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The market is mostly in a holding pattern to start the week

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The market is mostly in a holding pattern to start the week: Tom Essaye Quoted in Barron’s

Nasdaq Snaps 2-Day Losing Streak

“The market is mostly in a holding pattern to start the week,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview. “The big numbers come on Thursday, with all these inflation updates.

It is not just in the U.S. with core PCE, but also in Europe. Depending on what happens there will dictate whether or not this market can grind higher.”

Also, click here to view the full Barron’s article published on February 27th, 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

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U.S. Defense Contractors May Benefit From Depletion of Hardware and Munitions

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U.S. Defense Contractors May Benefit From Depletion of Hardware and Munitions: Tom Essaye Quoted in Morningstar

These defense stocks may fare best whether Biden or Trump wins in November

One of the industry groups whose stocks Tom Essaye, publisher of Sevens Report Research, said he would expect to perform well during a second Trump term is defense.

Trump’s return to the White House could benefit these stock-market sectors – while undercutting others

Of course, regardless of who wins the November election, U.S. defense contractors may benefit from the depletion of hardware and munitions resulting from U.S. and other NATO countries’ support for Ukraine’s defense against Russia’s invasion, along with renewed efforts to bolster the conventional defenses of Western European countries.

Also, click here to view the full MarketWatch article published on Morningstar on February 28th, 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.

Money Supply and Stocks: Is There a Disconnect?

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Money Supply and Stocks: Is There a Disconnect? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Money Supply and Stocks: Is There a Disconnect?
  • ISM Services Index Takeaways (Slightly Dovish)

Futures are rebounding with global shares amid positive stimulus news out of China and mostly better-than-feared economic data overseas ahead of several important catalysts today.

Overnight, China’s State Planner and the head of the PBOC both reiterated their commitment to achieving 5% growth in 2024 which is supporting a rebound in risk assets as investors gain confidence in the prospects of a stabilizing Chinese economy.

Eurozone Retail Sales fell -1.0% vs. (E) -1.4% helping ease concerns of a sharp slowdown in the EU economy which is adding to the risk-on money flows this morning.

Looking into the U.S. session, focus will be on economic data early today starting with the: ADP Employment Report (E: +150K job adds) followed by the JOLTS release (E: 8.9 million job openings).

From there attention will turn to Capitol Hill where Fed Chair Powell will begin his semi-annual testimony at 10:00 a.m. ET. The Fed’s Daly (12:00 p.m. ET) and Kashkari (4:15 p.m. ET) will also speak today but Powell will be firmly in the spotlight as investors look for clues as to whether the FOMC plans to begin rate cuts in the second quarter (market positive) or wait until H2’24 (market negative).

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.

Why the Tech Sector Is Like a Modern Day Gold Rush

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Why the Tech Sector Is Like a Modern Day Gold Rush: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why the Tech Sector Is Like a Modern Day Gold Rush
  • Chart: Rising Market-Based Inflation Expectations Bolster Gold Prices

U.S. futures are modestly lower this morning as Chinese economic concerns are offsetting a cool EU inflation print.

A sizeable new wave of Chinese stimulus actions failed to soothe investor worries about the economy overnight, underwhelming investors as China’s Service PMI unexpectedly fell to 52.5 vs. (E) 52.9 in February.

In Europe, financial news flow was better as the EU Composite PMI rose to 49.2 vs. (E) 48.9 while PPI fell a steep -0.9% vs. (E) -0.1% helping to ease some recent worries about a resurgence in price pressures.

Looking into today’s session there are three domestic economic reports to watch: Composite PMI (E: 51.4), Factory Orders (E: -3.0%), and the ISM Services Index (E: 53.0). The ISM print will be the most important as investors will be looking for continued strength in consumer spending but steady or easing price indices to underscore disinflation has not stalled/reversed.

There are no Fed officials scheduled to speak today and with Powell’s testimony looming tomorrow a slow churn in markets or modest continuation lower could play out today as short term traders book profits from the most recent run to record highs.

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.

Is This A Teflon Market? (No. Here’s Why)

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Is This A Teflon Market? (No. Here’s Why): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is This A Teflon Market? (No. Here’s Why)
  • Weekly Market Preview:  Can Data and Fed Speak Extend the Rally?
  • Weekly Economic Cheat Sheet:  All About Employment (Jobs Report Friday among others).

Futures are slightly lower following quiet weekend of news as markets digest Friday’s rally.

Geopolitically, hope is growing for a six-week ceasefire in Gaza that could be announced in the coming days and that’s modestly weighing on oil prices.

The S&P 500 will become even more “AI” sensitive as SMCI  (Super Microcomputer) will in added to the S&P 500, incrementally increasing tech exposure to the index.

This will be a potentially busy week of catalysts but it starts slowly today as there are no economic reports and just one Fed speaker, Harker at 11:00 a.m. ET.  So, absent any surprises, expect yields to drive stocks.  If the 10-year Treasury yield drifts lower, don’t be surprised if stocks recoup these early losses.

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.

How might a second Trump term impact stocks?

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How might a second Trump term impact stocks? Tom Essaye Quoted in Morningstar

A second Trump term may benefit these stock-market sectors most

Therefore, it’s worth asking: How might a second Trump term impact stocks? Tom Essaye, publisher of Sevens Report Research, recently shared his expectations for which corners of the stock market might outperform, and which might struggle, if Trump triumphs in an expected election rematch with President Joe Biden.

“Obviously, those policies would be negative for Chinese shares and emerging markets more broadly, as they would increase trade tensions,” Essaye said.

As a result, investors can expect Chinese stocks, and emerging-markets more broadly, to struggle, like they did during Trump’s first term and like they have, relative to the U.S., for much of the past 15 years.

Also, click here to view the full MarketWatch article published on Morningstar on February 27th, 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.

“It doesn’t mean the economy’s rolling over”

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Tom Essaye Interviewed by Barron’s

Stocks Are in a Holding Pattern. It’s All About Inflation Data.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that recent economic data, including durable goods and retail sales, have come in softer than expected.

“It doesn’t mean the economy’s rolling over,” he says. “But for a market that is priced for zero slowdown whatsoever, that is the risk that I think people need to watch. About the most surprising thing that I feel could happen to this market right now is that growth suddenly slows.”

“They’re behaving for now, but if you start seeing the 10-year climb far above 4.25%, I think that begins to become a headwind on the market,” Essaye says. “Until we get that inflation data, you kind of got markets in a bit of a holding pattern.”

Also, click here to view the full Barron’s article published on February 27th, 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.

This Relentless Rally Has Gone Far Beyond

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This Relentless Rally Has Gone Far Beyond: Tom Essaye Quoted in Barron’s

The Stock Market Hasn’t Been This Hot in Decades. Is the Rally Justified?

“If we look at the facts, I cannot help but feel as though this relentless rally has gone far beyond either actual improvement in the fundamentals and reasonable expectations of continued improvement,” writes Sevens Report Founder and President Tom Essaye.

As Essaye points out, a price-to-earnings ratio around that level was “previously only reserved for periods of quantitative easing and 0% rates, not quantitative tightening and 5.37% fed funds.”

Also, click here to view the full Barron’s article published on February 27th, 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.

What Number Would Make Core PCE Negative for Stocks?

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What Number Would Make Core PCE Negative for Stocks? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Number Would Make Core PCE Negative for Stocks?
  • EIA and Oil Market Analysis

Futures are modestly lower as EU inflation data disappointed overnight while tech earnings underwhelmed.

Economically, French and Spanish CPIs showed on going disinflation but it was slower than expected (mirroring what we’ve seen recently in the U.S.).

On earnings, CRM and SNOW posted underwhelming earnings and that’s modestly weighting on tech shares.

Today focus will be on the Core PCE Price Index (E: 0.4% m/m, 2.8% y/y) as that’s the most important report of the week.  Risk/reward into this number is skewed slightly positive as inflation concerns are already elevated and partially priced in, so it should take a solidly hot number to weigh on markets, while just an “in-line” reading would be welcomed.

Other data notable data today includes Jobless Claims (E: 210K) and Pending Home Sales (E: 0.8%) and we have three Fed speakers, Bostic (10:50 a.m.), Goolsbee (11:00 a.m.) and Mester (1:15 p.m. ET) although barring a major surprise from those reports/speakers, they shouldn’t move markets.

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.

Hard vs. Soft Landing Scoreboard: More Signs of Slowing Growth

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Hard vs. Soft Landing Scoreboard: More Signs of Slowing Growth: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing vs. Soft Landing Scoreboard: Still a Soft Landing But More Signs of Slowing Growth
  • Chart: Consumer Confidence Data Points to Slowing Growth

Futures are lower as traders continue to reposition following last week’s sprint to record highs while focus shifts ahead to tomorrow’s critical inflation data.

Economically, the headline of the Eurozone Economic Sentiment report fell to 95.4 vs. (E) 96.7 which didn’t help risk assets in pre-market trade.

Today, traders will be watching the release of Q4 GDP (E: 3.3%) and International Trade in Goods (E: -$88.1B) ahead of the bell. Any data that is not Goldilocks (or “Platinumlocks”) will likely keep stocks under pressure ahead of tomorrow’s PCE Price Index report.

Later in the day, there are several Fed speakers: Bostic (12:00 p.m. ET), Collins (12:15 p.m. ET), and Williams (12:45 p.m. ET). Bostic and Williams are on the FOMC, so their comments have the potential to move markets with tomorrow’s inflation data coming into view.

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.