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Market Multiple Levels: S&P 500 Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart

U.S. equity futures fell with global stocks overnight amid ongoing stagflation fears but optimism that the House will pass the debt ceiling bill today has helped stocks stabilize.

Economically, the German ZEW Survey slightly missed estimates while the NFIB Small Business Optimism Index was 99.1 vs. (E) 99.5 but neither report is materially moving markets this morning.

Looking into today’s session, there is just one economic report to watch: August JOLTS (E: 11.013M) but it would take a meaningful surprise in the release to impact markets as it is a very dated report.

Meanwhile, there are no Fed officials scheduled to speak but there are two notable Treasury auctions to watch: 3-Yr Note (11:30 a.m. ET) and 10-Yr Note (1:00 p.m. ET).

Outside any potential surprises from Congress regarding the bill to raise the debt limit, if we see rates continue to accelerate higher on inflation worries today, then stocks could remain volatile and potentially test last week’s lows.

Technical Levels to Watch Today

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What’s in Today’s Report:

  • Technical Update: Key Support and Upside Targets for the S&P 500

Markets are trading with a risk-on tone this morning after some positive Evergrande developments while focus continues to shift to the conclusion of today’s Fed meeting.

Evergrande announced overnight that the company would not default on a bond payment due tomorrow (but details were vague) while the PBOC injected 120B yuan of liquidity into the system helping ease financial conditions overnight.

Today there is one economic report due out early: Existing Home Sales (E: 5.90M), but the primary market focus will be the FOMC Meeting Announcement (2:00 p.m. ET) followed by the Fed Chair Press Conference (2:30 p.m. ET).

With regard to the Fed, any outcome that meets our “What’s Expected” or “Dovish If” outcomes from yesterday’s FOMC Preview will likely trigger a further relief rally while a “Hawkish If” scenario has the potential to spur another wave of elevated volatility with a high likelihood of stocks testing Monday’s lows.

Tom Essaye Quoted in Benzinga on September 9, 2021

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Key S&P 500 Levels To Watch As Market Endures 4th Straight Day Of Losses

And though that seems like another big leg higher for the S&P 500, it is only an additional 9% beyond the current record highs, something that is definitely within reason…Tom Essaye said, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Barron’s on August 16, 2021

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Dow, S&P 500 Notch Records, Overcoming Earlier Slide

A political negative for Biden which could hurt the chances any infrastructure bill is passed…wrote The Seven Report’s Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Yahoo Finance on August 12, 2021

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3 Things That Could Send The S&P 500 Down 20%

The consensus expectations for the Federal Reserve monthly asset purchasing is that the Fed will announce a plan for tapering sometime in…Essaye said. Click here to read the full article.

Market Multiple Levels: S&P 500 Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart
  • NFIB Small Business Optimism Index: Labor Market Issues Remain a Headwind

Futures are slightly lower while global shares extended recent gains overnight ahead of key inflation data and more progress on U.S. infrastructure and spending plans.

After passing the bipartisan $1.2T infrastructure bill yesterday, the Senate narrowly passed a $3.5T spending plan aimed at fighting climate change and poverty overnight however neither of the bills is likely to be taken up in the House until after the summer recess in September.

Economically, German CPI met estimates of 0.9% in July which did not have a material impact on markets.

Today, the focus will be on economic data early with the July CPI report due out ahead of the bell (E: 0.5% m/m, 5.5%y/y).

Then after the open, there are a couple of Fed speakers to watch: Bostic (10:30 a.m. ET) and George (12:00 p.m. ET). The narrative has been shifting slightly more hawkish recently so look for a continuation of that trend in the speeches which may cause a further rise in Treasury yields today.

Finally, in the early afternoon, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET. If the outcome is weak (tails) expect a continued move higher in longer maturity yields that will have some degree of hawkish impact across asset classes while a strong auction would likely see yields pull back from their recent gains which would likely offer a boost to growth/tech stocks.

Tom Essaye Quoted in CNBC on May 25, 2021

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S&P 500 erases gains and ends day slightly lower as market rally stalls

The market is basically in a holding pattern until the next big event, which is the Fed’s tapering schedule (or not tapering schedule), until we have more…said Tom Essaye, founder of Sevens Report. Click here to read the full article.

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How Does the S&P 500 Get to 4500?

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What’s in Today’s Report:

  • How Does the S&P 500 Get to 4500?
  • Weekly Market Preview:  Important inflation data, bank earnings, and Treasury auctions.
  • Weekly Economic Cheat Sheet:  Inflation Wednesday, April Data Starts Thursday.

Futures are slightly lower following a “not as dovish as expected” 60 Minutes interview of Fed Chair Powell.

Fed Chair Powell was more optimistic on near-term economic growth during a 60 Minutes interview on Sunday, and while he was by no means “hawkish,” his tone was taken as less dovish than expected and that’s weighing slightly on futures.

Economically, the only notable number was EU Retail Sales which beat expectations, rising 3.0% vs. (E) 1.2%.

Today there are no economic reports and only one Fed speaker, Rosengren (1:00 p.m. ET), so focus will remain on the 10 year yield.  Today there’s a 10 year Treasury auction and tomorrow there’s a 30 year Treasury auction.  If yields can remain stable amidst this stock rally, then the S&P 500 can continue to move higher.  But, if we see a resumption of the rise in yields, expect a headwind on stocks.

Tom Essaye Quoted in CNBC on November 9, 2020

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S&P 500 could hit 3,900, according to the Sevens Report

Amid news of a successful Covid-19 vaccine, the S&P 500 making a run to the 3,900 level is possible, according to editor of the Sevens Report, Tom Essaye. “It is materially bullish for stocks in the near term…” Essaye told clients. Click here to read the full article.

FOMC Preview

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What’s in Today’s Report:

  • FOMC Preview (Wildcard to Watch)
  • What Do Rising Treasury Yields Really Mean?

S&P 500 futures are down roughly 1% this morning tracking European shares lower after German trade data showed a much larger than anticipated drop in exports during the depths of the COVID-19 pandemic in April.

Eurozone GDP and the NFIB Small Business Optimism Index slightly beat expectations however German exports declined by the most on record in April, tumbling by -24.0% on the month which is weighing heavily on EU shares today.

Looking into today’s session, there are two lesser followed economic reports due to be released: April JOLTS (E: 5.750M) and Wholesale Trade (E: 0.4%) which are not likely to move markets while there are no Fed speakers as the June FOMC Meeting Begins today.

With tomorrow’s Fed announcement and Powell’s press conference coming into focus, it is possible we see a continued wave of profit taking today, especially given the disappointing economic data out of Europe, however a sense of “Fed paralysis” should keep the losses somewhat limited.