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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.

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The Burden Of Proof Lies Squarely With The Bears

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Futures Are Slightly Higher: Sevens Report Quoted in Investing.com

Despite the S&P 500 rally, there are a number of risks emerging – Sevens Report

The burden of proof lies squarely with the bears and so far, the economic data and Fed speak hasn’t done enough to disprove any of those four bullish factors,” wrote the firm.

However, Sevens Research said the reality is there are still a number of risks emerging that need to be watched, and amidst 5k euphoria, they think that needs to be pointed out.

“Yes, data has pointed to a sweet spot for growth, inflation and the Fed. But that won’t last forever and there will be bad news for this market, there always is,” they added.

The firm notes that the risks that have quietly grown in the background during the rally are the chances of rate cut disappointment, the growing list of layoffs, commercial real estate, and valuations.

“Bottom line, it’s important to acknowledge that this rally has been driven by actual good news and bullish expectations being reinforced by actual data. At the same time, the risks that kept investors worried in October (and even throughout 2023) haven’t been vanquished—they simply haven’t shown up, yet,” concluded Sevens.

Also, click here to view the full Barron’s article published on February 13th, 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.

The Four Drivers Of This Bull Market

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The Four Drivers Of This Bull Market: Tom Essaye Quoted in SwissInfo.ch

S&P 500 Rally Hits a Wall in Run-Up to CPI Report: Markets Wrap

Last week’s news and data reinforced the four drivers of this bull market: Fed rate cuts by May, solid economic growth, continued disinflation and strong earnings, according to Tom Essaye at the Sevens Report.

“It’s important to acknowledge that this rally has been driven by actual good news and bullish expectations being reinforced by actual data,” Essaye said. “At the same time, the risks that kept investors worried in October (and even throughout 2023) haven’t been vanquished — they simply haven’t shown up yet.”

Also, click here to view the full article published on February 13th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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.

Markets Have Priced In The Dovish Pivot

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Markets Have Priced In The Dovish Pivot: Tom Essaye Quoted on BNN Bloomberg

S&P 500 rally flashes signs of fatigue near record

“Markets have priced in the dovish pivot and stocks never discount the same news twice,” said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. “As we start 2024, markets will need to see new, positive catalysts to send the S&P 500 to new all-time highs.”

Also, click here to view the full BNN Bloomberg article published on December 26th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up 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.

Markets Have Aggressively Priced In No Recession Or Slowdown

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Markets Have Aggressively Priced In No Recession Or Slowdown: Sevens Report Analysts Quoted in Investing.com

Dow Jones, Nasdaq, S&P 500 weekly preview: Eyeing record highs

“Markets have aggressively priced in no recession or slowdown, but that’s premature. The economy could easily slow and there are some signals slowing growth is happening,” analysts at Sevens Report said.

Sevens Report analysts: “For this rally to continue, we can’t have economic data suddenly start to miss expectations, because now that the Fed has made its dovish pivot, it can’t help markets if worries about an economic slowdown rise. That’s why we’re watching economic data closely at the start of the year.”

Also, click here to view the full Investing.com article published on December 18th, 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.

Jobs Report Preview

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Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview
  • An Excellent Explanation of the Economic Cycle
  • Oil Update (How Far Could It Fall?)

Futures are little changed despite hawkish commentary from the BOJ and more underwhelming economic data.

BOJ commentary overnight was hawkish and markets now expect a rate hike at the December meeting. And that expectation is pushing global yields slightly higher.

European economic data was again soft as German Industrial Production declined –0.4% vs. (E) 0.5%. This adds to the recent string of soft EU economic reports.

Today focus will remain on economic data and specifically weekly Jobless Claims (E: 222K) and Continuing Claims (1.91 million).  These numbers have been drifting higher lately and Continuing Claims just hit a two-year high.  If we see further upside in these readings today that will add to the growing list of readings that implies the economy is losing momentum and while that may not cause a drop in stocks today, a slowing economy will likely become a headwind in early 2024.

Jobs Report Preview

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

We’ve been contacted by advisor subscribers who wanted to use the remainder of their 2023 pre-tax research budgets to extend their current subscriptions, upgrade to an annual (and get a month free) or add a new product (Alpha, Quarterly Letter, Technicals).

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

November Market Multiple Levels Chart: S&P 500

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November Market Multiple Levels Chart: S&P 500: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • November Market Multiple Levels Chart – S&P 500 (Printable/Sharable PDF)
  • Manheim Used Vehicle Value Index Falls 4% Y/Y – Chart

Stock futures are flat as Treasury yields edge higher following a mostly quiet night of new with Powell’s morning commentary coming in to focus.

Economically, German CPI was unchanged in October at 3.8% y/y, meeting estimates, while Eurozone Retail Sales were not as bad as feared, falling -2.9% vs. (E) -3.2%.

Looking into today’s session, there are no market-moving economic reports in the U.S. today, but the Treasury will hold a 10-Yr Note auction at 1:00 p.m. ET that could move bond markets. And if we see yields begin to creep higher after the auction, that will act as a strengthening headwind for equity markets.

Outside of the Treasury auction, focus will be on Fed speak starting with Powell this morning before Williams, Barr, and Jefferson speak after the lunch hour.

Earnings continue to wind down but there are two notable companies reporting today: DIS ($0.68), LYFT ($0.13).

Bottom line, a lot of the November rally in stocks has been based on a dovish shift in Fed policy expectations and if either the Treasury auction or commentary from Fed officials suggest markets have become too dovish, stocks are likely to give back some of the recent gains.

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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.

Important To Watch The S&P 500 Index’s Support Zone

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there’s no way The Fed Can Get Dovish: Tom Essaye Quoted in MarketWatch on MSN

Fed day is here. Here are important technical levels to watch for stocks, bonds, and VIX

It is important to watch the S&P500 index’s support zone from 4,050 to 4,170, where the index spent most of April and May, according to Tom Essaye, founder and president of Sevens Report Research. 
On the other hand, “if policy makers deliver a dovish message and signal the hiking cycle is indeed ‘over’ then a relief rally could see stocks rise rapidly back towards the October highs,” according to Essaye.
The first important technical resistance level to watch is 4,225, while beyond that, investors should keep an eye on the level of 4,330, where the index saw a mid-October reversal. For the 2023 stock market rally to resume, the S&P 500 has to beat its October high of 4,377, Essaye wrote. 
“There is growing evidence that the VIX may be forming a near-term top as the ‘fear gauge’ did not close at new October highs last week despite the S&P 500 falling to new multi -month lows,” Essaye wrote.

Also, click here to view the full article published by MSN on November 2nd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Index’s Support Zone

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.

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Israel Moved Forces Into Gaza

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Israel Moved Forces Into Gaza: Tom Essaye Quoted in Barron’s

Stocks Bounce Back From Dreadful Week

“Geo-politically, Israel moved forces into Gaza over the weekend but the operation is not as large as feared (yet) and that’s helping to slightly reduce geopolitical anxiety,” writes Sevens Report Research’s Tom Essaye.

Aside from a stacked slate of earnings reports headlined by Apple (ticker: AAPL) this week, traders will be watching developments in the Israel-Hamas war and Wednesday’s interest-rate decision from the Federal Reserve.

Also, click here to view the full Barron’s article by Connor Smith published on October 30th, 2023. 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

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.

Core PCE Reading Was Inline With Expectations

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Core PCE Reading Was Inline With Expectations: Tom Essaye Quoted in Barron’s

S&P 500 Joins Nasdaq in Correction Territory

Sevens Report Research’s Tom Essaye told Barron’s the core PCE reading was inline with expectations but didn’t eliminate the risk of inflation rebounding.

He added that Amazon and Intel’s earnings didn’t outweigh what has been a bad week overall.

“And, while there’s progress in Washington, markets won’t celebrate the Republicans being able to finally elect a speaker, and there’s still the prospect of a government shutdown looming,” Essaye added.

Also, click here to view the full Barron’s article published on October 28th, 2023. 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

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.