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Why Stocks Dropped (What We’ve Been Worrying About)

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Why Stocks Dropped (What We’ve Been Worrying About): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Stocks Dropped (What We’ve Been Worrying About)
  • Jobs Day (Updated Preview)

Futures are sharply lower and are extending Thursday’s losses following more disappointing tech earnings and as worries about economic growth grow.

Tech earnings disappointed last night as AMZN (down 8%), MCHP (down 5%) and INTC (down 20%, not a typo) all posted disappointing earnings or guidance.

Geo-politically, concerns are rising about a direct Israel/Iran conflict and that’s boosting oil and gold prices.

Today focus will be on the jobs report and expectations are as follows: 180K Job Adds, 4.1% Unemployment Rate and 3.7% y/y Wage Growth.  Given Thursday’s poor economic data and the pop in growth concerns, a slightly better than expected number would be the best-case scenario for stocks and help support the “rest” of the market (tech will be under pressure today regardless because of earnings).  A number substantially below expectations (or a rise in the unemployment rate to 4.2% or higher) will increase growth concerns and further weigh on stocks.

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What the Fed Decision Means for Market (Tailwind, For Now)

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What the Fed Decision Means for Market (Tailwind, For Now): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the FOMC Decision Means For Markets (Tailwind, For Now)
  • EIA Analysis and Oil Market Update

Futures are modestly higher on momentum from Wednesday’s rally and following decent tech earnings overnight.

META and QCOM posted solid earnings and guidance and that’s helping support the tech rebound.

Economically, the Caixin Chinese manufacturing PMI dropped to 49.8 vs. (E) 51.5, offsetting slightly better than expected numbers from the EU and UK.

Today is the busiest day of the week (and really the summer) from a calendar standpoint.  First, we get the ISM Manufacturing PMI (E: 48.8) followed by Jobless Claims (E: 236K) and Unit Labor Costs (E: 1.9%). To keep Wednesday’s rally going, markets will want to see better than expected numbers across the board to reinforce the idea of a still Goldilocks economy.

On earnings, after the close we get results from two of the most important stocks in the market via AMZN (E: $1.03) and AAPL (E: $1.24) and well as INTC (E: $0.10).

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Markets could get a bit ugly given recent tech weakness

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Markets could get a bit ugly given recent tech weakness: Sevens Report Editor, Tom Essaye, Quoted in Bloomberg

Tech Stocks Hit as Microsoft Down 6% in Late Hours: Markets Wrap

“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report.

Also, click here to view the full Bloomberg article published on July 29th, 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.

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We’re staring at big catalysts

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We’re staring at big catalysts: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Tech Stocks Are Sliding Ahead of Key Earnings Reports

“There was not much going on yesterday and there isn’t a ton going on today, either,” Sevens Report Research’s Tom Essaye told Barron’s. “And we’ve had sort of big moves in the market, and we’re staring at big catalysts.”

Reports from Alphabet and Tesla may have lowered the bar for Big Tech, Essaye says. On the flip side, the megacap tech stocks have run up tremendously on high expectations for growth ahead driven by artificial intelligence. That changed in July, when tech stocks started to struggle to keep up as investors rotated from the sector to underperforming small-cap names.

“Investors are kind of more in a ‘show me’ mode now than they have been in a long time with these names,” Essaye says. “They want to see better earnings before they jump back in for fear that this rotation isn’t over.”

Also, click here to view the full Barron’s article published on July 30th, 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.

I don’t think the market is really doubting the whole AI story

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I don’t think the market is really doubting the whole AI story: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Nvidia and Other Chip Stocks Are Leading the Market Lower Ahead of Big Tech Earnings

“I don’t think the market is really doubting the whole AI story at this point,” Sevens Report Research’s Tom Essaye told Barron’s. “But I do think there are extremely high growth expectations. And if those growth expectations disappoint, even a little bit, then you’ll see some punishment. And that’s really what’s been going on in the earnings season.”

Also, click here to view the full Barron’s article published on July 30th, 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.

Technical Levels to Watch Today and Jobs Report Preview

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Technical Levels to Watch Today and Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Technical Levels to Watch in the Wake of the Fed
  • Jobs Report Preview

Futures are solidly higher in pre-market trade with tech and AI-focused names leading after solid AMD earnings (stock up 9%) offset mildly disappointing results from MSFT (stock down 3%) while economic data was solid overnight and investors digest the BOJ’s decision to raise rates to the highest level since 2008.

Today, focus will be on economic data early with the ADP Employment Report (E: 154K), Employment Cost Index (E: 1.0%), and Pending Home Sales (E: 1.1%) all due to be released. Healthy employment and steady wage growth numbers will be critical to see for the soft landing narrative to persist.

From there, focus will turn to the Fed with the FOMC Meeting Announcement at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

Earnings season also continues today with BA (-$1.68) and MA ($3.51) reporting before the open and META ($4.69), QCOM ($2.25), ALL ($0.33), and EBAY ($1.12) all due to release results after the close.

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This week is very important for AI and tech

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This week is very important for AI and tech: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Apple Falls, Microsoft and Other Tech Stocks Rise. Earnings Week Is All About AI.

“This week is very important for AI and tech because MSFT, AAPL, AMZN, and META, all AI darlings, report earnings and if they post disappointing guidance, it will further erode AI enthusiasm and we could see this pullback continue,” Sevens Report’s Tom Essaye wrote on Monday.

Also, click here to view the full Barron’s article published on July 29th, 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.

FOMC Preview

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FOMC Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • FOMC Preview
  • Chart: Stocks Are Trading With an 85% Correlation to 2007

U.S. equity futures are tracking European stocks higher as traders look ahead to the Fed, big-tech earnings, and more important economic data due in the sessions ahead.

Economically, Japan’s Unemployment Rate fell to 2.5% vs. (E) 2.6% while the EU’s GDP Flash rose to 0.6% vs. (E) 0.5%. The reports are not meaningfully moving markets but seem to be easing recession fears to some degree in pre-market trade.

Looking into today’s session, there are two housing market reports due out early: Case-Shiller Home Price Index (E: 7.2%) and the FHFA House Price Index (E: 6.3%) before Consumer Confidence (E: 99.5) and JOLTS (E: 8.0 million) will be released after the opening bell.

The July FOMC meeting begins today so there are no Fed speakers which will likely bring a sense of “Fed paralysis” before tomorrow’s meeting announcement and Powell’s press conference.

That will leave trader focus on earnings with BP ($0.92), PG ($1.37) and PYPL ($0.97) all due to report before the open while AMD ($0.67), MSFT ($2.90), and SBUX ($0.93) will release results after the close.

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Is the Yen Carry Trade Become A Headwind on Markets?

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Is the Yen Carry Trade Become A Headwind on Markets?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is the Yen Carry Trade Become A Headwind on Markets?

Futures are seeing a solid bounce following a mostly quiet night of news as investors look ahead to (hopefully) another good inflation report.

Earnings remained broadly mixed overnight (some good, some bad) but none of the results are impacting markets.

There was no notable economic data or geo-political events overnight.

Today the focus will be on the Core PCE Price Index (E: 0.1% m/m, 2.5% y/y) and if this number is better than expected (or even dead in-line with expectations) that will remind investors that rate cuts are coming soon (September) and that should help extend this early rebound in stocks and bonds.

Earnings roll on although next week is, by far, the most important week of the season.  Reports we’re watching today include:  BMY (E: $1.64), MMM (E: $1.66) and CNC  (E: $2.42).

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None of this pullback includes growth worries

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None of this pullback includes growth worries: Tom Essaye Quoted in MarketWatch

Stock-market drop offers reminder that rate cuts can alarm investors too

So far, “none of this pullback includes growth worries, and that’s what we have to watch for to make this go from a pullback to something worse. I am still concerned about growth (and Dudley’s comments only make me more nervous) but the data over the past week has been ‘OK,” said Tom Essaye, founder of Sevens Report Research, in a note. “That said, we still need to watch growth very closely…”

Also, click here to view the full MarketWatch article published on July 25th, 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.

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.