Posts

Why Powell’s Speech Caused a Rally

/in , /by

What’s in Today’s Report:

  • Why Powell’s Speech Caused a Rally
  • Weekly Market Preview:  Will Data Keep the Goldilocks Rally Going?
  • Weekly Economic Cheat Sheet:  Jobs Week (This is the Most Important Jobs Report in Months)

Futures are slightly higher mostly on momentum from Friday’s “dovish Powell” rally, following a quiet weekend.

Fed Chair Powell’s speech on Friday was taken as slightly dovish and that drove the rally in U.S. stocks and it’s carried over globally as we start a new week (all the major foreign markets we monitor are modestly positive).

Economic data was sparse as Euro Zone Economic Sentiment slightly missed expectations (117.5 vs. (E) 118) although that’s not moving markets.

Today there is one economic report, Pending Home Sales (E: 0.3%), but that shouldn’t’ move markets.  Instead, as long as the dual tailwinds of 1) Receding COVID cases in the U.S. and 2) A dovish Fed remain, stocks should be buoyant (although if either idea is contradicted expect some give back of last week’s rally).  Finally, keep in mind this is one of the most popular vacation weeks of the year due to the looming Labor Day weekend, so don’t be surprised by low volumes and some added volatility.

Tom Essaye Quoted in Forbes on August 24, 2021

/in , , /by

S&P 500, Nasdaq Hit New Record Highs As Vaccine Rally Continues—But Here’s What Investors Are Focused On Next

If there’s a reason for the rally, it’s the growing sense that the Fed won’t…market analyst Tom Essaye, author of the Sevens Report, wrote in a Tuesday email. Click here to read the full article.

 

Tom Essaye Quoted in Barron’s on August 23, 2021

/in , /by

Pfizer Climbs, Exxon Jumps — And What Else Is Happening in the Stock Market Monday

Futures are modestly higher on momentum from Friday’s rally and following mixed…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Barron's logo

 

Why Did Stocks Rally?

/in , /by

What’s in Today’s Report:

  • Why Did Stocks Rally?

Futures are modestly higher thanks to continued momentum from Tuesday’s rebound combined with solid earnings reports.

Earnings overnight were good and importantly companies like CMG and UAL said the increase in COVID cases was not hurting business, which helped reassure markets that the Delta variant isn’t changing consumer’s behavior.

There were no economic reports overnight and there are no economic reports later today, so focus will remain on earnings and COVID trends.  If earnings are solid and commentary remains upbeat, and we don’t get any negative COVID headlines, then the rebound can continue today.

Some earnings we’ll be watching today include (in order of importance):  TXN ($1.82), JNJ ($2.28), KO ($0.57), VZ ($1.29), STX ($2.87), LVS (-$0.19), CSX ($0.37), DFS ($3.58).

What the Vaccine News Means for Markets

/in , /by

What’s in Today’s Report:

  • Vaccine Playbook (Specific Sectors and ETFs)
  • What the Vaccine Means for Markets
  • Why Stocks Have Rallied (Four Reasons – Not Just the Election and Vaccine)
  • Weekly Market Preview:  How High Can Stocks Go?
  • Weekly Economic Cheat Sheet:  Jobless Claims the Key Number on Thursday

Futures have exploded to new all-time highs on positive vaccine results from Pfizer, combined with election uncertainty.

Pfizer just released results stating its COVID-19 vaccine is more than 90% effective in preventing COVID-19 infection among people who had not been previously infected.  That 90% is much higher than was expected.

Election clarity had stocks higher pre-vaccine news as Biden was projected to win the Presidency.

Today it’s all about momentum and as stocks should surge led by value, cyclicals and the “Get out and spend” sectors.

Can Gold Continue to Rally?

/in /by

What’s in Today’s Report:

  • Market Multiple Price Chart: S&P 500
  • A Quick Note on Coronavirus Data
  • Can Gold Continue Higher? Yes, Here’s Why

International markets were mixed o/n and U.S. stock futures are little changed in choppy trade as investors continue to look for clarity on infection and death statistics related to COVID-19 while digesting a volatile start to the week.

Economically, Japanese Machine Orders rose 2.3% in Feb. vs. (E) -2.7, underscoring the resilience of the manufacturing sector as the coronavirus outbreak began to accelerate.

There are no economic reports due to be released today but the Treasury will hold a 30-Yr Bond Auction at 1:00 p.m. ET and then the Minutes of the most recent FOMC Meeting will be released at 2:00 p.m. ET.

With investors still primarily focused on any developments regarding the coronavirus pandemic, it is unlikely that those two catalysts will move markets today however if there are any surprises, we could see a reaction as volatility remains elevated amid an uncertain macro backdrop.

What to Make of Yesterday’s Rally

/in /by

What’s in Today’s Report:

  • What to Make of Yesterday’s Rally
  • Jobs Report Preview
  • EIA/Oil Update (Will An OPEC Production Cut Help?)

Futures are sharply lower and they are giving back more than half of yesterday’s rally as coronavirus continues to spread throughout the U.S.  Clearly some of this morning’s decline is just normal give back from yesterday’s explosive rally, although economic fears are continuing to mount as the number of cancelled events, gatherings and conferences continues to rise.

There are now 160 coronavirus cases in the U.S. as California declared a state of emergency while another cruise ship is being held at sea due to fears of an outbreak.  But, the news wasn’t all bad as there were just 160 new coronavirus cases in China, and evidence continues to mount that Chinese officials are getting the spread of the disease under control.

Economically, there were no notable reports overnight.

Coronavirus headlines will continue to drive trading, and broadly speaking anyreports of U.S. or global economic stimulus will be a tailwind on stocks, while any reports of an acceleration of the spread will obviously be a headwind.

Outside of coronavirus, there is just one economic report, Jobless Claims (E: 215K), but we’ll be watching this closely because it’s the best real time indicator of the labor market we have.  If claims rise (say above 230k) that will fan fears of an economic fallout from coronavirus.  Outside of the jobs report we also get multiple Fed speakers (Kaplan (6:30 p.m. ET), Kashkari (8:00 p.m. ET) and Williams (E: 8:45 p.m. ET)) but none of them should move markets.

Tom Essaye Quoted in CNBC on January 18, 2020

/in /by

“People are getting too optimistic in the short-term. We keep pricing in all this really good stuff that’s going to happen, but it has not shown up yet…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.

Stock traders

The Two Pillars Supporting Stocks

/in /by

What’s in Today’s Report:

  • Staying Focused on the Two Causes of the Rally

U.S. stock futures and European shares are tracking Asian markets lower amid rising concerns about the outbreak of a newly discovered virus in China.

Chinese health officials have confirmed that the recently named “coronavirus” can be spread by human-to-human contact.

And with the Lunar New Year holiday beginning this week, fears of a SARS-like health epidemic are on the rise which saw the Shanghai Composite fall 1.41% overnight.

Looking into today’s session, there are no notable economic reports due to be released and no Fed officials are scheduled to speak.

That will leave investors largely focused on Q4 earnings season with HAL ($0.29) reporting before the bell and NFLX ($0.50), AMTD ($0.76), UAL ($2.64), and COF ($2.38) all releasing results after the close.

Tom Essaye Quoted in MarketWatch on January 6, 2020

/in /by

Tom Essaye, president of the Sevens Report, said in a Monday note to clients that the near 10% rally the S&P 500 pulled off in the fourth quarter of last year was driven by the idea that “the U.S.-China trade truce combined with global central bank easing (and specifically the Fed being very dovish) will result in a rebound in global growth…” Click here to read the full article.