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Tom Essaye, Highlights The Significance of The Job Data

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Significance of The Job Data: Tom Essaye Quoted in Investing.com

Wall Street’s Anticipation: Payrolls Data to Influence Fed’s November Decision?

Amid concerns about how upcoming data may impact interest rates, U.S. equities leaned towards a lower close as the S&P 500 fluctuated above a crucial support point. A potential boost in Friday’s monthly non-farm payrolls could lead to increased yields and a further stock decline.

Tom Essaye, highlighted the significance of the job data, suggesting it could greatly influence the S&P 500’s trajectory. 

Also, click here to view the full Investing.com article published on October 5th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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.

Tomorrow’s Jobs Report

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Tomorrow’s jobs report: Tom Essaye Quoted in BNN Bloomberg

Stock Futures Slide as Bond Yields Keep Rising

“Tomorrow’s jobs report may be the most important one of the year,” according to Tom Essaye, a former Merrill Lynch trader.

If the report is too hot and the yield on the U.S. 10-year bond moves close to 5 percent. “We could easily see the S&P 500 fall through the 200-day moving average and at that point we could see an acceleration of the declines in stocks,” Essaye wrote in his The Sevens Report newsletter.

Also, click here to view the full BNN Bloomberg article published on October 5th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Tomorrow’s Jobs Report

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.

Why Did Stocks Drop Yesterday?

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Why Did Stocks Drop Yesterday? Start a free trial of The Sevens Report.

What’s in Today’s Report:

    • Bottom Line – Why Did Stocks Drop Yesterday?
    • Chart: S&P 500 Tests Key Support
    • Economic Takeaways: Case-Shiller Home Price Index & Consumer Confidence
    • Philadelphia Fed Service PMI Turns Negative, Price Readings Elevated (Stagflation)

    Stock futures are bouncing back modestly and bonds are stable this morning. This is amid improvement in Chinese economic data while data in Europe was less encouraging.

    Economically, Chinese Industrial Profits were down -11.7% y/y in August. But that was up from -15.5% y/y in July suggesting government stimulus efforts may be stabilizing the economy. The property development sector remains a major source of uncertainty.

    Meanwhile, in Europe, Eurozone M3 Money Supply declined more than expected, down -1.3% vs. (E) -1.0%. Which underscores tightening financial conditions in the EU amid aggressive policy measures by the ECB.

    Today, the calendar is fairly light as there is just one economic report to watch this morning: Durable Goods Orders (E: -0.3%) and no Fed officials are scheduled to speak.

    In the afternoon there is a 5-Yr Treasury Note auction at 1:00 p.m.. ET, and as usual, if there is any meaningful move in yields, it could impact equity markets (stable or easing yields would be welcomed by equity bulls, new highs would pressure stocks and other risk assets).

Sevens Report Q3 ’23 Quarterly Letter Coming October 2nd.

The Q3 2023 Quarterly Letter will be delivered to advisor subscribers on Monday, October 2nd.

The S&P 500 just hit the lowest level since March amid concerns about Fed rate hikes, a rebound in inflation and a possible recession.

Now is the perfect time to provide a value-add market update for clients and ensure they have the right expectations heading into the fourth quarter.

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q2 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link. To subscribe please email: info@sevensreport.com.

Why stocks dropped yesterday

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. 

Stocks Pop in Relief Rally

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Stocks Pop in Relief Rally: Tom Essaye Quoted in Barron’s

Stocks Pop in Relief Rally

Sevens Report Research’s Tom Essaye told Barron’s he believes the market is experiencing a form of a relief rally.

He noted a wave of key catalysts for stocks has passed without significant negative surprises. This included the consumer price index on Wednesday and data on producer prices and retail sales on Thursday.

“Specifically for today, the ECB signaling it’s done with rate hikes combined with Goldilocks economic data to boost stocks and it’s just been building throughout the day,” Essaye says. “Essentially, it’s a similar dynamic to what we saw in June and July. Where markets are optimistic on growth (so more confident of a no/soft landing) and we see the ‘rest’ of the market outperform vs. tech.”

Also, click here to view the full Barron’s article published on September 14th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Stocks Pop

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.

Is Soft Economic Data a Reason to Buy Stocks?

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What’s in Today’s Report:

  • An Easing of the Labor Market Is a Good Thing, But Be Careful What You Wish For…
  • Jobless Claims vs. the S&P 500 – An Ominous Chart
  • JOLTS Takeaways
  • Consumer Confidence Shows Measurable Deterioration in Current Family Financial Situations: Chart

Futures are slightly lower this morning as yesterday’s sizeable rally in the S&P 500 is digested ahead of more domestic jobs data while global markets were mixed overnight.

In Asia, PBOC officials met with leaders from the private sector regarding stimulus and development, but so far, government efforts have been underwhelming and Chinese markets ended little changed.

In Europe, some regional German inflation statistics came in hot, buoying government bond yields this morning which could weigh on equities if the trend continues into the U.S. session.

Today, focus will be on economic data early with the ADP Employment Report (E: 200K) and GDP report (E: 2.4%) due out ahead of the bell while Pending Home Sales (E: -0.4%) will be released shortly after the open.

There are no Fed speakers today, so investors will be looking for more evidence that supports a continued pause in the Fed’s rate hiking cycle (or peak rates already being in) and ultimately a soft landing. Anything that contradicts that narrative will be a headwind on equities and other risk assets today.

Sevens Report Analysts Quoted on Investing.com on July 17th, 2023

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Dow Jones, Nasdaq, S&P 500 weekly preview: Big Tech takes the stage

Sevens Report analysts: “At current levels, the S&P 500 has priced in 1) No hard landing, 2) Falling inflation and 3) A Fed that won’t be raising rates much longer (and possibly cutting soon after). That’s basically the best outcome anyone could have hoped for at the start of the year, and that means the gains in stocks are legitimate, but also likely exhausted in the near term and it’ll take something else to push stocks materially higher from here.” Click here to read the full article.

Current Market Glossary (For Clients & Prospects)

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What’s in Today’s Report:

  • Current Market Glossary (For Clients & Prospects)

Futures are slightly lower following a night of disappointing tech earnings.

NFLX, TSLA and TSM all posted disappointing earnings results (stocks down 3% – 6% pre-market) and that’s weighing on Nasdaq and S&P 500 futures.

There was no notable economic data overnight.

Today will be another busy day of data and earnings results.  On the economic front, the two key reports are Weekly Jobless Claims (E: 250k) and Philly Fed (E: -10.0), and as you can guess (and especially at these stretched valuations) markets will want to see more Goldilocks data (so stable claims and Philly and falling prices).  We also get Existing Home Sales (E: 4.23M) but, barring a big miss, that shouldn’t move markets.

Turning to earnings, focus today is on industrials and consumer/healthcare names, and some important results to watch include:  AAL ($1.58), TSM ($1.07), JNJ ($2.61), PM ($1.48), COF ($3.31), CSX ($0.49), and PPG ($2.14).

What Pushes Stocks Higher from Here?

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What’s in Today’s Report:

  • What Pushes Stocks Higher from Here?
  • Weekly Market Preview:  Earnings Take Center Stage
  • Weekly Economic Cheat Sheet:  Growth Data in Focus this Week

Futures are slightly lower following mixed Chinese economic data and a potential further escalation of the Russia/Ukraine war.

Chinese economic data was mixed as GDP and Retail Sales both missed estimates, while Industrial Production beat, and the data will keep markets  wanting more stimulus.

Possibility of further escalation of the Russia/Ukraine war increased after Ukraine claimed responsibility for the destruction of a bridge linking Crimea and Russia.

Today focus will be on the first data point for July, the Empire Manufacturing Index (E: -4.3).  Markets will want to see this number be stronger than expectations and ideally turn positive, furthering the “Golidlocks” market narrative of falling inflation but stable growth.

PPI and Jobless Claims Strengthen the “Goldilocks” Narrative

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What’s in Today’s Report:

  • PPI and Jobless Claims Strengthen the “Goldilocks” Narrative

Futures are little changed following a quiet night of news as markets digest the Wed/Thurs rally and focus turns to the start of the Q2 earnings season.

Economically, there was more evidence of global disinflation (or deflation) as German Wholesale Prices (think their PPI) declined –2.9% y/y vs. (-1.2%) y/y.

Today focus will be on earnings, as we get several major bank earnings results:  JPM ($5.92), C ($1.31), WFC ($1.15), and BLK ($8.47) as well as UNH ($5.92).  These large cap companies usually don’t provide too many surprises in their earnings reports, but markets will want to hear positive commentary on the overall environment to further support this latest rally in stocks.

There are also two notable inflation linked economic reports today, Import & Export Prices (E: -0.2%, -0.4%), Consumer Sentiment (E: 65.0), but barring any major surprises they shouldn’t move markets.

CPI Preview: Good, Bad, and Ugly

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What’s in Today’s Report:

  • CPI Preview – Good, Bad, & Ugly
  • Chart: Is Disinflation Accelerating?

U.S. stock futures are extending this week’s gains ahead of the all-important CPI report this morning following a mostly quiet night of news.

There were no economic reports overnight but the Reserve Bank of New Zealand did notably pause their rate hiking cycle leaving their policy rate unchanged at 5.50% (however this was expected and did not meaningfully move markets).

Looking into today’s session the big catalyst is the CPI report due out before the open. On the headline, CPI is expected to come in at 0.3% m/m and 3.1% y/y while the Core figure is seen rising 0.3% m/m and 5.0% y/y.

From there, focus will turn to Fed speakers with Kashkari speaking shortly after the open (9:45 a.m. ET) and Mester at the close (4:00 p.m. ET).

Finally, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET and the outcome could shed light on the bond market’s outlook for the economy and Fed policy expectations in the wake of the CPI data release, so there is potential this auction moves markets in the early afternoon.