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Sevens Report – Market Multiple Table Chart

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What’s in Today’s Report:

  • Market Multiple Table Chart
  • What CPI Means for Markets
  • EIA Analysis and Oil Update

Futures are slightly higher following better than expected economic data.

Chinese exports handily beat expectations in March rising 14.8% vs. (E) -7.0%, in what is the latest signal that the global economy remains resilient.

On inflation, German CPI met expectations rising 0.8% m/m and 7.4% y/y, numbers that are still too high in aggregate, but won’t make the ECB incrementally hawkish.

Today focus will remain on inflation and the labor market via PPI (E: 0.0% m/m, 3.0% y/y), Core PPI (E: 0.3% m/m, 3.4% y/y) and Jobless Claims (E: 233k).  PPI is expected to show moderation and importantly PPI is viewed as a quasi-leading indicator to CPI, so if numbers come in under expectations that’ll increase hopes inflation is truly easing.  For jobless claims, the higher the better as it implies normalization in the labor market, something the Fed wants to see before it can pause.

Tom Essaye Quoted in Forbes on April 7th, 2023

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Labor Market Adds 236,000 Jobs In March—Lowest Since 2020—As Economists Worry Recession May Be ‘Underway Now’

The revisions fueled recession concerns that intensified this week, with “every major data point”—including jobless claims, manufacturing activity and construction spending—signaling the economy is slowing down and pushing some experts to worry it may be slowing down too quickly, says Sevens Report founder Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Yahoo Finance on April 6th, 2023

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Why speculative AI stocks like C3.ai and BigBear.ai are seeing monster volatility

“Basically I think there’s some regulation concerns, not so much in the governmental sense yet, but perhaps industry regulations. That’s just injecting some fundamental uncertainty into the whole space, and given the valuations and popularity of the AI names, it’s resulting in some wild gyrations!” Sevens Report Research founder Tom Essaye says. Click here to read the full article.

Tom Essaye Quoted in BNN Bloomberg on April 6th, 2023

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U.S. stocks rise amid hopes for ‘just right’ jobs print

As investors have aggressively priced in rate cuts this year, a “too hot” payrolls number would undermine those expectations, while a “too cold” report would add to concerns about a hard landing, according to Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. Click here to read the full article.
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Analysts at Sevens Report Quoted in MarketWatch on April 6th, 2023

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Oil tallies a third straight weekly gain after OPEC+ production cuts

“Bottom line, the fundamental dynamics of the oil market changed this week with OPEC+’s announced production cut, which they said was geared towards regaining control of the markets and spooking speculators out of the market,” said analysts at Sevens Report Research, in a Thursday note. Click here to read the full article.

Current Market Assumptions (Why Stocks Remain Resilient)

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What’s in Today’s Report:

  • Current Market Assumptions (Why Stocks Remain Resilient)
  • Why Jobless Claims Jumped Last Week
  • Weekly Economic Cheat Sheet:  Inflation is the Key This Week (CPI on Wed, PPI on Thurs)
  • Weekly Market Preview:  Do Stagflation Risks Rise?

Futures are little changed following a mostly quiet weekend of news as investors digest the “Just Right” jobs report and look ahead to CPI on Wednesday and the start of earnings season on Friday.

Friday’s jobs report was “Just Right” with job adds rising 238k vs. (E) 230k and wages gaining 4.2% vs. (E) 4.3% y/y. The report is helping to slightly ease the hard landing worries from last week.

Today should be a mostly quiet day of trading as European markets are closed for the Easter holiday and there are no notable economic reports and just one Fed speaker, Williams at 4:15 p.m. ET, as investors will look ahead to Wednesday’s critical CPI report and the start of bank earnings on Friday.

 

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Tom Essaye Quoted in Forbes on April 3rd, 2023

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Surprise Oil Production Cuts Risk ‘Exacerbating’ Inflation Pressures And Harsher Fed Policy, Experts Warn

The surprise announcement also suggests OPEC+ may be getting more cautious about its outlook for global oil demand given the elevated threat of a potentially deep recession looming, says Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Forbes on March 30th, 2023

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Dow Jumps 200 Points As Lack Of ‘Drama’ Spurs Gains

“To say a lot has transpired in the markets over the past three weeks would be an understatement,” Sevens Report analyst Tom Essaye wrote in a Thursday note to clients. Click here to read the full article.

Tom Essaye Interviewed on BNN Bloomberg

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In a scared market, fundamental valuations don’t matter: Tom Essaye

Tom Essaye, president of Sevens Report Research, joins BNN Bloomberg to discuss what’s going on in the markets. Essaye says that the focuses this week are bank stability and inflation, and that he prefers defensive sectors right now such as consumer staples and healthcare. Click here to watch the full interview.

 

Tom Essaye Quoted in Barron’s on March 29th, 2023

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Markets Pop as Banking Fears Ease, Tech Stocks Rally

“The UBS move is easing some of the angst surrounding the recent turmoil in the banking sector,” wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.