Posts

Two Potential Sources of Volatility Into Year-End

/in , /by

What’s in Today’s Report:

  • Two Potential Sources of Volatility Into Year-End
  • Oil Update and EIA Analysis

Futures are bouncing from yesterday’s declines thanks to solid earnings and following an otherwise quiet night of news.

Widely held chipmaker Nvidia (NVDA) posted strong earnings after the close and that’s helping to ease some anxiety around chip supplies.

There were no notable economic reports overnight.

Today there are two notable economic reports, Jobless Claims (E: 261K) and the Philadelphia Fed Manufacturing Index (E: 21.4), and given every major economic report this week has been very strong, markets would like to see a solid number but nothing so strong that adds to the narrative that tapering may need to be accelerated.

Regarding the Fed, we have multiple speakers today including: Bostic (7:30 a.m. ET), Williams (9:30 a.m. ET), Evans (2:00 p.m. ET), and Daly (3:30 p.m. ET) although none of them should move markets.

Finally, as we explain in the issue, COVID and the Debt Ceiling are starting to become headwinds on stocks, and the headlines that imply further rising global case counts or lack of progress on the Debt Ceiling could be mild headwinds on stocks.

Why Stocks Dropped Yesterday (It Wasn’t CPI)

/in , /by

What’s in Today’s Report:

  • Why Stocks Dropped Yesterday (It Wasn’t CPI)
  • EIA Analysis and Oil Market Update

Futures are enjoying a mild bounce following Wednesday’s losses as global yields are stable while U.S. bond markets are closed.

10 year Bund and GILT yields are little changed and that, combined with the bond market closure in the U.S., is allowing stocks to rebound.

Economically, British IP missed estimates (-0.4% vs. (E) 0.1%) while monthly GDP slightly beat (0.6% vs. (E) 0.5%).

Today is Veterans Day and as such, the bond markets are closed and there will be no economic reports and no Fed speakers.  So, GILT and Bund yields will partially dictate trading and as long as they don’t rise, stocks can continue this early rebound from yesterday’s losses.

Jobs Report Preview

/in , /by

What’s in Today’s Report:

  • Jobs Report Preview
  • Why the Bank of England Surprise Matters to You
  • OPEC Decision and Oil Market Update

Futures are modestly higher ahead of the jobs report and despite underwhelming European economic data.

German Industrial Production (-1.1% vs. (E) 0.9%) and EU Retail Sales (-0.3% vs. (E) 0.8%) both missed estimates but those reports aren’t moving markets.

House Democrats are expected to pass the bipartisan infrastructure bill later today, while the larger $1.75 trillion stimulus bill remains in negotiations.

Today focus will be on the Jobs Report and expectations are as follows: Job Adds:  400K, UE Rate:   4.7%, Wages: 0.4%/4.8%.  Given the Fed didn’t commit to a $15 billion tapering beyond December, a “Too Hot” number (in either jobs adds or wages) could cause market volatility, but outside of that occurring the jobs report shouldn’t move markets too much.  We also get one Fed Speaker, George at 9:30 a.m. ET.

Sevens Report Analysts Quoted in Market Watch on October 19, 2021

/in , /by

Oil futures finish at multiyear highs as Russia’s offer to boost natural-gas supplies may come with a catch

Bottom line for oil, futures just notched their eighth-consecutive weekly rise and prices are technically…the Sevens Report analysts said. Click here to read the full article.

Tom Essaye Quoted in Yahoo Finance on October 18, 2021

/in , /by

U.S. Stocks Extend Rebound as Oil Pares Back Gains: Markets Wrap

The issues that caused the pullback have quieted over the past two weeks, which has…wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on September 28, 2021

/in , /by

Oil prices pull back after Brent touches $80 a barrel

The “risk-off money flows” that are hitting the U.S. stock market on Tuesday also dragged crude and other…Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on September 27, 2021

/in , /by

Oil prices at a nearly 3-year high as natural-gas futures jump 11%

From a futures market standpoint, bullish energy calls from big banks including Goldman Sachs and major oil traders like…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 September 27, 2021

/in , /by

U.S. oil prices settle at a nearly 3-year high; natural-gas futures up 11%

Both oil and natural gas are expected to continue higher in the months ahead as fundamentals decidedly favor…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

What the Fed Decision Means for Markets

/in , /by

What’s in Today’s Report:

  • What the Fed Decision Means for Markets
  • EIA Analysis and Oil Update

Futures are moderately higher as the rally continued overnight as China injected more liquidity into their economy.

Chinese officials injected another 17 billion yuan into the economy to prevent any liquidity issues, as it’s now clear that Chinese officials won’t allow a disorderly default (and that’s really all global markets care about).

Economic data disappointed as both the EZ and UK flash composite PMIs missed expectations (EZ PMIs fell to 56.1 vs. (E) 58.9 while UK PMI dropped to 54.1 vs. (E) 54.7).

Focus today will be on economic data, specifically the Flash Composite PMI (E: 55.5) and Jobless Claims (E: 309K).  Markets will want to see both numbers confirm what the Philly Fed and Empire survey implied last week, namely that the surge in COVID cases was a temporary and limited headwind on the economy.  If that’s the case the rebound in stocks should continue.

What the ECB’s Surprise Taper Means for Markets

/in , /by

What’s in Today’s Report:

  • What the ECB’s Surprise Taper Means for Markets
  • EIA Analysis and Oil Update

Futures are modestly higher following potentially positive news out of China.

First, on the geopolitical front, Biden and Xi held a call on Thursday night where they discussed avoiding conflict.  Second, Chinese regulators clarified they just slowed video game approvals, not halted them and that’s helping Chinese tech and internet stocks to rally.

On COVID, Biden’s mask mandates are getting a lot of headlines but they won’t have any direct market implications.

Today’s focus will be on PPI (E: 0.6%, 8.3%), which will give us the latest insights into inflation and if the number is materially higher than estimates, it will likely cause some mild volatility.  We also have one Fed speaker, Mester at 9:00 a.m. ET, and markets will look for confirmation that the Fed will start tapering QE this year, but it will be gradual.