2-week low as Trump’s efforts to lower crude prices imply a boost in output

Oil began to “peel off” after comments from Trump suggested that the Organization of the Petroleum Exporting Countries may raise oil production, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

In part due to the president’s “America First global policy stance,” Richey said, “the world knows that he wouldn’t hesitate to inflict economic pain on nations with policies in place that are not aligned with our domestic best interests. That includes major oil-producing countries like Saudi Arabia, which has been the de facto leader of OPEC since its inception.”

He continued: “The last thing Saudi Arabia wants right now, though, is lower oil prices amid their already subdued output, so they would not be likely to roll over and open the spigots without some sort of concessions – whether it be military [or] defense assets … or some other promise of U.S. investment in Saudi Arabia.”

Also, click here to view the full MarketWatch article published in Morningstar on January 23rd, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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.

What Happens to Markets If the Bond Vigilantes Return?

/in , , /by

What Happens to Markets If the Bond Vigilantes Return?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Happens to Markets If the Bond Vigilantes Return?
  • What Happens to Markets If the Bond Vigilantes Don’t Return?

Futures are slightly lower mostly on digestion of the recent rally and following a mostly quiet night of news.

Economically, the only notable number was UK CBI Industrial Trends, which were slightly better than expected (-34% vs. (E) -40%).

Politically, President Trump conducted an interview with Sean Hannity overnight but nothing new was revealed.

Today we get our first notable economic report of the week via Jobless Claims (E: 218K) and the case remains that Goldilocks data (so in-line to slightly weak) is the best case scenario for stocks, as it implies solid growth but won’t further reduce rate cut expectations.

On earnings, the reporting season continues to gain steam and some reports we’re watching today include GE ($1.02), AAL ($0.64), FCX ($0.25), TXN ($1.19), ISRG( $1.77).

Join thousands 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.

Bond Vigilantes Are Back (Part 1)

/in , , /by

Bond Vigilantes Are Back (Part 1): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Bond Vigilantes Are Back (They’re Just Not Here Yet) – Part One

U.S. futures are higher with global markets this morning amid a continued relief rally after Trump focused on AI and energy initiatives instead of tariffs on his first day.

Economically, New Zealand CPI came in as expected at 0.5% in Q4 which helped ease global inflation worries.

Today there is just one, second-tiered economic report due to be released: Leading Indicators (E: -0.1%) which is unlikely to move markets.

The Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET and a 20-Year Bond auction at 1:00 p.m. ET. Investors will want to see more strong demand for both short duration and longer duration Treasuries to keep yields from rising again.

Finally, earnings season continues today with PG ($1.87), JNJ ($2.01), ABT ($1.34), KMI ($0.33), DFS ($3.15), and AA ($0.91) all releasing quarterly reports. Generally strong top and bottom line results would be an added tailwind to stocks.

Join thousands 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 oil market seems more preoccupied

/in , , /by

The oil market seems more preoccupied: Tyler Richey Quoted in Morningstar

Oil prices end higher as traders weigh demand prospects, supply risks

The oil market seems more “preoccupied with the threat of an imminent physical-market deficit leading to regional supply shortages than easing geopolitical headwinds,” said Tyler Richey, co-editor at Sevens Report Research.

Prices showed little reaction to news Wednesday of an Israel-Hamas cease-fire deal that will go into effect on Sunday. In recent months and quarters, the “simmering geopolitical fear bid under oil prices steadily lost significance over time” as global oil markets were never materially impacted, said Richey.

Also, click here to view the full MarketWatch article published in Morningstar on January 15th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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.

Some of the biggest gains in the bull market

/in , , /by

Some of the biggest gains in the bull market: Tyler Richey Quoted in Business Insider

Oracles of Wall Street: 11 pros who nailed 2024’s top trends

Building on Sevens Report founder Tom Essaye’s bullish fundamental outlook, Richey compiled the technical indicators he watches and concluded in February that the index could hit 6,000 by the end of 2024.

For example, the S&P 500’s relative strength index, which measures price momentum, had stayed in “overbought” territory for three weeks at the time. When that has happened in the past, it’s meant that the trend could continue for several months, Richey said. Investor sentiment was also bullish but not over-extended. And the yield curve was still inverted despite no sign of recession.

“Some of the biggest gains in the bull market — statistically, it’s measurable that they occur during yield curve inversions such as the late ’90s and 2006-2007,” he said.

Going into 2025, however, Richey sees signs that the rally could face hurdles if a negative catalyst comes along.

“Looking ahead, the collection of market indicators and cyclical signals we monitor suggest all the pieces are in place for this bull market to end in the weeks or months ahead and for a cyclical bear market to begin,” Richey said in an email. But he added that: “There is nothing in the current fundamental backdrop that suggests a bear market in stocks is a sure thing or even likely for that matter.”

Also, click here to view the full Business Insider article published on December 18th, 2024. 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.

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.

Four Key Areas of Policy and Politics That Matter Most

/in , , /by

Four Key Areas of Policy and Politics That Matter Most: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Four Key Areas of Policy and Politics That Matter Most to Markets
  • Weekly Economic Cheat Sheet: Composite PMIs and Jobless Claims in Focus

Futures are higher in volatile trade as investors weigh Trump’s fresh tariff threats against pro-growth policy plans.

Economically, the German ZEW Survey was mixed while the U.K. Unemployment Rate ticked up to 4.4% from 4.3%.

Looking into today’s session, there are no notable economic reports and no Fed officials are scheduled to speak, however, there are Treasury auctions for 3-Month and 6-Month Bills at 11:30 a.m. ET and 52-Week Bills at 1:00 p.m. ET. Rising yields in reaction to the auction results could lead to more market volatility and pressure stocks while strong demand (lower yields) would be welcomed by investors.

Additionally, earnings season continues today with quarterly reports from SCHW ($0.90), MMM ($1.66), DHI ($2.41), NFLX ($4.19), UAL ($3.01), and COF ($2.66), and investors will want to see evidence of continued earnings growth to support the case for a further stock market rally in 2025.

Join thousands 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.