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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.

 

It’s Not Too Late to Send Clients A Quarterly Letter!

If you are behind, please let us help!  Our Q1 ’23 Quarterly Letter was delivered to subscribers last Monday along with compliance backup and citations, and we’re continuing to hear from advisors how happy they are with the quality of the letter and how much time and work it’s saved them.  We also have not had one compliance rejection! 

You can view our Q4 ‘22 Quarterly Letter here.

To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

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.

What Drove the Q1 Rally

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What’s in Today’s Report:

  • What Drove the Q1 Rally?
  • Weekly Market Preview:  Does A Soft Landing Become More Likely?
  • Weekly Economic Cheat Sheet:  ISM Manufacturing today, Jobs Report Friday.

Futures are little changed as oil prices are higher following a surprise OPEC+ production cut, while investors digest the recent rally.

OPEC+ announced a surprise production cut of 1.16 million bpd and oil rallied as much as 8% on the news, although it has backed off those highs (up about 5% currently).

Economically, the EU and UK manufacturing PMIs were generally in line with expectations and aren’t moving markets (47.3 for the EU and 47.9 for the UK).

Today focus will be on the ISM Manufacturing PMI (E: 47.5) and oil prices, and a continued steep rise in either (so a hotter than expected PMI or oil moving sharply higher from current levels) will be a headwind on stocks.

 

Sevens Report Quarterly Letter Delivered Today

Our Q1 ’23 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

  • Save time (an average of 4-6 hours per quarterly letter)
  • Show you’re on top of markets with impressive, compelling market analysis

You can view our Q4 ’22 Quarterly Letter here

To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

Tom Essaye Quoted in Barron’s on March 24th, 2023

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Stocks Gain as Volatile Week Ends

“Bottom line, banks have reemerged as the primary influence on markets in the back half of the week and if the weakness in the sector continues today, stocks will have a very hard time extending yesterday’s modest bounce,” says Tom Essaye, the founder of Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch on March 23rd, 2023

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Oil futures settle lower, with U.S. prices back below $70 a barrel

“The banks are the main driver of oil, and really all risk assets today, as fading confidence in the financial system is reigniting fears that another crisis may be looming after we saw some of the biggest bank failures since 2008 in early March,” said Tyler Richey, co-editor at Sevens Report Research. Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch on March 23rd, 2023

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Oil futures end lower on recession worries

“However, the banks are the main driver of oil, and really all risk assets, as fading confidence in the financial system is reigniting fears that another crisis may be looming, after we saw some of the biggest bank failures since 2008 in early March,” Tyler Richey, co-editor at Sevens Report Research, told MarketWatch. Click here to read the full article.

The Bull Case vs. the Bear Case

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What’s in Today’s Report:

  • The Bull Case vs. the Bear Case
  • Weekly Oil Update and EIA Analysis

Futures are modestly higher and are extending Wednesdays’ gains following better than expected inflation data overnight.

Spanish CPI, which was the first inflation indicator to warn of the stall in disinflation, rose just 3.3% y/y, less than the 3.8% expectation and much lower than the 6% y/y reading last month. That’s offering some initial hope that disinflation has restarted.

Today focus will be on economic data, with Jobless Claims (E: 195K) the key report, although we also get the Final Q4 GDP (E: 2.7%).  There are also two Fed speakers today, including Collins (12:45 p.m. ET) and Barkin (12:45 p.m. ET) and markets will look for additional confirmation that the Fed has finally pivoted.