Tom Essaye, founder of Sevens Report Research, said Friday there are at least three warning signs that the rally could be yet another bull trap for investors. Market expectations for Fed rate hikes are now showing a 56% probability of a June rate hike, up from basically 0% just four weeks ago!” he said. Click here to read the full article.
The “primary risk to oil prices remains to the downside as recession warnings from the Treasury market point to a potential collapse in consumer demand in the coming months or quarters,” analysts at Sevens Report Research wrote. Click here to read the full article.
The U.S. Energy Information Administration data so far this year has been “consistently bearish and pointed to sluggish consumer demand, hesitant refining activity, sizeable builds in oil stockpiles and incrementally rising domestic oil production,” analysts at Sevens Report Research wrote in Thursday’s newsletter. Click here to read the full article.
The release plans were part of a congressional-mandate related to annual budgets that has been in place for almost a decade, Tyler Richey, co-editor of Sevens Report Research, told MarketWatch. But “when traders see an SPR release headline cross the wires, they think ‘more supply on the market’ and hit the sell button first and ask questions later.” Click here to read the full article.
Markets should be poised for a higher open, as they want to see claims begin to rise over the coming weeks, otherwise it’ll imply the labor market remains much, much too tight, Tom Essaye, founder of Sevens Report Research, said. Click here to read the full article.
The data, however, also showed “some evidence of improving consumer demand for refined products,” said Tyler Richey, co-editor of Sevens Report Research, with the four-week moving average of gasoline supplied up by just over 200,000 barrels a day to 8.3 million barrels a day. Click here to read the full article.
Tom Essaye, founder and president of Sevens Report Research and Andrew McCreath, founder at Forge First Asset Management, join BNN Bloomberg to discuss the latest large-cap earnings reports. Essaye says that Uber’s strength this season is a signal that life is getting back to normal and discusses how diversification will be imperative for companies to succeed amid the growth slowdown. Click here to watch the full interview.
“The spike in the 2-year yield tells us the market is now believing the Fed when it has been saying it’s going to raise rates close to or above 5%, notably, it wasn’t Powell’s commentary that got the market to believe that — it was the economic data from Friday, notably the jobs report and ISM Services PMI,” Essaye said, the founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are little changed following a mostly quiet weekend of news as markets look ahead to tomorrow’s CPI report.
The only notable economic report overnight was better than expected growth and inflation updates from the European Commission, who now sees EU growth rising 0.9% this year (up from 0.3%) and inflation at 5.6% (down from the previous 6.1%). These revised estimates are helping to bolster the “No Landing” economic scenario.
Markets should mostly be in a holding pattern today as the CPI report looms tomorrow morning, but there are two notable events on the calendar to watch: New York Fed Inflation Expectations (One Year: 5.0%, Five-Year: 2.4%) and one Fed speaker: Bowman (8:00 a.m. ET). If inflation expectations are higher than before or Bowman is hawkish, that could mildly pressure stocks.
What’s in Today’s Report:
Futures are modestly weaker following a rally in oil prices and a continued rise in bond yields overnight.
Oil rallied 2% after Russia announced it was voluntarily reducing output by 500k bpd while OPEC+ did not signal any intention to increase output to offset the reduction.
Global bond yields moved higher after Nikkei reported Kazuo Ueda will become the next BOJ governor, and not the ultra-dove Masayoshi Amamiya (who was expected).
Today focus will remain on the data and specifically University of Michigan Consumer Sentiment (E: 65.0) and the inflation expectations in the report (any further decline will be positive for stocks). We also get two Fed speakers: Waller (12:30 p.m. ET) and Harker (4:00 p.m. ET) and markets will want to see if they echo the hawkish tone from regional Fed presidents this week.