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Stocks Ended Last Week Higher

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Stocks Ended Last Week Higher: Sevens Report Analysts Quoted in Investing.com

‘Last week’s price action is important for 2024,’ says Sevens Report

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

According to Sevens Report Research, last week’s price action is important for 2024, noting the increased volatility.

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

“Last Wednesday’s volatility does bring up two issues we need to watch: 1) Earnings disappointment and 2) The total lack of a ‘Wall of Worry,'” they added. While they are not bearish to start 2024 and believe the underlying fundamentals of the market are “still clearly positive.” the firm thinks investors are too complacent with this market as we begin the new year.

Also, click here to view the full Investing.com article published on December 28th, 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.

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Five Measurable Similarities To 2006/2007

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Five Measurable Similarities To 2006/2007: Sevens Report Analysts Quoted in Investing.com

Sevens Report Research sees similarities to 06/07, market susceptible to bouts of sudden volatility

Sevens Report Research said in its morning note on Friday that they see “five measurable similarities to 2006/2007.”

The firm explained that answering the question regarding what lies ahead for the stock market and bond market in 2024 is especially difficult right now, considering “the slew of mixed signals we are facing as we approach the end of 2023.”

“A few of those notable signals include 1) The deepest yield curve inversion since 1981, 2) The highest real interest rates since 2008, 3) Unexpectedly resilient economic data with Real GDP pushing 5% in Q3, 4) Stocks testing all-time highs, and 5) A historically complacent VIX reading,” they stated.

“But these are not unprecedented dynamics, and frankly, they’re reminiscent of the time period spanning 2006 and 2007,” said the firm.

“As long as the market’s fundamental consensus is uncertain and lacks conviction, which remains the case right now, this market will be susceptible to pullbacks and bouts of sudden volatility,” claims the firm.

Also, click here to view the full Investing.com article published on December 22nd, 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.

Why This Isn’t A Risk-Less Market (Despite The Fed Being Dovish)

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Why This Isn’t A Risk-Less Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why This Isn’t A Risk-Less Market (Despite The Fed Being Dovish)
  • Understanding Why the Dollar Is Plunging

Futures are modestly higher following mixed global economic data and as investors continued to digest Wednesday’s dovish Fed decision.

Global data was mixed, but not bad, and as such isn’t increasing global slowdown fears.  In Europe, the EU flash composite PMI missed estimates (47.0 vs. (E) 48.0) while the UK reading beat (51.7 vs. (E )51.0).  In China,

Retail Sales and Industrial Production were better than feared.

Today focus will be on economic data as we get the first look at December activity and for the rally to continue, the data needs to be Goldilocks (so close to expectations).  The key reports today are, in order of importance:    Dec. Flash Manufacturing PMI (E: 49.2), Dec. Flash Service PMI (E: 50.6), Nov. Industrial Production (E: 0.3%), Dec. Empire Manufacturing Index (E: 3.7).

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.

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Catalyst #1 – CPI Preview: Good, Bad & Ugly

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

What’s in Today’s Report:

  • CPI Preview:  Good, Bad & Ugly
  • Weekly Market Preview:  The Last Busy Week of 2023 (Inflation Update, Fed Decision & Growth Reports)
  • Weekly Economic Cheat Sheet:  Inflation Tomorrow, Fed Decision Wednesday, Economic Growth Updates Thurs/Fri

Futures are slightly lower on digestion of the multi-week rally following a quiet weekend and ahead of a the last catalyst-filled week of 2023.

Economically, there was no notable data overnight. Investors are focused on the looming reports this week (CPI tomorrow, Fed Wednesday, growth data Thurs/Fri).

On Japan, a Bloomberg article pushed back on the expectation for rate hikes and Japanese stocks are rallying 1%.

This is the last potentially busy week of 2023 but it starts slowly as the only notable report today is the N.Y. Fed 1 Year Consumer Inflation Expectations (3.6%).  If expectations drop sharply (possibly below 3.0%) that could provide a mild boost to stocks. But with key events looming Tuesday-Friday, the bar to move stocks and bonds today is pretty high.

CPI 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.

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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.

What Are GLP-1 Drugs and Why Do They Matter to Markets?

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What Are GLP-1 Drugs and Why Do They Matter to Markets? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Are GLP-1 Drugs and Why Do They Matter to Markets?

U.S. equity futures are trading lower this morning as a credit downgrade of China’s debt is overshadowing mostly good Composite PMI data overseas.

Overnight, Moody’s cut their outlook for Chinese debt to negative. This weighed on Asian shares and EM stocks, as well as domestic equity futures.

Economically, China’s Composite PMI favorably rose to 51.6 vs. (E) 50.1 in November. While the Eurozone Composite PMI remained in contraction, but notably firmed to 47.6 vs. (E) 47.1 last month.

Two key economic reports to watch today: JOLTS (E: 9.4 million job openings) and the ISM Services Index (E: 52.4). Investors will want to see more evidence that supports a soft landing in the data.

Finally, there is one Fed economist speaking today: Gibson (10:00 a.m. ET) but his comments should not materially move markets.

What Are GLP-1 Drugs and Why Do They Matter to Markets?

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

We’ve recently 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 (across any Sevens Report product), 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.

Bull Case vs. Bear Case: What’s It Mean Mean for Markets?

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Bull Case vs. Bear Case: What’s It Mean for Markets? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Bull Case vs. Bear Case:  What’s It Mean for Markets?
  • What Should Outperform in Q1/H1
  • OPEC+ Decision Takeaways

Futures are little changed as global manufacturing PMIs were better than expected, but looming commentary from Fed Chair Powell is keeping futures little changed.

Economically, Euro Zone (44.2 vs. (E) 43.8) and UK (47.2 vs. (E) 46.2) manufacturing PMIs beat estimates, reducing concerns about regional economic slowdowns.

Today focus will be on Fed speak and economic data.  Fed Chair Powell speaks twice today at 11:00 a.m. and 2:00 p.m. ET. Markets will want to see if Powell repeats the “policy is appropriate” message we received from Fed Governor Waller earlier this week.  If he does, stocks can rally.

On the economic front, we get one of the “big three” monthly economic reports today via the November ISM Manufacturing PMI (E: 47.5). So the markets will want to see more Goldilocks data (activity that meets estimates with declines in price indices).  Beyond Powell, we also get two other Fed speakers, Goolsbee (10:00 a.m. ET) and Cook (2:00 p.m. ET), but they shouldn’t move markets.

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.

Bull vs. Bear Case: Part II

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Bull vs. Bear Case: Part II: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Bull Case vs. The Bear Case – Part II
  • Chart – Gold Breaks Out to the Upside
  • Consumer Confidence Data Points to Soft Landing

Stock futures are tracking European equities higher this morning while the 10-Yr Note yield is below 4.30% at two month lows following less-hawkish ECB commentary and more evidence of disinflation in the Eurozone.

Economically, Spanish CPI fell to 3.2% vs. (E) 3.7% y/y while multiple regional German inflation prints suggest headline German CPI will come in well below the 3.5% estimate later this morning.

The ECB’s Stournaras notably said in commentary early this morning that rate cuts could come as soon as the middle of next year which saw more policy easing priced into rates futures markets in Europe and invited new bids into the bond markets.

Looking into today’s session, there are two domestic economic reports to watch this morning: GDP (E: 4.9%) and International Trade in Goods (E: -$86.7B) while there is just one Fed speaker in the afternoon: Mester (1:45 p.m. ET).

Bottom line, the early bid in the U.S. equity futures market and new lows in bond yields are being driven by cooler-than-expected inflation data in the EU, so it will be critical for the German CPI report to come in below estimates of 3.5% when the data is released at 8:00 a.m. ET. If so, expect the dovish rally to extend into Wall Street trading today.

Bull vs. Bear Case: Part II

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Bull vs. Bear Case (Part 1 of 3)

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Bull vs. Bear Case (Part 1 of 3): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Bull vs. Bear Case – What the Bulls Think Will Happen

Futures are flat with the 10-Yr yield hovering near 4.40% as traders await a slew of Fed speak and fresh economic data.

Economic data overnight was mildly disappointing. As Australian Retail Sales, the German GfK Consumer Climate report and Eurozone M3 Money Supply all missed estimates.

Looking into the U.S. session, there are a few second-tiered economic reports to watch today: Case-Shiller Home Price Index (E: 0.7%), FHFA House Price Index (E: 0.4%), and Consumer Confidence (E: 101.5), but none are likely to move markets ahead of the key inflation data due out Thursday.

Additionally, there are several Fed officials scheduled to speak today: Goolsbee, Waller, Bowman, and Barr. If any of them strike a materially hawkish tone or stray from the “soft landing” outlook narrative, it could weigh on stocks today.

Finally, there is a 7-Yr Treasury Note Auction at 1:00 p.m. ET. If the results are weak and yields move higher, expect that to be a headwind for equities today. Conversely, a strong auction could push rates to new lows and power stocks higher into the end of the month.

Bull vs. Bear Case

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Small Cracks in the Three Pillars of the Rally?

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Small Cracks in the Three Pillars of the Rally? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Small Cracks in the Three Pillars of the Rally?
  • Weekly Market Preview:  Can the Ideas of A Dovish Fed and Economic Soft-Landing Power Stocks to 2023 Highs?
  • Weekly Economic Preview:  Key Inflation and Growth Data This Week

Futures are slightly lower after a mostly quiet weekend as Chinese growth worries offset geo-political positives.

Chinese industrial profit growth slowed to 2.7% in Oct vs. 11.9% in Sept and that data combined with news of a quickly spreading respiratory illness in China is weighing on growth expectations.

Geo-politically, the Israel-Hamas cease fire will likely be extended several days and that’s easing geo-political tensions and oil is falling as a result (down more than 1%).

This week contains several potentially important catalysts on inflation and economic growth, but they come later in the week. So, focus today will be on holiday spending commentary and New Home Sales (E: 721k).  Positive commentary on spending and Goldilocks data would help support stocks.

Three Pillars of the Rally?

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