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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

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“It’s Pretty Much Economics 101”

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It’s pretty much Economics 101: Tom Essaye Quoted in Forbes

Bitcoin Halving: Here’s Why Some Expect Prices To Soar

Bitcoin rose 8,069% in the 12 months after the 2012 halving, 284% following the 2016 halving and 559% after the 2020 halving.“It’s pretty much Economics 101” that bitcoin prices go up after halving, according to Sevens Report analyst Tom Essaye, who explained that so long as demand doesn’t decrease and new supply goes down, the “only thing left to move is price.”

Also, click here to view the full Forbes article published on April 17th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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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A Return to Reasonable Valuations? April MMT Chart

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A Return to Reasonable Valuations? April MMT Chart: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • A Return to Reasonable Valuations? April MMT Chart
  • Dip-Buying Becomes Riskier in Late-Cycle Environments
  • Housings Starts Plunge in March – Chart

Futures are higher this morning as the geopolitical situation in the Middle East is tense but stable, inflation data was largely as-expected, and good consumer-focused earnings are helping offset soft sales from chip-maker ASML.

Economically, EU Core CPI met estimates at 2.9% while the U.K.’s Core CPI figure was “warm” at 4.2% vs. (E) 4.1% but neither report is materially impacting the general “higher for longer” central bank policy stance in place right now.

There are no notable economic reports today and just two late-day Fed speakers: Mester (5:30 p.m. ET), Bowman (7:15 p.m. ET).

That will leave trader focus on the Treasury’s 20-Yr Bond auction at 1:00 p.m. ET as weak demand would add upward pressure on yields and pressure stocks.

Additionally, earnings season continues with TRV ($4.75), CFG ($0.75), CSX ($0.45), and DFS ($2.98) reporting today, however, none of those names should have a significant impact on the broader market unless there is a glaring disappointment or upside surprise.

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How Bad Was Last Week for the Rally?

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How Bad Was Last Week for the Rally? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Initial Thoughts on the Iranian Strikes on Israel
  • How Bad Was Last Week for the Rally
  • Weekly Economic Cheat Sheet – Growth Metrics in Focus

Stock futures are rebounding modestly from Friday’s steep selloff as geopolitical developments from the weekend were not as bad as feared leaving focus on the start to Q1 earnings season and key economic data this week.

Geopolitically, Iran attacked Israel with a series of well-telegraphed drone and missile strikes over the weekend, but most were intercepted. There were limited casualties and little damage so the situation is seen as “contained” for now, however, a retaliatory strike by Israel would be a negative development for risk assets.

Looking into today’s session, there are two important investment bank earnings reports due out ahead of the bell: GS ($8.54) and SCHW ($0.73). following Friday’s disappointing results from other major banks including JPM, investors will want to see good numbers.

Economically, we get several important data points today including the Empire State Manufacturing Index (E: -5.1), Retail Sales (E: 0.4%), and the Housing Market Index (E: 51). Data needs to come in Goldilocks, especially, Retail Sales as the last two reports missed estimates and have raised concerns about the health of the consumer. Otherwise selling pressure is likely to pick up again today.

Finally, there are two Fed officials speaking today: Williams (8:30 a.m. ET) and Daly (8:00 p.m. ET). Any less hawkish tone will be welcomed while “higher for longer” commentary will be negative for stocks and bonds (yields higher).

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Understanding Why the Decline in Inflation Has Stalled

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Understanding Why the Decline in Inflation Has Stalled: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Understanding Why the Decline in Inflation Has Stalled

Futures are slightly lower following more disappointing Chinese economic data and as geo-political concerns rise.

Chinese exports fell –7.5% vs. (E) -1.9% underscoring that growth remains a major concern in the Chinese economy.

Oil and gold are sharply higher on a WSJ article stating Iran could directly retaliate against Israel this weekend (a direct attack on Israel by Iran would be a substantial escalation).

Today there is one notable economic report, Consumer Sentiment (E: 79.0), but barring major surprise that shouldn’t move markets.    Instead, focus will be on Fed Speak and earnings.

Starting with the Fed, we have several speakers today including Schmid (1:00 p.m.), Bostic (2:30 p.m.) and Daly (3:30 p.m.) and if they echo Thursday’s commentary that rate cuts aren’t coming soon, expect mild pressure on stocks.

On earnings, today is the start of the Q1 earnings season and several big banks report including: JPM ($4.18), BLK ($4.92), WFC ($1.09) and C ($1.29).  Focus will be on the results and on consumer commentary and the stronger the commentary, the more of a tailwind earnings will provide to stocks.

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What Does the Hot CPI Report Mean for Markets

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What Does the Hot CPI Report Mean for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Does the Hot CPI Report Mean for Markets?
  • EIA Analysis and Oil Market Update

Futures are modestly lower and extending yesterdays’ declines ahead of more inflation readings and following disappointing Chinese economic data.

China’s CPI rose less than expected (0.1% vs. (E) 0.5%) and in China that’s a negative as deflation remains a major risk in that slow-growth economy.

Geopolitically, U.S. officials have warned about an imminent Iranian retaliation against Israel either directly or via proxy groups.

Today will be another busy day of events and following the hot CPI, today’s PPI (E: 0.3% m/m, 2.3% y/y) will be in focus. If it rises more than expected, look for higher yields and lower stock prices.  Conversely, if PPI is lower than expected it should deliver a bit of relief and potentially cause a bounce in stocks (and decline in yields).  Other notable events today include the ECB Rate Decision (E: No Change) and Jobless Claims (E: 215k).

Finally, there three Fed speakers today:  Williams (8:45 a.m.), Barkin (10:00 a.m.), Bostic (1:30 p.m.).  If they push back on rate cut hopes following yesterday’s CPI expect more pressure on stocks and if they are partially dismissive of it, expect a rebound.

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The Fed is going to cut at some point—but nobody knows when

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The Fed is going to cut at some point—but nobody knows when: Tom Essaye Quoted in Barron’s

Dow Drops 300 Points as Indexes Turn Down

Traders were looking ahead to Wednesday’s consumer price index. Sevens Report Research’s Tom Essaye says traders seem to be biding their time, making sure their risk tolerance is appropriate heading into the 8:30 a.m. CPI release, especially with not much in the way of economic data or earnings in the meantime.

“We’re at this point where we all know the Fed is going to cut at some point—but nobody knows when—and it’s all going to be up to the data,” he says. “And there’s really not a lot else to focus on. So we’re all just sort of lurched from one data point to the other in this market right now. This is the way it gets when you get to long drawn out transitions in policy.”

Also, click here to view the full Barron’s article published on April 9th, 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.

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Investors are on edge that the Fed may delay rate cuts

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Investors are on edge that the Fed may delay rate cuts: Tom Essaye Quoted in Forbes

Jobs Report: Unemployment Hits 3.8% As Job Growth Pops

How the jobs report impacts market expectations for an eagerly anticipated cut to interest rates, a move which would stimulate economic growth and which is currently priced in to come in June. “Investors are on edge [that] the Fed may delay rate cuts from June until later in the summer (or late in 2024) if we get another hot employment report,” Sevens Report founder Tom Essaye explained ahead of the release.

Also, click here to view the full Forbes article published on April 5th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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.

Investors are on edge the Fed may delay rate cuts

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Investors are on edge the Fed may delay rate cuts: Sevens Report Founder, Tom Essaye, Quoted in MarketWatch

A ‘too hot’ jobs report poses biggest risk to stock-market rally: strategist

The setup for the stock market heading into the release of the Labor Department’s April employment report at 8:30 a.m. Eastern time is a bit out of the ordinary, Tom Essaye, founder of Sevens Report Research, said in a Thursday note.

While either a “too hot” or “too cold” jobs figure is often sufficient to spark a market selloff, the biggest danger on Friday is firmly tilted toward a stronger-than-expected reading, he said.

“Investors are on edge the Fed may delay rate cuts from June until later in the summer (or late in 2024) if we get another hot employment report,” Essaye wrote. “If that occurs, expect a partial repeat of Tuesday,” when the Dow Jones Industrial Average fell nearly 400 points, or 1%, for its worst performance since March 5, while the S&P 500 lost 0.7% and the Nasdaq Composite declined 1%.

Also, click here to view the full MarketWatch article published on April 4th, 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.