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Infrastructure Outlook: Good/Bad/Ugly

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What’s in Today’s Report:

  • Infrastructure Outlook:  Good/Bad/Ugly
  • Oil Update & EIA Analysis (Can the Rally Keep Going?)

Futures are little changed following a quiet night and ahead of the week’s two big events, the ECB decision and U.S. May CPI report.

Economic data was sparse although Japanese PPI rose more than expected at 4.9% vs. (E) 3.8% yoy.  But, investors expect high inflation readings this month so it’s not moving markets.

Today the two key events are the ECB Rate Decision (E: No Change) and U.S. CPI (E: 0.4% m/m, 4.6% y/y).  Generally speaking, if the ECB is specific on tapering and core CPI runs close to 4.0% yoy (expectations are for 3.4% yoy in Core CPI) then we should expect volatility as the data will imply less central bank accommodation and more inflation. Conversely, if the ECB is vague on tapering and inflation largely meets expectations, then stocks can extend the rally.

The other notable event this morning is Jobless Claims (E: 369K) but given the issues with the labor market are supply driven (people not wanting to work) the market isn’t as focused on jobless claims any longer.

Sevens Report Co-Editor Tyler Richey Quoted in Market Watch on June 8, 2021

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Oil futures climb back to more than 2-year highs, with U.S. prices above $70 a barrel

The market just had a strong feel to it once things stabilized after an early session washout to the downside. It’s almost as if the overnight run to… said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Market Multiple Chart

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What’s in Today’s Report:

  • Market Multiple Chart
  • EIA Analysis and Oil Update
  • What Yesterday’s Jobs Numbers Mean for Today’s Report (and the Market Reaction)

Futures are little changed ahead of this morning’s jobs report and following a mostly quiet night of news.

Economic data was mixed overnight as the UK Construction PMI beat estimates while Euro Zone Retail Sales missed, but neither number is moving markets.

Infrastructure “chatter” about a potential $1 trillion compromise is getting louder, but markets remain skeptical about an infrastructure deal anytime soon.

Focus today will be on the Jobs Report and expectations are as follows: Job Adds 645K, UE Rate 5.9%, Wages 0.2% m/m).  Thursday’s strong employment data (ADP and claims) makes the market more sensitive to a “Too Hot” report (and potentially less dovish Fed) than it was on Wednesday, but the bottom line is that a number near either extreme (900k or 300k) will likely cause at least a temporary market headwind.

Also, Fed Chair Powell is speaking at a Bank of International Settlements Climate panel right now, but that shouldn’t move markets.

Key Summer Market Events (Inflation Today, Fed Tomorrow)

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What’s in Today’s Report:

  • Key Summer Market Events Part 1:  Inflation
  • EIA Analysis and Oil Market Update

Futures are slightly lower following a generally quiet night of news, although on the margin markets are seeing global central banks get less dovish.

On Wednesday, the Reserve Bank of New Zealand had hawkish commentary, while overnight the Bank of Korea hinted at a rate hike before year-end.  Neither the Reserve Bank of New Zealand nor the Bank of Korea will move markets, but the bottom line is we are seeing a global rising tide of “less dovish” central bank policy, and that’s likely to cause volatility as we move forward throughout the year.

There was no market moving economic data overnight.

Today we get several notable economic reports including (in order of importance): Jobless Claims (E: 450K), Durable Goods (E: 0.7%), Revised Q2 GDP (6.5%), and Pending Home Sales (E: 2.0%).  Bottom line, markets will want to see solid, but not “Too Hot” economic data, and if we get that result the data should help stocks rally today.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on April 19, 2021

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Oil prices gain as traders mull demand cues, supply prospects

There is some chatter about demand concerns “with new lockdown measures being imposed in India and other COVID-19 hotspots around the globe, however…” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Tom Essaye Interviewed with TD Ameritrade on January 5, 2021

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Tom Essaye intereviewed with Ben Lichtenstein from TD Ameritrade, discussing the recent oil rally, solar sector, Goldman Sachs and more. Click here to watch the full interview.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on December 11, 2020

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Overall, the fundamental backdrop for the oil market is “mixed with ominous coronavirus trends being offset by vaccine optimism, while faltering economic growth…” said analysts in the latest Sevens Report Research newsletter. Click here to read the full article.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on November 5, 2020

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On balance, the supply data Wednesday were “bullish for energy as oil stockpiles and production fell while…” analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.

Sevens Report Co-editor Tyler Richey Quoted in MarketWatch on July 23, 2020

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“Oil has shown resilience this week” with WTI prices just shy of multi-month highs thanks, in part, to “optimism that a COVID-19 vaccine will eventually help the global economy normalize…” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on June 15, 2020

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“Looking ahead, we expect some consolidation in oil prices here as economic data has been largely better than feared, while the future remains very uncertain regarding the prospects of a ‘second wave’ that could cripple the energy supply…” said Tyler Richey, co-editor at Sevens Report Research.

Oil Pipe line