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Sentiment Update: A Somewhat Shocking Discovery

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What’s in Today’s Report:

  • Sentiment Update: A Somewhat Shocking Discovery
  • February Durable Goods Takeaway
  • EIA Data Takeaways and Oil Update

U.S. futures are lower with most global equity markets this morning as President Trump announced fresh details about automobile tariffs and other new trade policies after the close yesterday, further raising trade war angst.

Economically, Chinese Industrial Profits edged down -0.3% in February, an improvement from January’s -3.3% print, but the report was not enough to offset tariff worries.

Today, market focus will be on economic data early in the day with Final Q4 GDP (E: 2.4%), Jobless Claims (E: 225K), International Trade in Goods (E: $-135.5B), and Pending Home Sales (E: 2.9%) all due to be released.

Additionally, there is one Fed speaker: Barkin (4:30 p.m. ET) and a few more late-season earnings reports due from SNX ($2.91) and LULU ($5.87) that could move markets (but likely will not given the focus on global trade policies right now).

Charles Dow Would Be Selling Stocks Now

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What’s in Today’s Report:

  • Charles Dow Would Officially Be Selling Stocks Now
  • Consumer Confidence Takeaways – Another Survey-Based Whiff of Stagflation

Futures are slightly lower after a mostly quiet night of news as this week’s so-far-solid gains are digested with investors weighing favorable inflation data out of Europe against simmering tariff uncertainties.

Economically, U.K. CPI fell from 3.0% to 2.8% vs. (E) 2.9% in February with Core CPI down from 3.7% to 3.5%.  The “cool” inflation data is helping U.K. markets outperform European peers this morning.

Today, there is one noteworthy and potentially market-moving economic report due out ahead of the open: Durable Goods Orders (E: -1.0%). A “Goldilocks” report that is no worse than expected should help equities maintain WTD gains while a “too hot” or “too cold” print could spark some profit taking given the tentative nature of this week’s advance.

Additionally, there are two Fed speakers today: Kashkari (10:00 a.m. ET) and Musalem (1:10 p.m. ET), as well as a 5-Yr Treasury Note auction at 1:00 p.m. ET. Less-hawkish commentary from the Fed officials and healthy but not urgent demand for the 5-Yr Notes should be well-received by investors today.

Finally, there are a few noteworthy, late-season earnings reports due out today from DLTR ($2.18), CHWY ($3.19), and JEF ($0.88), but none are likely to have a material impact on the broader market.

Hard Landing/Soft Landing Scoreboard

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard
  • Composite PMI Flash Takeaways – Another Whiff of Stagflation

Futures are back to flat after trading lower overnight on profit taking as traders digest the latest trade war headlines and subsequent rally off the 2025 stock market lows.

Economically, Germany’s Ifo Survey was mostly upbeat as the headline Business Climate Index firmed to 86.7 vs. (E) 87.0 and Business Expectations jumped to 87.7 vs. (E) 86.8. The solid data is helping support gains in EU markets.

Looking into today’s session, there are several economic reports due to be released starting with a few housing market releases: Case-Shiller Home Price Index (E: 4.5%), the FHFA House Price Index (E: 0.2%), and New Home Sales (E: 679K).

Then after the open, the most important economic report of the day is due out: Consumer Confidence (E: 94.2) and investors will want to see a less-dismal data set in the survey-based release as the February consumer reports weighed heavily on risk assets.

Additionally, there is one Fed speaker: Williams (9:05 a.m. ET) and a few late-season earnings reports from MKC ($0.64 and GME ($0.09), but neither are likely to move markets today.

 

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What the Fed Decision Means for Markets

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What’s in Today’s Report:

  • What the Fed Decision Means for Markets

Futures are moderately lower as markets digest and give back some of Wednesday’s post-Fed rally, following a generally quiet night of news.

There were no new tariff headlines overnight while economic data (UK Labour Market Report) met expectations.

Today focus will turn back to economic data and there are several notable reports including, in order of importance, Jobless Claims (E: 225K), Philly Fed (E: 11.5), Existing Home Sales (E: 3.95 million) and Leading Indicators (E: -0.2%).  Given rising economic worries, the stronger these reports (especially the first two) the better.

There are also several important earnings reports to watch today including ACN ($2.84), MU ($1.44), NKE ($0.28), FDX ($4.66), PDD ($2.56).  Given recent soft guidance from various companies, the stronger the results and guidance, the better for markets.

FOMC Preview: Clarity on the “Fed Put”

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What’s in Today’s Report:

  • FOMC Meeting Preview – Clarity on the “Fed Put”
  • Retail Sales & Empire State Manufacturing Data Takeaways

Futures are modestly lower as the bounce off of last week’s multi-month lows is being digested while trader-focus is turning to the March FOMC meeting which begins today.

Economically, the March German ZEW Survey saw its headline edge up from -88.5 to -87.6 while the Economic Sentiment component jumped from 26.0 to 51.6 vs. (E) 35. The data was well received and is amplifying already elevated optimism surrounding a looming German parliament vote on a massive spending package (focused on defense spending) that is expected to bolster economic growth.

In the U.S., there are several economic reports to watch today including: Housing Starts (1.383M), Import & Export Prices (E: -0.1% m/m, -0.2% m/m), and Industrial Production (E: 0.2%), however with the Fed decision looming tomorrow, none are expected to meaningfully move markets today.

The only other noteworthy, potential catalysts today are a pair of Treasury auctions, the first for 52-Week Bills at 11:30 a.m. ET and the second for 20-Yr Bonds at 1:00 p.m. ET. Strong demand in the shorter durations bills would be seen as dovish and “market-friendly” while too strong of demand for 20-Yr Bonds could rekindle worries about the economy.

What Makes It Better/What Makes It Worse?

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What’s in Today’s Report:

  • What Makes It Better/What Makes It Worse?
  • Weekly Market Preview:  Is the Fed Put in Play?
  • Weekly Economic Cheat Sheet:  Important Updates on Growth (The Stronger the Data, the Better)

Futures are modestly lower mostly on digestion of Friday’s big rally and following a relatively quiet weekend of news.

On trade, there were no new tariff headlines, threats or social media postings over the weekend and if that lasts it would be a near-term positive for markets.

Economically, the only notable number was the Italian HICP (their CPI) which met expectations, rising 1.7% y/y.

Focus will remain on trade headlines but outside of the tariff drama this is an important week of economic data.  Today focus will be on two reports, Retail Sales (E: 0.7%) and Empire Manufacturing Index (-1.9).  If both numbers are better than expected they will push back on the idea policy chaos is slowing the actual economy (and help stocks).  However, if they’re weaker then expected, look for economic anxiety to grow (and stocks to drop).

What Outperforms in a Policy-Driven Economic Slowdown?

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What’s in Today’s Report:

  • What Outperforms in a Policy-Driven Economic Slowdown?
  • February Consumer Confidence Takeaways
  • Chart – Case-Shiller Home Price Index Highlights Sticky Inflation Pressures

Futures are solidly higher with mega-cap tech leading the early advance amid renewed AI optimism after Chinese AI company DeepSeek reopened access to its core interface model while investors await NVDA earnings after the close (shares up ~2.5% pre-market).

There are a slew of potential market catalysts today starting with one economic report due out shortly after the open: New Home Sales (E: 680K) and two noteworthy Fed officials scheduled to speak: Barkin (8:30 a.m. ET) and Bostic (12:00 p.m. ET).

Additionally, the Treasury will hold a 4-Month Bill auction at 11:30 a.m. ET (important for near-term Fed policy rate expectations) and a 7-Yr Note auction at 1:00 p.m. ET (important to gauge investor concerns about an economic slowdown).

Finally, there are a few notable consumer companies reporting earnings before the open including LOW ($1.83) and TJX ($1.16) but the biggest potential market moving catalyst of the day comes after the close with NVDA earnings ($0.84), as well as two other important tech-related earnings releases from CRM ($2.61) and SNOW ($0.18).

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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Year-end positioning and lackluster trading volumes

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Year-end positioning and lackluster trading volumes: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Trump Is Already Rattling the Stock Market. Buckle Up.

Sevens Report President Tom Essaye believes year-end positioning and lackluster trading volumes—issues that will ease after New Year’s—are the real culprits behind the declines. 

“None of these events are big enough to derail this market, but they are a near-constant reminder of the drama Trump can manufacture (either directly or indirectly) on seemingly mundane functions of the government,” Essaye wrote.

“Altering or reducing the H-1B visa program reflects a further isolationism that investors fear would hurt the U.S. tech industry in the long run,” Essaye wrote. “And while that fear is a bit of a stretch, amidst large tech outperformance and thin volumes into year-end, it’s creating another reason to book profits.”

Also, click here to view the full Barron’s article published on December 31st, 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 RallyIf 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.

 

This Is The Type Of Political Chaos Markets Fear

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This Is The Type Of Political Chaos Markets Fear: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Magnificent 7 Stocks Are Rising to End a Rough Week

Tom Essaye, founder of the Sevens Report, wrote on Friday that stocks weren’t down “because of the shutdown itself, but instead because this is the type of political chaos markets fear in a second Trump term.”

Also, click here to view the full Barron’s article published on December 20th, 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 RallyIf 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.