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Mega-cap tech remains king

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Mega-cap tech remains king: Sevens Report Co-Editor, Tyler Richey, Quoted in S&P Global

Magnificent 7 stocks stumble, boosting peak views

All seven stocks were largely rebounding Aug. 6 as “mega-cap tech remains king” within the larger technology sector, said Tyler Richey, a co-editor with Sevens Report Research.

“The relative resilience by the Magnificent Seven suggests that investor demand for tech exposure remains concentrated in those seven mega-cap names … while the rest of the space is seeing some technical cracks emerge as bullish conviction for the rest of tech is starting to fade,” said Richey.

Richey said he expects these mega-cap tech stocks to attempt to revisit their all-time high soon, as these stocks tend to be favored by portfolios looking for long exposure in the market at times of high cyclical risks.

“As long as the market is pricing in gradual rate cuts in the quarters ahead, optimism in support of the soft landing narrative would likely see mega-cap tech continue to lead the market as the Mag-7 names account for a significant amount of the expected S&P 500 earnings growth in the quarters ahead,” Richey said.

Also, click here to view the full article published in S&P Global on August 6th, 2024. 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.

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Market Multiple Table: All About Growth

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Market Multiple Table: All About Growth: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – All About Growth
  • Chart – Semiconductor Stocks Bounce, But Long Term Technicals Deteriorate

Stock futures are tracking global equity markets higher as traders shrug off an earnings miss from AI-proxy SMCI (stock down 14% pre-market) and instead focus on a pullback in the yen and sharp drop in the VIX.

Economically, German Industrial Production rose 1.4% vs. (E) 1.0%, further easing global recession worries.

Today, there is one second-tiered economic report due to be released in the afternoon: Consumer Credit (E: $10.0B) but the data is unlikely to move markets.

There are no Fed officials scheduled to speak today but there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. Auction results that are strong could bolster recession worries while a weak auction could rekindle “higher for longer” policy rate worries.

Finally, earnings season continues to wind down with only a few notable reports today including: DIS ($1.20), CVS ($1.74), LYFT ($0.19).

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The bond market is now signaling a real chance of a greater-than-expected economic slowdown

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The bond market is now signaling a real chance of a greater-than-expected economic slowdown : Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Traders Seek Refuge in Bonds Amid Market Volatility

“The bond market is now signaling a real chance of a greater-than-expected economic slowdown and falling yields are no longer a positive for markets. Going forward, the sooner Treasury yields can stabilize (ideally with the 10 year close to 4%) the better for markets,” wrote Sevens Report’s Tom Essaye in a note.

Also, click here to view the full Barron’s article published on August 5th, 2024. 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 RallyIf 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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What Makes This Stop? (Key Indicators to Watch)

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What Makes This Stop? (Key Indicators to Watch): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Makes This Stop? (Seven Indicators to Watch)
  • Chart – VIX Spikes to Pandemic Highs

There is a sense of stability in global markets this morning as the yen and VIX, two major sources of the recent volatility, are both pulling back amid easing recession fears.

Economically, German Manufacturing Orders rose a solid 3.9% vs. (E) 0.8%, helping to offset EU Retail Sales which fell -0.3% vs. (E) +0.1%.

Today, there is one economic report: International Trade (E: -$72.5B) but the data shouldn’t move markets while there are no Fed officials scheduled to speak.

Looking ahead to mid-day, the Treasury will hold a 52-Week Bill auction at 11:30 a.m. ET and a 3-Yr Note auction at 1:00 p.m. ET. Investors will be watching the auction results closely to gauge Treasury demand, and if the auctions are weak, that could see some of the recession fears from the last few sessions ease further and allow stocks to recover a good portion of the losses.

Finally, earnings season is starting to wind down but there are a few notable companies releasing results today including: UBER (E: $0.31) ahead of the bell and SMCI (E: $8.10) and ABNB (E: $0.92) after the close.

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We started the landing a couple months ago

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We started the landing a couple months ago: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Market Is Finally Paying Attention to Slowing Growth. That Doesn’t Mean We’re Headed for a Recession.

Sevens Report Research’s Tom Essaye argues the latest data doesn’t rule out a soft landing, though some market participants had until recently ruled out a hard landing.

“We started the landing a couple months ago,” Essaye says. “It’s no different than when you’re on an actual plane. Sometimes the plane descends more quickly than other times, but that doesn’t mean that you’re crashing.”

Essaye argues summer jobs numbers are generally volatile, so he doesn’t expect the Fed to start panicking. He also notes other economic metrics like retail sales and durable goods, while slowing, are not showing extreme weakness. On the flip side, he thinks a market that had been oblivious to slowing growth could show signs of weakness in the coming weeks.

“The data was not that bad,” Essaye says. “The fact that the S&P 500 is down two and a half percent is more a function of the market’s complacency toward this risk, rather than it is the risk actually becoming substantially greater.”

Also, click here to view the full Barron’s article published on August 2nd, 2024. 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 RallyIf 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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Helped rekindle a bid in the AI-trade

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Helped rekindle a bid in the AI-trade: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Fed Rate Cut Hopes Aren’t Enough. What’s Moving the Stock Market Now.

“Better-than-expected corporate earnings from domestic chip giant AMD [Advanced Micro Devices] helped rekindle a bid in the AI-trade,” writes Sevens Report’s Tom Essaye. 

Also, click here to view the full Barron’s article published on August 1st, 2024. 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 RallyIf 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 been just fine accepting some “bad” labor data

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Markets have been just fine accepting some “bad” labor data: Tom Essaye Quoted in Blockworks

Fed holds interest rates, US equities and cryptos stay in the green

So far, markets have been just fine accepting some “bad” labor data since it means rate cuts are more likely, but this could change in the near-term, Sevens Report Research founder Tom Essaye said.

“A ‘Too Hot’ number that pushes back against September rate cut expectations is the near-term ‘worst’ outcome for stocks, while a slightly weak number (a bit below expectations) is the ‘best’ short-term outcome for stocks because it implies still-solid economic growth but also clears the Fed to continue to plan to cut rates in September and, most likely, again in December,” Essaye said.

Also, click here to view the full Blockwork article published on July 31st, 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.

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And that’s really what’s been going on in the earnings season

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And that’s really what’s been going on in the earnings season: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Nvidia and Other Chip Stocks Are Leading the Market Lower Ahead of Big Tech Earnings

“I don’t think the market is really doubting the whole AI story at this point,” Sevens Report Research’s Tom Essaye told Barron’s. “But I do think there are extremely high growth expectations. And if those growth expectations disappoint, even a little bit, then you’ll see some punishment. And that’s really what’s been going on in the earnings season.”

Also, click here to view the full Barron’s article published on July 30th, 2024. 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 RallyIf 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 may get a bit ugly

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Markets may get a bit ugly: Sevens Report Editor, Tom Essaye, Quoted in Bloomberg

Israel Strike: The Bloomberg Open, Europe Edition

Markets may “get a bit ugly” if the central bank doesn’t signal a reduction given the recent tech weakness, said Tom Essaye at The Sevens Report.

Also, click here to view the full Bloomberg article published on July 31st, 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.

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The biggest question facing investors today remains ‘Is It Different This Time?

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The biggest question facing investors today remains ‘Is It Different This Time?: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

The Stock Market Doesn’t Look Like the Dot-Com Bubble. It’s Something Worse.

No, that’s not the real worry. The S&P 500 is. It smacks of 2007 all over again. From last July until now, the index has traded with an 85% correlation to July 2006 though July 2007, according to Sevens Report’s Tom Essaye.

Essaye went so far as to describe the resemblance of this market to the 2007 market as “concerning to say the least.” And he touched on the uncertainty that investors are facing.

“The biggest question facing investors today remains ‘Is It Different This Time?’” he wrote

Also, click here to view the full Barron’s article published on July 31st, 2024. 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 RallyIf 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.