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The Reason Stocks Dropped Was Because The CPI Report

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The Reason Stocks Dropped Was Because The CPI Report: Tom Essaye Quoted in Blockworks

Bitcoin breaks $52k, outperforms stocks to new 2024 high

After markets digested the CPI print in the US, inflation data from the United Kingdom came in lower than expected, showing prices are holding steadily at 4% higher year-over-year. The more positive inflationary data helped stock futures rise ahead of Wednesday’s open, Tom Essaye, founder of Sevens Report Research said.

It’s important to realize that while the hot CPI was the catalyst for yesterday’s stock and bond market declines, stocks didn’t decline because CPI implied inflation was bouncing back,” Essaye said. “Instead, the reason stocks dropped was because the CPI report was the first data point in 2024 to not confirm these fantastically positive assumptions that have driven this rally.”

Also, click here to view the full Blockwork article published on February 14th, 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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Growth Data Becomes Even More Important

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Growth Data Becomes Even More Important: Tom Essaye Quoted in Barron’s

The Dow Had Its Biggest Drop Since 2023. It Was Almost Worse.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t show an uptick in inflation, it did dial back expectations for a market that’s been pricing in rate cuts sooner rather than later.

Essaye adds that Thursday’s growth data becomes even more important because the bullish thesis is built on a belief the central bank cuts rates and growth stays stable.

He notes recent data is starting to imply a leveling off after months of quick disinflation.

“I think now the focus then turns to growth,” Essaye says. “And if you get, all of a sudden, some disappointing growth numbers, now you’re going to have some stagflation worries, and you’re gonna see this thing unwind, I think, kind of quick.”

Also, click here to view the full Barron’s article published on February 13th, 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 Rally

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.

The Market Had Gotten Ahead Of Itself

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The Market Had Gotten Ahead Of Itself: Tom Essaye Quoted in Barron’s

Stocks Drop as Market Dials Back Fed Rate-Cut Expectations After CPI Data

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t imply that inflation was bouncing back significantly, the market had gotten ahead of itself by pricing in inflation crashing to the Federal Reserve’s 2% target.

“I think this is more symptomatic of a market that’s frankly, gotten ahead of itself on what it expects to happen,” Essaye says. “And we’re having that expectation dialed back now.”

“It’s just one report, but I think it is a little bit of a reminder, and an important one, that what has really fueled this rally since October has been the assumption of Fed rate cuts and falling inflation,” Essaye says. “And while that likely will happen later this year, it may not happen as soon as they expected. And I think that’s what we’re seeing in markets.”

Also, click here to view the full Barron’s article published on February 13th, 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 Rally

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.

Sevens Report Research’s Tom Essaye Quoted In Barron’s

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Sevens Report Research’s Tom Essaye Quoted In Barron’s

Nasdaq Loses Steam as Stocks Give Back Some Earlier Gains

Sevens Report Research’s Tom Essaye told Barron’s that the Federal Reserve Bank of New York released median inflation expectations from its January survey that were unchanged at the one- and five-year ahead horizons. But three-year expectations fell to 2.4% from 2.6%.

“That will make the Fed more confident in cutting rates and amidst an other wise quiet day, that’s what’s driving this market,” Essaye said.

Also, click here to view the full Barron’s article published on February 13th, 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 Rally

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.

Expectations of a “higher-for longer” policy by the Federal Reserve

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Expectations of a “higher-for longer” policy by the Federal Reserve: Tyler Richey Quoted in Morningstar

U.S. oil prices stretch gains into a sixth straight session

Expectations of a “higher-for longer” policy by the Federal Reserve are weighing on the demand outlook and have therefore acted as a headwind for U.S. benchmark oil prices recently, Tyler Richey, co-editor at Sevens Report Research, told MarketWatch.

However, Monday’s New York Fed Consumer Survey data showed a drop from 2.6% to 2.4% in the three-year inflation outlook, which was “received as dovish by the markets and helped support the domestic oil market to start the week,” Richey said.

On Tuesday, focus will shift to the U.S. CPI report, he said. A “hot” print would once again be a “headwind for oil prices, while a favorably ‘cool’ print could send WTI futures beyond $80” a barrel for the first time in 2024.

Also, click here to view the full MarketWatch article published on Morningstar on February 12th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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.

The Burden Of Proof Lies Squarely With The Bears

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Futures Are Slightly Higher: Sevens Report Quoted in Investing.com

Despite the S&P 500 rally, there are a number of risks emerging – Sevens Report

The burden of proof lies squarely with the bears and so far, the economic data and Fed speak hasn’t done enough to disprove any of those four bullish factors,” wrote the firm.

However, Sevens Research said the reality is there are still a number of risks emerging that need to be watched, and amidst 5k euphoria, they think that needs to be pointed out.

“Yes, data has pointed to a sweet spot for growth, inflation and the Fed. But that won’t last forever and there will be bad news for this market, there always is,” they added.

The firm notes that the risks that have quietly grown in the background during the rally are the chances of rate cut disappointment, the growing list of layoffs, commercial real estate, and valuations.

“Bottom line, it’s important to acknowledge that this rally has been driven by actual good news and bullish expectations being reinforced by actual data. At the same time, the risks that kept investors worried in October (and even throughout 2023) haven’t been vanquished—they simply haven’t shown up, yet,” concluded Sevens.

Also, click here to view the full Barron’s article published on February 13th, 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.

The Four Drivers Of This Bull Market

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The Four Drivers Of This Bull Market: Tom Essaye Quoted in SwissInfo.ch

S&P 500 Rally Hits a Wall in Run-Up to CPI Report: Markets Wrap

Last week’s news and data reinforced the four drivers of this bull market: Fed rate cuts by May, solid economic growth, continued disinflation and strong earnings, according to Tom Essaye at the Sevens Report.

“It’s important to acknowledge that this rally has been driven by actual good news and bullish expectations being reinforced by actual data,” Essaye said. “At the same time, the risks that kept investors worried in October (and even throughout 2023) haven’t been vanquished — they simply haven’t shown up yet.”

Also, click here to view the full article published on February 13th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Swissinfoch logo

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.

What is the “Short Vol” Trade and How Is It Impacting Markets?

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What is the “Short Vol” Trade? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What is the “Short Vol” Trade and How Is It Impacting Markets?
  • An Important Trading Range to Watch
  • EIA Analysis:  A Bearish Report for Oil

Futures are slightly higher despite soft economic data and more earning guidance cuts.

UK monthly GDP declined –0.3% and the UK officially entered recession, although that’s also boosting rate cut expectations.

On earnings, both CSCO and DE cut guidance and both stocks are solidly lower pre-market.

Today is a very busy day of economic data and the data will likely determine if stocks extend yesterday’s rebound or give some of it back.

The key reports are, in order of importance:  Retail Sales (E: -0.1%), Jobless Claims (E: 219k), Philly Fed (E: -9.0), Empire Manufacturing Index (E: -12.5) and Industrial Production (E: 0.2%).  For Empire and Philly Fed, the price indices will be closely watched and if they show further substantial gains, expect that to push yields higher on inflation concerns.

There are also two Fed speakers today,  Waller (1:15 p.m. ET) and Bostic (7:00 p.m. ET), and Waller could move markets as he is part of Fed leadership.

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.

Was Yesterday the Start of a Pullback?

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Was Yesterday the Start of a Pullback? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Was Yesterday’s Hot CPI the Start of a Pullback? (Four Issues to Address)
  • VIX Chart Shows Options Trading Amplified Yesterday’s Selloff
  • CPI Takeaways

Stock futures are rebounding back from yesterday’s steep post-CPI selloff thanks to some “cooler” inflation data in the U.K. overnight and better than expected factory data out of Europe. The 10-Yr yield is stable, just below 4.30%.

Economically, the Q4 Eurozone GDP Flash met estimates at a tepid 0.1% y/y but EU Industrial Production jumped 2.6% vs. (E) -0.3% in December easing some ongoing growth worries.

U.K. PPI also favorably declined across the board which is offsetting the nation’s slightly higher than expected CPI data.

Looking into today’s session, there are no notable economic reports but two Fed officials who happen to be scheduled to speak at the open and close: Goolsbee (9:30 a.m. ET), Barr (4:00 p.m. ET).

Goolsbee is notably an FOMC voting member who leans towards the dovish camp and could potentially add support for a relief rally today after yesterday’s sharp decline. VIX futures expiration could also impact money flows in early trade.

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.

European Shares Edged Up On Better Than Feared Retail Sales

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European Shares Edged Up: Tom Essaye Quoted in Barron’s

European Stocks Drift Higher

London’s FTSE 100 gained 0.6%, with the Paris CAC 40 up 0.3%. Frankfurt’s DAX slipped 0.1% into the red, while the pan-European Stoxx 600 rose 0.1%.

“European shares edged up on better than feared Retail Sales and a very strong German Manufacturing Orders Report,” said Tom Essaye, founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on February 6th, 2023. 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 Rally

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.