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Tom Essaye Quoted in Yahoo on March 14th, 2023

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How the Bank Failures Could Impact You Even If It Wasn’t Your Money

Sevens Report analyst Tom Essaye told Forbes the selloff following Silicon Valley Bank’s collapse and a similar collapse by crypto bank Silvergate last week was “undoubtedly an unwelcome reminder” of the 2008 financial crisis. And noted that SVB tried but failed to stay to afloat after the bank was forced to sell a bond portfolio at a $1.8 billion loss because higher interest rates pushed bond prices “far below” where they were when purchased. Click here to read the full article.

Tom Essaye Quoted in Forbes on March 14th, 2023

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‘Head Fake Rally’? Dow Jumps 400 Points On Bank Stocks’ $37 Billion Recovery

Sevens Report analyst Tom Essaye warned in a Tuesday note that the most recent market gains could be little more than a “head fake rally,” explaining that the Federal Reserve’s actions to protect depositors at Silicon Valley Bank and Signature Bank could actually cause inflation to linger even longer. Click here to read the full article.

Tom Essaye Quoted in Yahoo News on March 14th, 2023

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US Stocks Shake Off Market Jitters; Bonds Fall: Markets Wrap

Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter, expects that the data will keep the Fed on track to raise rates 25 basis points next week.

“Given the bank troubles, this report isn’t bad enough to put 50 bps back on the table, but if the Fed wants to maintain credibility on inflation, then this report says they have to hike again next week and not signal they are done,” Essaye wrote. Click here to read the full article.

 

Tom Essaye Quoted in Forbes on March 14th, 2023

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Inflation Fell To 6% In February—But Some Experts Fear Banking Crisis Could Make Prices Worse

“If the bank crisis is limited to just a few banks, then the actions taken on Sunday by the Fed and Treasury will prove inflationary,” says Sevens Report analyst Tom Essaye. “By backstopping the depositors, the government has avoided the lion’s share of economic loss from this crisis,” he says, and the $25 billion Bank Term Funding Program, which offers banks loans of up to one year, will increase the Fed’s balance sheet a time when it’s actively trying to shrink it, further reversing the central bank’s recent policy actions, Essaye explains. Click here to read the full article.

Market Multiple Table Chart

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What’s in Today’s Report:

  • Market Multiple Table Chart
  • Update on Credit Suisse
  • An Important Difference Between Now and 2008

Futures are little changed despite the Swiss National Bank providing Credit Suisse (CS) liquidity, as that news isn’t eliminating general market anxiety.

Credit Suisse is rallying more than 20% pre-open after it was granted a $54 billion credit line from the Swiss National Bank.

Despite the positive CS news, investors remain very nervous and jittery about U.S. regional banks (especially FRC).

Today is an important day as there are numerous potentially market moving events this morning, with the most important being the ECB Decision (E: 50 bps hike). Markets will want to see the ECB “blink” in the face of market turmoil and hike less than 50 bps.  If the ECB sticks to a 50 bps hike, don’t be shocked to see more volatility today.

Economically, the hope that the Fed “blinks” and does not hike 25 bps next week has helped support stock and bond markets this week, so investors will want to see today’s economic data come in soft enough to make no hike more likely next week.  Key reports today are, in order of importance: Philly Fed (E: -15.8), Jobless Claims (E: 205K), Housing Starts (E: 1.315M).

Tom Essaye Quoted on Yahoo on March 13th, 2023

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How the Bank Failures Could Impact You Even If It Wasn’t Your Money

Sevens Report analyst Tom Essaye told Forbes the selloff following Silicon Valley Bank’s collapse — and a similar collapse by crypto bank Silvergate last week — was “undoubtedly an unwelcome reminder” of the 2008 financial crisis. Click here to read the full article.

Tom Essaye Quoted in Forbes on March 10th, 2023

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Biggest Bank Failure Since Great Recession Sparks ‘Overblown’ Fears Of Contagion—But Big Lingering Risks Remain

The broad selloff was “undoubtedly an unwelcome reminder” of the 2008 financial crisis, says Sevens Report analyst Tom Essaye, noting SVB scrambled and ultimately failed to stay afloat after it was forced to sell a bond portfolio at a $1.8 billion loss because higher interest rates pushed bond prices “far below” where they were when purchased. Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch on March 8th, 2023

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Oil marks back-to-back losses after Fed’s Powell sparks selloff

Powell’s comments before the Senate Tuesday “sent the clear message that economic data in the near term will be critical for the decision-making process on the pace of future rate hikes and eventually the terminal rate,” said Tyler Richey, co-editor of Sevens Report Research. Click here to read the full article.

Why Bank Stocks Dropped Sharply Yesterday

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What’s in Today’s Report:

  • What’s Happening with the banks, Silvergate and Silicon Valley Bank

Futures are slightly lower following Thursday’s steep afternoon selloff and as nervous investors look ahead to the jobs report.

Economically  German CPI met expectations (8.7% y/y).

Silicon Valley Bank (SIVB), which is now at the heart of the crypto/VC bank turmoil, fell farther overnight and that stock needs to stabilize for markets to recoup yesterday’s losses.

Today there are two important events to watch.

The first is the jobs report, and expectations are as follows:  E: 215K Job Adds, 3.4% Unemployment Rate, 0.3% m/m/4.7% yoy Wages.  Especially after yesterday’s selloff, markets need a “Just Right” number to reduce rate hike expectations.  Second, markets will be looking for a business update from SIVB about their capital raise and sustainability going forward, and if the bank shored up its finances, that would likely create a solid rally in stocks.

Tom Essaye Quoted in Forbes on March 6th, 2023

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Stocks Poised For Rally—But Don’t Expect It To Last, Noted Morgan Stanley Bear Wilson Says

“Don’t confuse the market’s ability to withstand last year’s headwind with an invincibility towards what could be this year’s headwind” of slumping economic growth, Sevens Report analyst Tom Essaye wrote in a Monday note. Click here to read the full article.