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Why This Market Is Still All About the Data

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Why This Market Is Still All About the Data: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why This Market Is Still All About the Data
  • EIA and Oil Market Analysis (How Far Can the Rally Go?)

Futures are slightly higher as encouraging inflation data from Europe was partially offset by ongoing government shutdown and labor strike worries.

Spanish Core CPI rose 5.8% vs. (E) 6.1% and importantly reminded markets that disinflation was still occurring.

Politically, a government shutdown looks increasingly likely while the UAW again threatened to expand the strike.

Today will be a busy day as there are important economic reports and notable Fed speak to watch.  Economically, the key report is Jobless Claims (E: 211K) and markets need this number to move higher to ease tight labor market concerns.  We also get the final look at Q2 GDP (E: 2.3%) but that shouldn’t move markets.

On the Fed, Powell speaks at 4:00 p.m. ET and while he’s not expected to address policy, there will be Q&A.  Other speakers today include Goolsbee (9:00 a.m. ET), Cook (1:00 p.m.), and Barkin (7:00 p.m.).

Why This Market Is Still All About the Data

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Why Did Stocks Drop Yesterday?

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Why Did Stocks Drop Yesterday? Start a free trial of The Sevens Report.

What’s in Today’s Report:

    • Bottom Line – Why Did Stocks Drop Yesterday?
    • Chart: S&P 500 Tests Key Support
    • Economic Takeaways: Case-Shiller Home Price Index & Consumer Confidence
    • Philadelphia Fed Service PMI Turns Negative, Price Readings Elevated (Stagflation)

    Stock futures are bouncing back modestly and bonds are stable this morning. This is amid improvement in Chinese economic data while data in Europe was less encouraging.

    Economically, Chinese Industrial Profits were down -11.7% y/y in August. But that was up from -15.5% y/y in July suggesting government stimulus efforts may be stabilizing the economy. The property development sector remains a major source of uncertainty.

    Meanwhile, in Europe, Eurozone M3 Money Supply declined more than expected, down -1.3% vs. (E) -1.0%. Which underscores tightening financial conditions in the EU amid aggressive policy measures by the ECB.

    Today, the calendar is fairly light as there is just one economic report to watch this morning: Durable Goods Orders (E: -0.3%) and no Fed officials are scheduled to speak.

    In the afternoon there is a 5-Yr Treasury Note auction at 1:00 p.m.. ET, and as usual, if there is any meaningful move in yields, it could impact equity markets (stable or easing yields would be welcomed by equity bulls, new highs would pressure stocks and other risk assets).

Sevens Report Q3 ’23 Quarterly Letter Coming October 2nd.

The Q3 2023 Quarterly Letter will be delivered to advisor subscribers on Monday, October 2nd.

The S&P 500 just hit the lowest level since March amid concerns about Fed rate hikes, a rebound in inflation and a possible recession.

Now is the perfect time to provide a value-add market update for clients and ensure they have the right expectations heading into the fourth quarter.

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q2 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link. To subscribe please email: info@sevensreport.com.

Why stocks dropped yesterday

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Hard Landing vs. Soft Landing Scoreboard

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Hard Landing vs. Soft Landing Scoreboard: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing vs. Soft Landing Scoreboard
  • Chart: 10-Yr Yield Quickly Approaching Last Week’s “Hawkish Technical Target”

Stock futures are lower and there is a modest fear bid in Treasuries this morning. This is amid renewed worries about China’s property sector and growing angst about a potential government shutdown in the U.S.

After one of China’s largest property developers, Evergrande, missed a debt payment, multiple former executives were arrested overnight adding to worries about the embattled sector and the Chinese economy more broadly.

Also, multiple ratings agencies have offered negative warnings regarding the impact of a government shutdown on U.S. debt as the deadline for Congress to reach a deal on spending is just days away. Any progress towards a deal will be a modest positive for risk assets today.

Looking further into today’s session, there are several economic reports to watch this morning including: Case-Shiller Home Price Index (E: 0.6%), New Home Sales (E: 699K), and Consumer Confidence (E: 105.9). To stabilize, markets will want to see more Goldilocks data showing stable but slowing growth and demand metrics and no signs of rising price pressures.

In the afternoon, there is a 2-Yr Treasury Note auction at 1:00 p.m. ET, the first since the hawkish Fed meeting so the results very well could move yields and impact stocks today. Finally, there is one Fed speaker: Bowman (1:30 p.m. ET), and if “higher for longer” is reiterated, that could weigh on risk assets.

Hard Landing vs. Soft Landing Scoreboard

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Gold’s Outlook Following The Federal Reserve’s Decision

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Gold’s Outlook: Sevens Report Analysts Quoted in MarketWatch

Gold gains for a 4th straight session to settle at a more than 2-week high

Gold futures posted a modest gain on Tuesday to mark another settlement at their highest in over two weeks, a day ahead of the Federal Reserve’s decision on interest rates.

“A hawkish decision would be decidedly bearish for gold…while a dovish surprise would support a run beyond $2,000” for gold, said analysts at Sevens Report Research, in Tuesday’s newsletter.

December gold climbed by 30 cents, or less than 0.1%, to settle at $1,953.70 an ounce on Comex.

Also, click here to view the full MarketWatch article published on September 19th, 2023. However, to see the Sevens Report’s full comments on economic data & inflation sign up here.

Gold's Outlook

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Key Levels to Watch on Fed Day

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Key Levels to Watch on Fed Day: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • Key Technical Levels to Watch on Fed Day – Print or Share These Charts
  • Is Canadian CPI a Warning on Inflation?

U.S. equity futures are rising alongside European shares this morning. Resulting from a dovish market reaction to a “cooler than feared” inflation print in the U.K. overnight.

Headline CPI in the U.K. dropped to 6.7% vs. (E) 7.1% in August while Core fell to 6.2% vs. (E) 6.8%. The data was a clear surprise and has resulted in rates markets lowering odds of a BoE rate hike tomorrow to 50% from near 100% previously, supporting risk-on money flows this morning.

There are no economic reports or Treasury auctions today. This will likely leave markets in a state of “Fed Paralysis” until the FOMC Announcement (2:00 p.m. ET) and Fed Chair Powell’s press conference (2:30 p.m. ET).

Also, to request a one-page PDF “tear sheet” of the charts on Page 2 of today’s Report, complete with price level explanations, email info@sevensreport.com.

Key Levels to Watch

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Economic Data & Inflation: Tom Essaye Quoted in Barron’s

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Economic Data & Inflation: Tom Essaye Quoted in Barron’s

Stock Markets Pause Ahead of Next Week’s Fed Decision

Firstly, “Today focus will be on economic data and if data is ‘Goldilocks’ like we saw on Thursday, expect a continuation of yesterday’s rally.” “Conversely, if the data shows inflation hot or growth slowing, don’t be surprised if markets give back most of yesterday’s rally,” writes Sevens Report Research’s Tom Essaye.

The United Auto Workers also began a partial strike on Friday. Uncertainty surrounding the impact of the strike could weigh on markets.

Also, click here to view the full Barron’s article published on September 15th, 2023. However, to see Tom’s full comments on economic data & inflation sign up here.

Economic data

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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.

Stocks Pop in Relief Rally

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Stocks Pop in Relief Rally: Tom Essaye Quoted in Barron’s

Stocks Pop in Relief Rally

Sevens Report Research’s Tom Essaye told Barron’s he believes the market is experiencing a form of a relief rally.

He noted a wave of key catalysts for stocks has passed without significant negative surprises. This included the consumer price index on Wednesday and data on producer prices and retail sales on Thursday.

“Specifically for today, the ECB signaling it’s done with rate hikes combined with Goldilocks economic data to boost stocks and it’s just been building throughout the day,” Essaye says. “Essentially, it’s a similar dynamic to what we saw in June and July. Where markets are optimistic on growth (so more confident of a no/soft landing) and we see the ‘rest’ of the market outperform vs. tech.”

Also, click here to view the full Barron’s article published on September 14th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Stocks Pop

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Why Did Stocks Drop on Friday?

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Why Did Stocks Drop on Friday? Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop on Friday?
  • Weekly Market Preview:  Will the Fed Confirm Market Expectations?
  • Weekly Economic Cheat Sheet:  Important Growth Data Throughout the Week (Could Confirm or Undermine Soft/No Landing Hopes)

Futures are slightly higher as markets bounce following Friday’s declines and after a quiet weekend of news.

The various strikes occurring across the country (writers, UAW) contributed to Friday’s market decline. There was little positive progress over the weekend on resolving either work stoppage.

Geopolitically, President Biden’s National Security Advisor met with China’s foreign minister. The meeting is raising hopes the U.S./China relationship could improve.

Today the only notable economic report is the Housing Market Index (E: 50.0) and that shouldn’t move markets as long as it doesn’t provide a major positive or negative surprise. Barring that, we’d expect pre-Fed positioning to generally drive trading today.

Why Did Stocks Drop

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Economic Indicators: U.K. GDP Drop and EU Industrial Production

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Economic Indicators: Tom Essaye Quoted in Barron’s

Gloomy Economic Data Weigh on European Trading

Economic indicators such as, “U.K. GDP dropped…after hot wage data yesterday, bolstering stagflation fears while EU Industrial Production fell,” said Tom Essaye, the founder of Sevens Report Research.

“Despite the recently soft data, rates markets continue to price in a 75% chance of an ECB rate hike this week.”

Also, click here to view the full Barron’s article published on September 13th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Economic Indicators

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.

CPI’s Influence on Market Dynamics: A Closer Look

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CPI’s Influence on Market Dynamics: Tom Essaye Quoted by BNN Bloomberg

Nasdaq 100 Drops 1 per cent as Apple slides after event

CPI is really key because if it halts its downward trend, markets will have to price in a more hawkish Fed. And that would be a headwind on stocks, said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.

Lastly, “Put in a more familiar way, CPI impacts two of the three pillars of the rally: disinflation and expectation the Fed is done with rate hikes,” Essaye noted.

Also, click here to view the full BNN Bloomberg article published on September 12th, 2023. However, to see Tom’s full discussion on CPI’s influence on markets sign up here.

CPI's Influence - BNN

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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