The nation’s refineries simply don’t have the ability to absorb those new barrels of oil suddenly hitting the market and therefore, physical refined product markets remain tight and prices are still elevated…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
This would likely spark a move higher in stocks, allowing the relief rally to continue, since waning inflation pressures might allow the Federal Reserve to potentially pause its interest rate hikes later this year…Tom Essaye said. Click here to read the full article.
The widening spread between the 2-year and the 10-year is signaling a very clear recession warning, especially if it reaches 15 basis points…wrote Tom Essaye of The Sevens Report. Click here to read the full article.
Rising recession concerns in the EU…continue to drive the dollar relentlessly higher vs. the euro, pound, and yen…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are modestly lower following more disappointing economic data from Europe and as the dollar again surged to fresh multi-decade highs.
The German ZEW Economic Sentiment Index collapsed, falling to –53.8 vs. (E) -38.0, adding to quickly rising recession worries in the EU.
The bad ZEW reading further weighed on the euro and boosted the dollar, which rose to another 20+ year high.
Today there are no notable economic reports and just one Fed speaker, Barkin at 12:30 p.m. ET. So, like Monday, we’d expect positioning ahead of tomorrow’s CPI report and any potential COVID headlines from China to move markets (and if there’s a path of least resistance today, it’s lower into the CPI print).
The nation’s refineries simply don’t have the ability to absorb those new barrels [of oil] suddenly hitting the market and therefore, physical refined product markets remain tight and prices are still elevated…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
The key for tomorrow’s jobs report is that it furthers the idea that we’ve hit ‘peak hawkishness’ with the Fed and peak inflation…says Tom Essaye, editor of the Sevens Report. Click here to read the full article.
The Energy Information Administration data showed a healthy rebound in gasoline demand, easing some recent concerns about demand destruction in gasoline markets…said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Stock futures are trading modestly lower with EU markets this morning as traders digest yesterday’s gains ahead of today’s June jobs report.
Sadly, former PM of Japan, Shinzo Abe, has died after an assassination attempt at a campaign stop overnight.
Economically, Japanese Household Spending fell -1.9% vs. (E) +1.2% in May, rekindling concerns about the health of global growth.
Looking into today’s session, the focus will be almost entirely on the June Employment Situation report from the BLS (E: Job Adds 270K, Unemployment Rate 3.6%, Wages 5.0% y/y) which is due out at 8:30 a.m. ET. There is also one Fed official speaking this morning: Williams (8:30 a.m. and 11:00 a.m. ET).
Bottom line, the market will want to see jobs data that meets our “Just Right” scenario from our Jobs Report Preview which would suggest we are seeing slowing growth in the labor market, yet not a full-on collapse, and increase hopes we are close to or beyond “peak hawkishness” from the Fed. That would open the door to a continued relief rally, however, a report that is either too strong or overly disappointing could send stock falling sharply today.
While it’s too early to declare the value outperformance ‘over,’ we do think the outperformance of tech recently is notable, because if it continues that will be a strong signal that the market is now looking past future rates hikes towards eventual rate cuts in 2023…said Tom Essaye, founder of Sevens Report Research, in a note Wednesday. Click here to read the full article.
