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General Technical Take for Equities

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What’s in Today’s Report:

  • What the FOMC Minute Mean for Markets (Hawkish)
  • General Technical Take for Equities
  • EIA Analysis and Oil Market Update

Futures are bouncing slightly following a quiet night as markets digest the declines of the past two days.

Economic data was mixed overnight as German Industrial Production missed estimates while Euro Zone Retail Sales beat expectations, but neither number is moving markets.

Geopolitically there was no new news on Russia/Ukraine as the conflict continues with little signs of any progress towards a cease fire.

Today we get one notable economic report, Jobless Claims (E: 202K) but three Fed speakers:  Bullard (9:00 a.m. ET), Evans (2:00 p.m. ET) and Williams (4:05 p.m.).  We expect each of them to further hammer the point that rates are rising by 50 bps in May, with balance sheet reduction beginning in the same month.  But, as long as they don’t say anything “hawkishly new” then stocks should be able to look past the commentary.

Tom Essaye Quoted in Financial Post on April 5, 2022

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Treasuries Retreat While U.S. Stocks Decline: Markets Wrap

Stocks are vulnerable to disappointment once again given the recent rally, so any deterioration in the Russia/Ukraine situation, spike in oil and hints of stagflation (high inflation/lagging growth) will hit stocks, and a 10% air pocket shouldn’t shock anyone…Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter, said in a note. Click here to read the full article.

Tom Essaye Quoted in Bloomberg on February 24, 2022

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Bitcoin’s Digital Gold Luster Fades as Customary Havens Win Out

Gold is doing exactly what it should be doing right now, but it’s a much more mature asset and it’s got a proven history in these types of conflicts of how it trades…said Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Coinspeaker on February 23, 2022

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Dow Jones Tanks as Tension between Russia and Ukraine Escalates

The Russia/Ukraine situation remains very fluid, and tensions remain high, and in the short term that will remain a headwind on stocks…said Tom Essaye, founder of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Big News Network on February 23, 2022

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The Russia/Ukraine situation remains very fluid, and tensions remain high, and in the short term that will remain a headwind on stocks…Tom Essaye, founder of the Sevens Report told CNBC Tuesday. Click here to read the full article.

Tom Essaye Quoted by Big News Network on January 28, 2022

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Yesterday’s FOMC decision and Powell’s presser was both positive and negative for markets, but in the end, it mostly reinforced what we know: The Fed is serious about raising rates, that’s going to continue to…Tom Essaye, founder of Sevens Report, said in a note to clients Thursday, as reported by CNBC. Click here to read the full article.

 

Why Did Stocks Drop Again?

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What’s in Today’s Report:

  • Why Did Stocks Drop Again?
  • Technical Analysis Follow Up to Sector Valuations
  • EIA Analysis and Oil Market Update

Futures are modestly lower but that’s not that bad considering Thursday’s ugly close and the soft NFLX earnings overnight.

Earnings were generally underwhelming, highlighted by the soft NFLX guidance which sent the stock down 20% after hours.  But, PPG and CSX also cited higher costs as impacting profitability, furthering margin concerns.

UK Retail Sales was the only notable economic number, and it missed estimates (-0.9% vs. (E) 3.4%).

Today there are no economic reports and just two notable earnings announcements, SLB ($ $0.39) and ALLY ($2.01), but they shouldn’t move markets.  Instead, it’s all about tech.  If tech can stabilize today, then markets can bounce (possibly into the Fed meeting next week).

Why High Growth Tech Is Still a Risk to the Market

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What’s in Today’s Report:

  • Bottom Line:  Why High Growth Tech Is Still a Risk to the Market
  • Weekly Market Preview:  Watch Treasuries and ARKK
  • Weekly Economic Cheat Sheet:  January Data Coming into Focus

Stock futures are sharply lower today as global bond yields surge to multiyear highs on tighter monetary policy expectations.

The 2-Yr T-Note yield topped 1% this morning with a rise of 7 basis points which is weighing on high valuation tech names, sending Nasdaq futures down roughly 2%.

Today, there are two economic reports to watch: Empire State Manufacturing Index (E: 26.0) and the Housing Market Index (E: 84). The market will be looking for decent numbers that don’t imply the recovery is losing momentum but not data that is “too hot” and could cause further rate hike fears. There are no Fed speakers today.

The Treasury will hold auctions for both 3-month and 6-month T-Bills at 11:30 a.m. ET today which typically does not warrant much attention, but given the increasing concerns about rate hikes this morning, the outcomes of the auctions could shed additional light on bond traders’ rate outlook and therefore move markets (soft auctions and a further rise in yields would be a stiffening headwind on tech stocks).

Finally, earning season is continuing to get underway with a few notable companies releasing results: GS ($12.10), PNC ($3.61), JBHT ($1.99).

Tom Essaye Quoted in Bloomberg Quint on January 4, 2022

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U.S. Stocks Start 2022 at Record; Treasuries Fall: Markets Wrap

Bottom line, the outlook is positive for stocks, but the removal of stimulus…wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

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Tom Essaye Quoted in Barron’s on December 3, 2021

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The Dow Fell, November’s Jobs Report Missed—and What Else Happened in the Stock Market Today

Initially, the stock market took the jobs report as good news. Any result above 200,000 but not wildly above expectations..wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.