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Making Sense of Liquidity, Volatility and the S&P 500

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What’s in Today’s Report:

  • Making Sense of Liquidity, Volatility and the S&P 500

Futures are moderately higher as markets try to bounce following a decent night of earnings.

AMZN (down –7% pre-market) earnings underwhelmed but most of the other reports overnight were solid, prompting traders to buy the dip overnight.

Economically, German Industrial Production missed estimates, falling –1.9% vs. (E) -0.3%.

The jobs report scheduled today has been delayed till Wednesday thanks to the government shutdown, so the economic calendar today only contains Consumer Sentiment (E: 55.5), Consumer Credit (E: $8.4B) and one Fed speaker, Jefferson (12:00 p.m. ET).  Barring any major surprises, none of those events should move markets.

So, the performance of tech is likely to determine if this early bounce in the broader market can hold.  If tech stocks (especially software stocks) can hold early gains and add to them, then we could see a solid bounce across markets.  However, if they roll over shortly after the open, brace for another potentially ugly day.

 

Sevens Report Warns Early-2026 Inflation Signals Are Flashing Red – Business Insider

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Tom Essaye says sector leadership and market rotation echo the painful setup of 2022.

The stock market is flashing a signal that inflation may be poised to spike

Early market action in 2026 is sending a cautionary signal on inflation, according to Tom Essaye of Sevens Report Research, who says investors may be underestimating the risk of a difficult year ahead.

Essaye notes that energy and materials stocks have surged more than 9% year to date, dramatically outperforming the S&P 500’s modest gain. Historically, strength in these sectors has often preceded broader inflation pressures, as higher energy and materials costs filter through supply chains and lift prices across the economy.

In Essaye’s view, the move is especially notable because it has received little attention from market participants so far. He argues that energy prices influence nearly every component of global commerce, while materials costs quietly add upward pressure to inflation through higher input expenses. Together, their strong performance is not something investors should dismiss as the first quarter unfolds.

Adding to the concern is a clear shift in market leadership. Essaye highlights a rotation away from mega-cap growth stocks and toward value, small caps, transportation stocks, and equal-weight indexes. Recent outperformance in benchmarks like the S&P 500 equal-weight index, the Russell 2000, and value-focused ETFs suggests that capital is moving toward areas that often lead during more inflationary or unstable periods.

That combination of sector leadership and early-year money flows reminds Essaye of the setup in early 2022, a year that proved especially damaging for traditional 60/40 stock-and-bond portfolios. While he is not calling for an immediate downturn, Essaye cautions that these dynamics raise the risk of a repeat scenario if inflation pressures continue to build.

Also, click here to view the full article published in Business Insider on January 24th, 2026. 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.

Sevens Report: Why Rising Yields Drove the S&P 500’s Worst Day Since October

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Sevens Report: Why Rising Yields Drove the S&P 500’s Worst Day Since October

S&P 500 has its worst day since October. Here’s why stocks were down.

The benchmark 10-year Treasury yield spiked to 4.293%, but “it’s not really a problem until 4.50% and higher,” said Tom Essaye, founder of the Sevens Report on the markets. “If yields keep rising, that will become an increasing headwind on markets and the economy.”

“The Goldilocks economic data continued last week, and that has been an important foundational positive and somewhat calming influence on markets amidst the recent headline chaos,” Essaye said. “As long as economic data stays this Goldilocks, the chances of a protracted decline in stocks will remain low.”

Also, click here to view the full article published in USAToday.com on January 20th, 2026. 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.

Sevens Report Puts S&P 500’s Powerful 3-Year Run in Perspective

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Recent gains rank among the strongest three-year returns in market history.

Putting the S&P 500’s strong 3-year return in context

On Wednesday, the S&P 500 wrapped up a three-year stretch that saw it gain about 84%, according to Sevens Report Research.

That places it among the index’s strongest three-year returns in the history of the U.S. stock market, said Tom Essaye, founder and president of Sevens Report Research. To be more precise, this return ranks in the 94th percentile of three-year returns over the past 100 years.

The best three-year return for the S&P 500 during that time occurred from 1995 to 1997 — +125.6% — the second-best occurred between 1933 and 1935 — +124.1% — and the third-best occurred from 1926 to 1928 — +120.4%. In each case, the index was lower five years later.

Also, click here to view the full article published in MarketWatch on January 2nd, 2026. 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.

Putting the S&P 500’s Strong Three-Year Run in Context

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What’s in Today’s Report:

  • Putting the S&P 500’s Strong Three-Year Run in Context
  • The Q4 2025 Sevens Report Quarterly Letter Will Be Delivered Today to Subscribers

Futures are starting the new year with moderate gains following more tariff reductions.

The Trump administration reduced tariffs on several import categories including pasta and furniture as the aggregate tariff burden on the economy declined further.

Economically, EU and UK Flash manufacturing PMIs both missed expectations, falling to 48.8 vs. (E) 49.2 in the EU and 50.6 vs. (E) 51.2 in the UK.

Today focus will be on economic data via the Flash Manufacturing PMI (E: 51.8) and markets will want to see a Goldilocks reading near expectations to start off the new year.  A very weak reading (close to 50) or a very strong number (above 53) would either 1) Slightly increase slowdown worries or 2) Reduce rate cut expectations, both negatives for the markets.

 

S&P 500 Nears Key 50-Day Moving Average After Global Selloff

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Tom Essaye of Sevens Report flags 6,665 as the next critical support level.

As the stock market wobbles, this is the key level to watch for the S&P 500

U.S. stocks remained under pressure in premarket trading Friday as global markets sold off across Europe and Asia. With investors questioning how much further the market could fall, Sevens Report Research founder Tom Essaye pointed to the S&P 500’s 50-day moving average — currently at 6,665.75 — as the next key level to watch.

The index closed at 6,720.32 on Thursday, according to FactSet data. Notably, the S&P 500 hasn’t closed below its 50-day moving average in 132 trading sessions — the longest such streak since February 2007, Dow Jones Market Data reported.

Also, click here to view the full article published in MarketWatch on November 7th, 2025. 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.

S&P 500 Nears Key Technical Level as AI Doubts Pressure Stocks

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Sevens Report’s Tyler Richey says a drop below 6,665 could mark “technical cracks” as AI optimism fades.

Stocks Face ‘Critical Tipping Point’ as Key Thresholds Tested

Doubts about whether billions poured into artificial intelligence will deliver returns — coupled with high stock valuations — sent the S&P 500 Index down to 6,720.32 on Thursday, its lowest level in two weeks. The 50-day moving average at 6,665 is emerging as a crucial support zone, according to Tyler Richey, technical analyst and editor of the Sevens Report. A break below that level could signal “technical cracks,” while a rebound above the 21-day moving average of 6,748.10 would likely restore risk-on momentum, Richey noted.

With government data stalled amid the shutdown and earnings season winding down, traders are leaning more heavily on chart patterns for clues. The S&P 500 has now logged three declines of at least 0.99% in the past six sessions and is down 2.5% from its last record as the Cboe Volatility Index climbs toward 20.

Also, click here to view the full Bloomberg article featured on Yahoo Finance published on Novemer 7th, 2025. 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.

Tom Essaye Interviewed: Stock Market Is Making the Economy Look Better Than It Is

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Essaye warns that market resilience masks underlying economic softness heading into 2026.

The stock market is making the economy ‘look better’ than it is

Sevens Report Research founder, Tom Essaye, joins Opening Bid host Brian Sozzi to discuss the resilience of the stock market and what to keep an eye on heading into 2026.

Also, click here to view the full interview on Yahoo Finance published on November 4th, 2025. 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.

AI Stocks Face Caution as Broader Market Slips, Says Essaye

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Tom Essaye notes recent weakness outside AI but calls the selling “knee-jerk,” not the start of a larger downturn.

Review & Preview: Tech Check

“Essentially the rest of the stock market has been going down for over a week now and the only thing that’s been holding the S&P 500 up are the AI names,” Sevens Report Research’s Tom Essaye told me. “And now we have a very direct series of headlines of caution…on the increases in the AI-related stock prices.”

Still, this might simply be “knee-jerk selling,” according to Essaye.

“I don’t think that this is the start of something much bigger,” Essaye says. “The market seems absolutely fine, still embracing a lot of these AI-related headlines, but I do think that we’re going to get these temporary moments of caution because the whole debate ‘Is AI a bubble or not?’ it’s still incredibly unsettled.”

Also, click here to view the full article published in Barron’s on November 4th, 2025. 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.

Tom Essaye warns that most S&P 500 stocks are lagging as the index hits new highs.

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S&P 500’s Gains Look Deceptive Despite 16% Yearly Rally

SPX: Two Concerning Trends to Watch as Stocks Hit New Highs

The S&P 500 slipped 0.9% last Thursday, a modest pullback given its 16.2% year-to-date gain. But according to Tom Essaye, president of Sevens Report Research, that strength is “more than a little bit deceiving.”

Of the 503 companies in the index, only 144 — or 28.6% — are outperforming, while 227 are down for the year. Essaye noted that this imbalance raises questions about how sustainable the rally really is.

He also highlighted that the NYSE Advance-Decline Line fell to a 12-week low last week, even as the S&P 500 posted 14 record closes since September — a signal that far fewer stocks are moving higher during the rally.

Essaye concluded that while concentrated leadership is normal during long market advances, current extremes suggest risks are building beneath the surface.

Also, click here to view the full article on Moneyshow.com published on November 3rd, 2025. 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.