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Expectation for continued rate cuts this year is an important support

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Expectation for continued rate cuts this year is an important support: Tom Essaye Quoted in MarketWatch Featured on Yahoo Finance

Jobs report and Trump’s trade war hold keys to outlook for stocks

The expectation for continued rate cuts this year is an important support for the bull market, Tom Essaye, founder and president at The Sevens Report Research, wrote in a Thursday note.

Also, click here to view the full MarketWatch article featured on Yahoo Finance published on February 3rd, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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Jobs Report Preview: Why A Goldilocks Report Matters For This Market

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Jobs Report Preview: Why A Goldilocks Report Matters For This Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview:  Why A Goldilocks Report Matters For This Market

Futures are little changed as markets await the next round of news on tariffs while economic data was mixed.

Economically, Euro Zone Retail Sales missed estimates (-0.2% vs. (E) 0.0%) underscoring still tepid EU growth.

On trade, a call between Trump and Xi still hasn’t happened but most expect tariffs to be reduced when it does.

Today will be a busy day in the markets, starting with a major central bank decision as the Bank of England is expected to cut rates 25 bps.

Economically, there are two notable reports today including Jobless Claims (E: 215K) and Unit Labor Costs (E: 3.3%) and as we’ve seen the last two days, slight misses vs. expectations will be positives for stocks and bonds.  On the Fed front, there are two speakers today but they won’t move markets as they both speak after the close (Logan at 5:10 p.m. ET and Waller at 7:30 p.m. ET.

Finally, on earnings, the key report today is AMZN ($1.52) after the bell.

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Earnings and economic growth are still solid

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Earnings and economic growth are still solid: Sevens Report Analysts Quoted in Investing.com

Are tariffs a gamechanger for the S&P 500?

While the tariffs add another headwind for equities, Sevens Report argues that they do not warrant an immediate reduction in equity exposure.

“Earnings and economic growth (the two most important foundational forces for stocks) are still solid,” the analysts wrote. However, they caution that “the factors that push stocks higher are being weakened or eliminated one-by-one,” while downside risks are mounting.

“These tariffs potentially undermine that positive price action from the ‘rest’ of the market and could weigh on other sectors while DeepSeek weighs on tech,” the analysts noted.

“Most still believe this is all a negotiation and that the tariffs won’t be on for long (and that’s still probably right),” the report states. However, with AI uncertainty and elevated valuations already straining investor sentiment, Sevens Report warns that “the recipe is coming together for a solid and extended pullback.”

Also, click here to view the full article published on February 3rd, 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.

Are Tariffs a Negotiating Tool or Real Risk?

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Are Tariffs a Negotiating Tool or Real Risk?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Are Tariffs a Negotiating Tool or Real Risk?
  • Why Are Tariffs Positive for the Dollar?
  • ISM Manufacturing Index Takeaways
  • Chart – A Volatility Warning From the VIX Futures Market

Futures are modestly lower as optimism surrounding strong earnings from data software company, PLTR (+20% pre-market), is being offset by simmering trade war fears.

After the close yesterday, news broke that U.S. tariffs on Canada would be paused like those on Mexico (for one month) which was well received by markets.

However, China retaliated against the U.S. with 10% tariffs overnight and opened an antitrust investigation into GOOGL, rekindling trade war fears which is weighing on global investor sentiment in early trade.

Looking into today’s session, there are two potentially market moving economic reports: Factory Orders (E: -0.6%) and JOLTS (E: 8.0 MM). Investors will be looking for more “Goldilocks” data that supports the case for a soft landing.

There are also, two Fed officials scheduled to speak today: Bostic (11:00 a.m. ET) and Daly (2:00 p.m. ET), and several big name earnings releases due out, including PYPL ($1.13), PEP ($1.95), PFE ($0.48), AMD ($1.09), GOOGL ($2.12), CMG ($0.24).

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Are Tariffs A Bearish Gamechanger? Not Yet.

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Are Tariffs A Bearish Gamechanger? Not Yet.: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Are Tariffs A Bearish Gamechanger?  Not Yet.
  • Weekly Market Preview:  Tar War 2.0 and Key Economic Data (Including Friday’s Jobs Report)
  • Weekly Economic Cheat Sheet:  The “Big Three” Monthly Reports (Highlighted by Friday’s Jobs Report)

Futures are sharply lower (more than 1%) after President Trump made good on threats and placed 25% tariffs on Canada and Mexico in addition to an incremental 10% tariff on China, igniting another round of trade wars.

Economically, EU and UK manufacturing PMIs were slightly better than expected but both still were solidly in contraction territory, reinforcing EU and UK growth concerns.

Today could be a very busy day in the markets.  Obviously trade rhetoric will dominate trading today and to that end, Trump has calls planned today with Canadian PM Trudeau and Mexican President Sheinbaum and obviously those headlines will move markets.  Outside of trade drama, however, we get an important economic report, the ISM Manufacturing PMI (E: 49.5) and markets will want to continue to see Goldilocks readings close that are in-line or slightly weak.

In addition to trade drama and an important economic report, we also have two Fed speakers, Bostic (12:30 p.m. ET) and Musalem (6:30 p.m. ET) and their commentary on future cuts could also move markets.

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Two Sector Rotation Strategies With Proven Outperformance

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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.

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

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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).

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FOMC Preview (Good, Bad, and Ugly Scenarios)

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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.

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

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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

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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.

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