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An S&P 500 Priced for Perfection: May MMT Chart

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An S&P 500 Priced for Perfection: May MMT Chart: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • May MMT Chart: An S&P 500 Priced for Perfection
  • Manheim Used Vehicle Value Index Raises Questions About Growth

Futures are flat as disappointing earnings in Asia (Toyota and Nintendo) were largely offset by solid guidance from AB InBev and Siemens Energy in Europe while macroeconomic news wires were relatively quiet.

Economically, exports from Taiwan plunged to 4.3% y/y in April from 18.9% in March due to weak Chinese demand but exports to the U.S. hit a record amid strong AI demand. The soft Chinese demand is a concern, but AI optimism is for now offsetting those worries.

There are no notable economic reports today leaving focus on the Fed speaker circuit with Jefferson (11:00 a.m. ET), Collins (11:45 a.m. ET) and Cook (1:30 p.m. ET) all scheduled to speak.

Additionally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. Yesterday’s 3-Yr Note auction saw decent demand but if today’s longer duration Note auction is soft, that will put upward pressure on yields and weigh on equity markets as this relief rally has begun to lose momentum.

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May MMT Update: Less Bad News Is Not Good

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May MMT Update: Less Bad News Is Not Good: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • May Market Multiple Table Update: Don’t Confuse Less-Bad News for Actual Good News

Futures are little changed this morning as favorable EU economic data and strong bank earnings from UBS and UniCredit offset escalating geopolitical tensions in Gaza.

Geopolitically, Israeli tank units seized a critical Rafah border crossing with Egypt as ceasefire talks reportedly continue, however the market impact is limited this morning with oil futures slightly lower.

Economically, UK’s Construction PMI topped estimates (53.0 vs. E: 51.1) and EU Retail Sales rose 0.8% vs. (E) 0.7% helping ease worries about fading economic growth in Europe.

Looking into today’s session, focus will be on the Fed’s Kashkari who speaks mid-morning (11:30 a.m. ET). The market is looking for more confirmation of sooner-than-later rate hikes in 2024.

Then this afternoon, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET which will be closely watched by bond traders to see how well the larger than expected Q2 bond issuance will be absorbed by the market. A tailing auction that sends yields higher will be negative for stocks.

Finally, there is just one economic report this afternoon: Consumer Credit ($15.5B) and two earnings reports to watch: DIS ($1.11), LYFT ($0.02).

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Was the Fed Decision Positive? (No, Not Really)

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Was the Fed Decision Positive? (No, Not Really): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Was the Fed Decision Positive? (No, Not Really)
  • EIA Analysis and Oil Market Update

Futures are solidly higher following a mostly quiet night of news as markets further digested Fed Chair Powell pushing back on the idea of future rate hikes.

Economic data showed more buoyant inflation globally as Swiss CPI rose 1.4% vs. (E) 1.2% while the Euro Zone Manufacturing PMI met estimates.

Today the focus will remain on economic data as we get two notable economic reports, Jobless Claims (E: 211K) and Unit Labor Costs (E: 3.3%). If both are “hot” (and especially if Unit Labor Costs are high) then expect higher yields and more pressure on stocks ahead of tomorrow’s Jobs Report.

Earnings season is winding down but there’s an important report via AAPL (E: $1.51) after the close, while I’ll also be watching SQ ($0.72), COIN (E: $1.20) and BKNG ($14.03) for any insight into the state of the U.S. consumer.

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There is certainly still a geopolitical fear bid in oil markets

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There is certainly still a geopolitical fear bid in oil markets: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Oil prices score weekly gain, breaking run of back-to-back weekly losses

“There is certainly still a geopolitical fear bid in oil markets here with [West Texas Intermediate crude] prices in the low $80s,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. “Geopolitical worries have eased from their most tense levels seen earlier in April as the escalation in the Middle East between Israel and Iran has receded back to a still unsettling, but notably more stable level.”

Without the simmering geopolitical worries, WTI would likely be in the low-to-mid $70-a-barrel range, “at best,” as consumer demand for gasoline has been sliding in recent weeks, while OPEC+ has made no changes to output policy in some time, he said.

Also, click here to view the full MarketWatch article published on Morningstar on April 26th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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.

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Here We Go Again: Why Bad Data Isn’t Good for Stocks

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Here We Go Again: Why Bad Data Isn’t Good for Stocks: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Here We Go Again: Why Bad Data Isn’t Good for Stocks
  • EIA Analysis and Oil Market Update

Futures are moderately lower following disappointing tech earnings overnight.

META (down 13% pre-open), IBM (down 10% pre-open) and NOW (down 5% pre-open) all posted disappointing results and tech stock weakness is weighing on futures.

Economically there was no notable data overnight.

Today focus will be on economic data and earnings.  From a data standpoint, Advanced Q1 GDP (E: 2.3%) is the key report and markets will want to see a headline that meets (or slightly misses) expectations and price data that’s in-line or lower than estimates (if that occurs, July rate cuts hopes will rise).  Other data today includes Jobless Claims (E: 215K) and Pending Home Sales (E: 1.0%).

On earnings, there is a deluge of reports today, but the key potential market movers include:  MSFT ($2.81), GOOGL ($1.49), INTC ($0.11), AAL (-$0.28), RCL ($1.30), CAT ($5.12), TMUS ($1.89).

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Gasoline supplied, dropped to the lowest level since mid-February

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Gasoline supplied, dropped to the lowest level since mid-February: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Oil prices end lower on weak U.S. gasoline demand

The most notable takeaway from the Energy Information Administration report Wednesday was the weekly implied measure of consumer demand for fuel at the pump, gasoline supplied, which dropped to the lowest level since mid-February, said Tyler Richey, co-editor at Sevens Report Research.

That indicated a “steady and relatively quick pullback” in domestic fuel consumption in recent weeks,” he told MarketWatch.

U.S. gasoline supplied for the week ended April 19 fell by 239,000 barrels a day to 8.4 million bpd.

And that was “not a ‘one-off’ either, as the 4-week moving average of the often volatile gasoline supplied data fell for a third consecutive week to the lowest reading since the week of March 8th,” said Richey. The EIA data showed the four-week average for gasoline supplied, as of last week, down 3.7 million bpd at 8.7 million bpd.

“Those disappointing implied consumer demand figures paired with the smaller than expected gasoline supply draw on the headline poured some cold water on the market…as worries of a persistently tight physical fuel market are beginning to subside,” said Richey.

Also, click here to view the full MarketWatch article published on Morningstar on April 24th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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.

Still “a simmering” geopolitical fear bid in the global oil market

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Still “a simmering” geopolitical fear bid in the global oil market: Sevens Report Founder, Tom Essaye, Quoted in Morningstar

Oil prices remain at more than 3-week low as Iranian crude supply concerns ease

Tom Essaye, founder of the Sevens Report Research, said there is still “a simmering” geopolitical fear bid in the global oil market which is keeping futures above the $80-a-barrel level, and that fear bid will remain in the market until there is some “more formal” ceasefire agreed upon in the Middle East.

Outside geopolitics, higher-for-longer policy rates are a risk to demand down the road, but for now most economic data remains robust and supports the case for futures to sustain prices above $80 in the near term, Essaye said in a Tuesday client note.

Also, click here to view the full MarketWatch article published on Morningstar on April 23rd, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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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Fundamental influences are “conflicted” right now

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Fundamental influences are “conflicted” right now: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Global oil prices fall for fourth straight session, with demand and Middle East risks in focus

Fundamental influences are “conflicted” right now, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

“Higher-for-longer central bank policy expectations, a strengthening dollar, and subsequent worries about the sustainability of economic growth in a high-rate/strong-dollar environment, are acting as headwinds on global oil prices,” he said, while “simmering geopolitical situation between Israel and Iran is simultaneously keeping a fear-bid in the market.”

Also, click here to view the full MarketWatch article published on Morningstar on April 18th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

Lastly, 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.

Higher-for-longer central-bank policy expectations

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Higher-for-longer central-bank policy expectations: Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch

Oil prices end mixed as traders weigh demand prospects, Middle East risks

“Higher-for-longer central-bank policy expectations, a strengthening dollar, and subsequent worries about the sustainability of economic growth in a high-rate/strong-dollar environment, are acting as headwinds on global oil prices,” said Tyler Richey, co-editor at Sevens Report Research. He added that the “simmering geopolitical situation between Israel and Iran is simultaneously keeping a fear-bid in the market.”

Also, click here to view the full MarketWatch article published on April 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.

What Makes The Pullback Worse?

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What Makes The Pullback Worse? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Makes The Pullback Worse?
  • Weekly Market Preview:  Will Earnings and Growth Data Stabilize Stocks?
  • Weekly Economic Cheat Sheet:  Growth focus early in the week, important inflation report on Friday.

Futures are enjoying a modest rebound following a quiet weekend of news and ahead of an important week of earnings (especially in tech).

There are major tech earnings this week (TSLA, META, GOOG, MSFT) and tech stocks are bouncing this morning ahead of those reports.

There was no notable economic or geo-political news over the weekend.

This is a potentially busy week of economic data and earnings but it starts slowly, as today there’s only one economic report,  Chicago Fed National Activity Index (E: 0.05), and that’s unlikely to move markets.

On earnings, the importance of the results increases this week.  Results we’re watching today include:  VZ ($1.12), TFC ($0.78), NUE ($3.62).

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