Posts

The market is mostly in a holding pattern to start the week

The market is mostly in a holding pattern to start the week: Tom Essaye Quoted in Barron’s


Nasdaq Snaps 2-Day Losing Streak

“The market is mostly in a holding pattern to start the week,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview. “The big numbers come on Thursday, with all these inflation updates.

It is not just in the U.S. with core PCE, but also in Europe. Depending on what happens there will dictate whether or not this market can grind higher.”

Also, click here to view the full Barron’s article published on February 27th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to Rally

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 Number Would Make Core PCE Negative for Stocks?

What Number Would Make Core PCE Negative for Stocks? Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • What Number Would Make Core PCE Negative for Stocks?
  • EIA and Oil Market Analysis

Futures are modestly lower as EU inflation data disappointed overnight while tech earnings underwhelmed.

Economically, French and Spanish CPIs showed on going disinflation but it was slower than expected (mirroring what we’ve seen recently in the U.S.).

On earnings, CRM and SNOW posted underwhelming earnings and that’s modestly weighting on tech shares.

Today focus will be on the Core PCE Price Index (E: 0.4% m/m, 2.8% y/y) as that’s the most important report of the week.  Risk/reward into this number is skewed slightly positive as inflation concerns are already elevated and partially priced in, so it should take a solidly hot number to weigh on markets, while just an “in-line” reading would be welcomed.

Other data notable data today includes Jobless Claims (E: 210K) and Pending Home Sales (E: 0.8%) and we have three Fed speakers, Bostic (10:50 a.m.), Goolsbee (11:00 a.m.) and Mester (1:15 p.m. ET) although barring a major surprise from those reports/speakers, they shouldn’t move markets.


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 Earnings Are Saying

What Earnings Are Saying: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • What Earnings Are Saying About Current Economic Growth

Futures are modestly lower following a night of underwhelming earnings results.

INTC (stock down 10% premarket) gave soft guidance while V and TMUS (stocks down –3% each) posted underwhelming results.

Economically, German GfK Consumer Climate missed expectations (-29.7 vs. (E) -24.5) but that’s not moving markets.

Today focus will be on the Core PCE Price Index (E: 0.2% M/M, 3.0% Y/Y) and this number needs to meet or be lower than expectations to help support the stock rally.  If Core PCE prints solidly above expectations look for higher yields and lower stock prices.  The other notable economic number today is Pending Home Sales (E: 1.3%) but that shouldn’t move markets.

On the earnings front, the key report today is AXP ($2.65) and specifically we’ll be watching for is their commentary on consumer spending (the more positive, the better for markets).  Other notable earnings include CL ($0.85) and NSC ($2.90).


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.

Five Measurable Similarities to 2006/2007

Five Measurable Similarities to 2006/2007: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Five Measurable Similarities to 2006/2007: A Market Cycle Update

Futures are little changed ahead of the holiday weekend as poor Nike (NKE) earnings weigh on sentiment.

Earnings this week haven’t been great and that continued overnight as Nike (NKE) missed on revenues and cut revenue guidance. The stock is down –12% pre-market.

Economically, UK data was mixed as quarterly GDP declined (-0.1% vs. (E) 0.0%) while retail sales were strong.

Otherwise, the focus will remain on economic data and the key report today is the November Core PCE Price Index (E: 0.2% m/m, 3.4% y/y), which is the Fed’s preferred inflation metric.  It is expected to show declines in the pace of headline and core inflation from October and if that happens, it should support stocks and bonds and reinforce rate cut expectations.

Other notable data today includes Durable Goods (E: 2.4%), New Home Sales (E: 690K) and Consumer Sentiment (E: 69.4, 1-Yr inflation: 3.1%). But barring a major surprise from them, they shouldn’t move markets.

Meanwhile the bond market closes at 2:00 p.m. today with the looming holiday weekend. So, we expect activity to quiet considerably in the markets as the trading day goes on.

Finally, from all of us at Sevens Report Research, please have a happy and safe holiday weekend.

Five Measurable Similarities

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.


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.

Sevens Report Research’s Tom Essaye Quoted in Barron’s

One Potential Catalyst That Could Shake Up Markets: Tom Essaye Quoted in Barron’s


Stocks Close Lower, Pausing November Rally

Sevens Report Research’s Tom Essaye told Barron’s it looked like a “wait and see day” ahead of the personal consumption expenditures price index on Thursday, among other data points ahead.

“More times than not, if you’re wondering what’s driving markets right now, it’s usually yields,” Essaye said.

As the end of the year approaches, Essaye thinks it will take a major surprise from the upcoming data releases to send stocks tumbling.

“The bar to get people to heavily sell stocks is pretty high, considering if we can just kind of hold on right for the next five weeks, then we put in the books a pretty good year,” he said.

He said that will change once the calendar flips to 2024, when the market will have to live up to high expectations priced in by traders.

Also, click here to view the full Barron’s article published on November 27th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Sevens Report Research’s

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.

Why Tech Is Driving This Selloff

Why Tech Is Driving This Selloff: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Why Tech Is Driving This Selloff
  • S&P 500 Weekly Chart: Not A Setup You Want To See

Futures are moderately higher on solid tech earnings and optimism there won’t be a government shutdown drama.

On earnings, AMZN and INTC both posted solid numbers (up 6% and 7% after hours respectively). And that’s helping the tech sector and broader market bounce.

Politically, Speaker Johnson publicly supported passing a short term spending bill. This possibly avoids another shutdown drama.

Today focus will be on inflation, namely the Core PCE Price Index (E: 0.3% m/m, 3.7% y/y) and the five-year University of Michigan Inflation Expectations (E: 3.0%).  Lower than expected numbers will remind markets that inflation is falling and depress Treasury yields, and that should extend today’s early rally.  Conversely, if the inflation data is higher than expected, don’t be shocked if these early gains are erased as yields rise.

Why Tech Is Driving This Selloff


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

Market Multiple Table – October Edition

Market Multiple Table – October Edition: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Market Multiple Table – October Edition
  • Why Didn’t a Hot PPI Report Weigh on Markets?

Futures are modestly higher on more reports of global disinflation combined with additional Chinese stimulus.

Japanese PPI rose less than expected (2.0% vs. (E) 2.5%). And, that added to the recent list of inflation data points that imply ongoing global disinflation.

China’s sovereign wealth fund bought shares in the nation’s largest banks, boosting Asian markets.

Today the focus will be on the CPI report and expectations are as follows: Headline CPI:  0.3% m/m, 3.6% y/y, Core CPI: 0.3% m/m, 4.1% y/y.  Bottom line, a CPI Report under expectations should pressure yields and fuel a continued rally in stocks while a hot CPI should lift yields and likely weigh on stocks.

Away from the CPI report we also get Jobless Claims (E: 209K) and have multiple Fed speakers: Bostic & Collins.

Market Multiple Table - October Edition


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

Why Treasury Yields Surged Yesterday (Hint: Inflation)

What’s in Today’s Report:

  • Why Treasury Yields Surged Yesterday (Hint:  inflation)

Futures are flat as markets digest Thursday’s rally and consider multiple reports that a debt ceiling deal is imminent.

Numerous media outlets have reported a two-year debt ceiling deal is imminent, and if that becomes official today we should expect a modest and temporary rally.

AI optimism/euphoria continued overnight with Marvell Technologies (MRVL) rising 18% on strong AI guidance.

Focus today will first be on the debt ceiling, and if a formal deal is announced with should expect a knee jerk rally, although by itself a debt ceiling compromise won’t be a sustainable bullish catalyst.  Outside of the debt ceiling, the key reports today include the Core PCE Price Index (E: 0.3% m/m, 4.6% y/y)  and Durable Goods Orders (E: -1.1%) and investors will want to see stability in both reports to hint at ongoing disinflation and a soft landing.  We also get Consumer Sentiment (E: 58.0) and if inflation expectations rise further in that report, it could become a headwind on stocks.

Tom Essaye Quoted in Blockworks on February 24th, 2023

Risk-Off Is Back: Crypto, Equities Slide on Persistent Inflation

“To be clear, the report won’t be enough to change the Fed’s thinking (this is very old data at this point) nor was it enough to move bonds or currencies, but for a market that’s concerned about stagflation, this report won’t do anything to ease those concerns.” Tom Essaye added. Click here to read the full article.

Four Pillars of the Rally Remain Intact

What’s in Today’s Report:

  • Bottom Line – Four Pillars of the Rally Remain Intact
  • Weekly Economic Cheat Sheet – Flash PMIs and Core PCE in Focus

Stock futures are trading cautiously higher this morning while international equities were mixed overnight as markets attempt to stabilize following last week’s volatile, Fed-induced declines.

News flow was quiet over the weekend as there were no major economic releases or central bank developments however the yield curve remains in focus as several key spreads have flattened to multi-month lows on hawkish policy expectations and a more cautious growth outlook.

There are no notable economic reports and no Fed officials are scheduled to speak today.

The lack of market catalysts will leave investors to continue to digest last week’s Fed developments and closely monitor the bond markets for further clues on expectations for both monetary policy and the state of the economic recovery.