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The thesis behind the TACO trade

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The thesis behind the TACO trade: Sevens Report Founder, Tom Essaye Quoted in The Times of India

Explainer: What is ‘TACO trade’ – a new nickname mocking Trump’s tariff approach

As per a Bloomberg report, “The thesis behind the TACO trade is: Buy the Trump tariff dip,” Tom Essaye of the Sevens Report wrote in a note to clients on Wednesday. “Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs. As such, any sell-off following a dramatic tariff threat should be bought.”

Also, click here to view the full The Times of India article featured in MSN, published on May 28th, 2025. 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.

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.

Halfway to a Soft Landing?

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What’s in Today’s Report:

  • Halfway to a Soft Landing?
  • Weekly Market Preview:  Does Trade Progress Actually Occur? (Where Are the Trade Deals?)
  • Weekly Economic Cheat Sheet:  Focus on Inflation (The Lower, the Better)

Futures are flat following a mostly quiet weekend as investors await the results of the latest U.S./China trade talks.

A meeting between U.S. and Chinese trade officials in London should end shortly and markets are waiting for the results (the meeting could see more on Chinese efforts to curb fentanyl shipments to the U.S.).

Economically, Chinese exports missed expectations (4.8% y/y vs. (E) 6.0%) underscoring economic headwinds.

Today focus remain on trade and any positive (or negative) headlines from the U.S./China meeting in London will move markets.  Outside of trade, focus will be on the N.Y. Fed 1-Year Consumer Inflation Expectations (E: 3.6%).  These have cooled lately as the trade war has de-escalated and further cooling would be a positive for markets.

Jobs Day

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What’s in Today’s Report:

  • Jobs Report Preview (Abbreviated)
  • Jobless Claims Show Potential Cracks Emerging in Labor Market
  • Productivity and Costs Point to Sticky Wage Inflation
  • Collapsing Trade Deficit Reveals Significant Tariff Impact on Trade

Futures are modestly higher this morning as TSLA shares (+4%) are recovering some of yesterday’s heavy losses amid prospects of a Trump-Musk call today while economic data was solid overnight ahead of today’s jobs report.

Economically, Eurozone GDP rose +1.5% y/y in Q1 vs. (E) +1.3% while Retail Sales rose +2.3% vs. (E) +1.0% y/y. Both data points support the case for ongoing resilience and bolster prospects for a soft economic landing in the EU.

Market will be primarily focused on the May BLS Employment Situation Report this morning at 8:30 a.m. ET (E: 129K Job-Adds, 4.2% Unemployment Rate, 3.7% Wage Growth).

From there focus will shift to the financial news headlines as traders look for additional insight on trade negotiations, particularly talks between the U.S. and both Europe and China, however there is a “second tiered” economic release in the afternoon with Consumer Credit (E: $10.2B) due out at 3:00 p.m. ET.

Finally, two late season earnings releases to watch today are ABM ($0.87) and MANU ($-0.33) but neither is likely to meaningfully move markets with the focus on the May jobs report.

Buy the Trump tariff dip

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Buy the Trump tariff dip: Sevens Report Founder, Tom Essaye Quoted in Markets Insider

The TACO trade is the new Trump trade. Here’s what to know about the meme ruling the stock market.

“Buy the Trump tariff dip. Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs,” Tom Essaye of the Sevens Report wrote on Wednesday. “As such, any sell-off following a dramatic tariff threat should be bought.”

Also, click here to view the full Market Insider article featured in MSN, published on May 28th, 2025. 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.

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.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview
  • ADP Employment and ISM Services PMI Takeaways
  • Oil Update – Prices Resilient Despite Three Bearish Catalysts

Futures are little changed as global traders digest yesterday’s soft U.S. economic data after a mostly quiet night of news.

Economically, China’s Services PMI rose from 50.7 to 51.1, meeting estimates while Eurozone PPI favorably cooled to 0.7% from 1.9%.

Looking into today’s session, there are several economic reports to watch including International Trade in Goods (E: $-118.1B), Jobless Claims (E: 235K), and Productivity & Costs (E: -0.8%, 5.7%). However, with the May Jobs Report looming large tomorrow, it will take a significant surprise in one of these reports to materially move markets.

There are also multiple Fed speakers again today including Kugler (12:00 p.m. ET), Harker (1:30 p.m. ET), and Schmid (1:30 p.m. ET). Any dovish commentary regarding yesterday’s soft economic data is likely to be well received, supporting both stocks and bonds.

Finally, there are a handful of late-season earnings releases this afternoon: AVGO ($1.35), LULU ($2.59), DOCU ($0.25), BF.B ($0.36), and WOOF ($-0.05). AVGO is particularly in focus as an increasingly important semiconductor manufacturer and its quarterly results could move the broader tech space on a material beat/miss.

New ETFs for Your Watchlist

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What’s in Today’s Report:

  • New ETFs for Your Watchlist
  • JOLTS Data Takeaways – A Rise in Job Openings Signals Resilient Labor Market

Stock futures have reversed from overnight losses to trade with moderate gains in the pre-market largely thanks to upbeat composite PMI data in Europe.

Economically, the Eurozone’s Final Composite PMI came in at 50.2 vs. (E) 49.5 mostly due to a better than expected Services Index component which firmed to 49.7 vs. the Flash print of 48.9.

Today, there are two more noteworthy domestic economic releases due to be released; the May ADP Employment Report (E: 110K) ahead of the open, and the ISM Services PMI (E: 52.0) shortly after the bell. Investors will be looking for more evidence of labor market resilience in the ADP release and evidence of strong consumer spending and preferably cooling inflation pressures in the ISM data.

There are two more Fed officials speaking today: Bostic & Cook (8:30 a.m. ET) but the narrative has not materially changed since the May Fed meeting and isn’t expected to as the Fed is set to remain data-dependent for the foreseeable future.

Finally, there are a few more noteworthy earnings releases today that could impact markets including DLTR ($1.19), FIVE ($0.83), and PVH ($2.23). As retail and consumer focused brands, any mention of weakness in consumer spending trends could pour cold water on the early June rally.

Tariff/Trade-War Update

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What’s in Today’s Report:

  • Where Do We Stand With Tariffs and How Important Are They for Markets?
  • Weekly Economic Preview: ISM Data and May Jobs Report in Focus

Futures are lower with global markets amid a combination of escalating trade war tensions and an unexpected intensification in the Russia-Ukraine war over the weekend.

President Trump doubled tariffs on steel to 50% which dampens hopes for an EU trade deal while rhetoric between the U.S. and China deteriorated since Friday’s close.

Ukraine surprisingly struck Russian air base targets over the weekend in what military officials said was their large drone attack so far in the multi-year conflict. The escalating geopolitical tensions has reignited a fear bid in oil with futures prices up nearly 4% this morning.

Today kicks off a busy week of economic data with the most important release coming just after the open via the ISM Manufacturing PMI (E: 48.5). Construction Spending (E: 0.2%) will also be released after the open but is less likely to impact markets.

There are also multiple noteworthy Fed officials scheduled to speak today including, Logan (10:15 a.m. ET), Goolsbee (12:45 p.m. ET), and most importantly Powell (1:00 p.m. ET). Any fresh insight on policy plans has the potential to materially move markets (hawkish commentary would influence risk-aversion while dovish comments would support a continuation of the May rally).

‘TACO Trade’: What to know about the term Donald Trump doesn’t want to hear again

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The term “TACO trade” took off across most media platforms on Wednesday, and if you are just now catching up and wondering what that’s all about … well, it doesn’t have a thing to do with Taco Bell.

It does have everything to do with President Donald Trump and his on-again, off-again tariff policies. And Trump is not too happy to hear it.

“But the Trump tariff dip,” Tom Essaye of the Sevens Report said. “Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs. As such, any sell-off following a dramatic tariff threat should be bought.”

Trump was asked about the term on Wednesday, and he claimed it was the first time he had heard of it. He also, clearly, did not appreciate it.
To read the full article from Penn Live from May 29, 2025 click here.

TACO Trump goes viral, as analyst confirms the US President does ‘chicken out’

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It didn’t take long for social media to jump on to US President Donald Trump’s latest, unedifying nickname.

Earlier this month, Financial Times columnist Robert Armstrong coined an acronym to describe a popular trading strategy centered around Trump’s start-and-stop tariff policies – TACO (Trump Always Chickens Out).

So does Trump always chicken out?

According to a note to subscribers on Thursday from respected Wall Street market analyst Tom Essaye, the answer is yes.

In the note, the Sevens Report Research founder pointed to Trump’s decision to exempt goods subject to the US-Mexico-Canada Agreement from additional tariffs on Mexico and Canada, significantly reducing their sting. To read the full article on The New Daily from May 29, 2025 click here.

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Why the ’TACO Trade’ still matters for your portfolio

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Investing.com — Over the past 48 hours, the term ‘TACO Trade’ has been widely circulated on social media and even made it to the White House. TACO is an acronym for “Trump Always Chickens Out”, which suggests that despite his tough talk on tariffs, he will always back down in the end.

Trump was asked about the TACO trade on Wednesday, enraging the President. “… don’t ever say – what you said, that’s a nasty question,” Trump slapped back when asked about it.