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Tech Decline Part Two: Staying Long With Less Risk

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What’s in Today’s Report:

  • Tech Decline Part Two: Ways to Stay Long Tech But Reduce AI Infrastructure

Futures are in the red as oil prices hit six-week highs overnight (WTI topped $88/barrel) amid ongoing geopolitical angst surrounding the U.S.-Iran war, but global equities are stabilizing as the fear bid in energy is beginning to show signs of near-term exhaustion.

Economically, U.K. CPI fell -0.2% to 2.6% vs. (E) 2.7% Y/Y while Core CPI held steady at 2.6% vs. (E) 2.5% Y/Y, the latest evidence that global inflation pressures have potentially peaked.

There are no noteworthy economic reports today and no Fed officials are scheduled to speak (pre-July meeting blackout period) but there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET that could shed light on longer-term inflation expectations and potentially impact equities (the stronger the demand for the bonds, the better).

The primary focus of today’s session will remain the fluid geopolitical conflict in the Middle East (any signs of a ceasefire deal on the table will be a positive) and the Q2 earnings season which remains in full swing with GEV ($3.16), T ($0.59), PM ($2.04), TSLA ($0.53), GOOGL ($2.87), TXN ($1.91), and LUV ($0.52) all due to release quarterly results today.

 

Could Be A “Canary In The Coal Mine” For The Stock Market

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Tom Essaye said that cheap AI stock valuations could signal that investors are growing fearful that the data center boom could come to a halt.

Why Oracle’s recent credit downgrade could be a warning sign for stocks

According to Tyler Richey, a technical analyst at Sevens Report Research, it could be a “canary in the coal mine” for the stock market.

The ratings agency cut Oracle’s rating from BBB, citing heavy infrastructure spending and it’s high exposure to OpenAI as risks to its ability to meet its debt obligations. While the news went relatively unnoticed in the stock market, Sevens Report says equity investors should pay attention, as it could be an early warning of bigger issues on the horizon.

“ORCL very well may turn out to be the first of the mega-cap-tech ‘Hyperscalers’ to be rolling over into what could (and is increasingly likely to) prove to be the early stages of a longer-term, cyclical bear market for equities,” Richey wrote in a July 13 client note.

“A higher trending junk bond yield index with stocks trading near all-time highs is a troublesome combination,” Richey said.

“Bottom line, the ORCL downgrade last week served as a stark reminder that critical signals from the bond market can be subtle at first, but offer both fair warning of a potential downturn, and a rare opportunity to take action to protect principle in riskier equity and bond market holdings,” Richey said.

Also, click here to view the full article published in Business Insider on July 17th, 2026. 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.

Did Markets Pass or Fail the Three Tests Last Week?

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What’s in Today’s Report:

  • Did Markets Pass or Fail the Three Tests Last Week?
  • Weekly Market Preview: Focus on Earnings This Week
  • Weekly Economic Cheat Sheet: Important Growth Updates

Futures are slightly higher as markets bounce from Friday’s declines despite further escalation between the U.S. and Iran over the weekend.

Oil prices hit $90/bbl overnight on continued escalation between the U.S. and Iran but pulled back and are flat after both sides reiterated they are still open to negotiations.

Economically, there was more positive inflation data as German PPI fell more than expected (-0.3% vs. (E) -0.2%).

Today there are no notable economic reports but focus will remain on geopolitics and any progress (at all) on a new ceasefire agreement will be a positive for stocks.

On earnings, this week is an important one although most of the major reports come later this week.  Some results we’re watching today include: DPZ ($4.09), AMC ($-0.01), STLD ($3.66).

 

Yahoo Finance Executive Editor Discusses IBM Earnings With Tom Essaye

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IBM set to have its worst day since 1961

Yahoo Finance Executive Editor Brian Sozzi and his Opening Bid panel featuring guests: Globalt Investments senior portfolio manager Thomas Martin, Sevens Report Research founder Tom Essaye, and Yahoo Finance Senior Business Reporter Brooke DiPalma break down IBM’s (IBM) worse-than-expected quarterly results and what they signal for the company’s future as the stock tumbles nearly 25% in today’s session.

Also, click here to view the full video published on Yahoo Finance on July 14th, 2026. 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.

Three Tests for the Rally This Week

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What’s in Today’s Report:

  • Three Tests for the Rally This Week
  • Weekly Market Preview: A Critical Week for Inflation, AI and the Fed
  • Weekly Economic Cheat Sheet: Inflation in Focus (and the Numbers Need to be Good)

Futures are modestly lower on rising geopolitical tensions after escalation of the U.S./Iran conflict over the weekend.

Iran attacked another commercial ship transiting the Strait of Hormuz prompting some of the most intense attacks from the U.S. since the start of the conflict.

Despite the escalation, however, oil is up a modest 3% and markets still believe both sides seek a ceasefire (which is why the markets aren’t down more on the news).

This is a busy week of data and earnings, but it starts slowly as there are no notable economic reports today and just two Fed speakers (Bowman (5:25 a.m. ET) and Waller (12:30 p.m. ET)) and they shouldn’t move markets.  Instead, focus will be on geopolitics and any reports of ceasefire progress will help stocks bounce.

 

Tom Essaye Says Cheap AI Stock Valuations Could Signal This

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Tom Essaye said that cheap AI stock valuations could signal that investors are growing fearful that the data center boom could come to a halt.

‘Exactly how the dot-com bubble burst’: A market research firm says keep an eye on this AI warning sign

Tom Essaye, the founder of Sevens Report Research, said in a note on Wednesday that cheap AI stock valuations could signal that investors are growing fearful that the data center boom could come to a halt.

Typically, investors are willing to assign higher valuations to growth stocks because of their high future earnings potential. So the fact that some AI stock valuations are so low today means investors are skeptical that earnings potential will ever come to fruition, Essaye said.

“Think of it this way: GOOGL (to use one as an example) cancels building 10 data centers because it’s going to cost too much money and the return isn’t there,” he wrote. “That will result in massive order cancellations at NVDA, MU, AVGO, SNDK, etc., because no one needs the chips, networking, memory, or processor power,” he added.

A recent example of investor uneasiness, Essaye said, is the recent decline in Oracle stock. Shares of the company have tumbled about 25% since June 1 as it’s poured money into the AI buildout.

“To be fair, this fear has been around for several months, and it isn’t appearing yet. However, it’s not without precedent because this is exactly how the dotcom bubble burst,” he said.

“While people connected to the internet, their connection wasn’t nearly as profitable as quickly as everyone assumed,” Essaye continued. “Because of that, the buildout stopped.”

Also, click here to view the full article published in Business Insider on June 19th, 2026. 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.

You’re Seeing A Bounce And A ‘Buy The Dip Says Sevens Report

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The two underpinnings of the rally are really earnings and economic growth, Tom Essaye tells Barron’s.

The Dow Is Leading. Wall Street Is Selling Winners and Buying Losers.

“You’re just seeing sort of a bounce and a ‘buy the dip,’” Sevens Report Research’s Tom Essaye tells Barron’s. “The consumer is holding up really, really well. There are some concerns that increased price hikes into the coming months will continue to sort of strain consumer spending, but there’s just no real evidence that that’s happening yet.”

Essaye says that as long as the labor market holds on and AI spending continues to drive massive earnings growth, the market can keep chugging.

“All of this money being spent is essentially being just firehosed onto the economy by the hyperscalers, by investors that are just clamoring to build out these AI data centers, and it’s creating this, essentially additional stimulus program, that’s helping every sector of the market—every single one,” Essaye says. “If that is not self-sustaining, if all of that doesn’t have a net positive ROI, and it stops, then everything has a real big problem. But it’s not stopping any time soon.”

Also, click here to view the full article published in Barron’s on May 27th, 2026. 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.

Is This An “Earnings vs. Everything Else” Market?

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What’s in Today’s Report:

  • Is This An “Earnings vs. Everything Else” Market?
  • Weekly Market Preview: A Sneakily Important Week for Earnings, Economic Growth and Iran
  • Weekly Economic Cheat Sheet: Does May Economic Activity Stay Resilient?

Futures are extending Friday’s declines and are moderately lower as there was no progress on a U.S./Iran ceasefire over the weekend.

The UAE and Saudi Arabia reported limited drone attacks on energy infrastructure and while markets still expect a ceasefire, the chances of a resumption of fighting are rising.

Economically, Chinese data was soft, as Industrial Production (4.1% vs. (E) 6.0%), Fixed Asset Investment (-1.6% vs. (E) 1.7%) and Retail Sales (0.2% vs. (E) 2.0%) all badly missed estimates.

Today focus will remain on geopolitics as President Trump is meeting with his national security team and while not the majority expectation, the chances of a resumption of direct U.S. attacks on Iran are rising (and if that happens, markets will drop). Away from geopolitics, the only notable economic report is the Housing Market Index (E: 34) which shouldn’t move markets.

 

Memory In The Technology Space Is Now Skyrocketing Says Tom Essaye

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Memory In The Technology Space Is Now Skyrocketing Says Tom Essaye

What average investors should know about Fed nominee Kevin Warsh

“Memory that everyone needs in the technology space is now skyrocketing in price. How long can companies negotiate this? They’ve been doing an amazing job. The answer is not forever, so we can’t get complacent,” Tom Essaye, founder of Sevens Report Research, told Yahoo Finance.

Also, click here to view the full video published on Yahoo Finance on May 3rd, 2026. 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.

The Two Main Reasons Stocks Hit New Highs

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What’s in Today’s Report:

  • The Two Main Reasons Stocks Hit New Highs
  • Weekly Market Preview: Can Resilient Economic Data Keep Supporting Stocks?
  • Weekly Economic Cheat Sheet: Jobs Week (Jobs Report on Friday)

Futures are slightly lower as markets digest the latest U.S./Iran headlines, including the implication of “Operation Freedom” and a report a U.S. Naval vessel was attacked.

On Sunday, President Trump announced “Operation Freedom,” an operation whereby the U.S. military will help escort trapped tankers out of the Strait of Hormuz.

Iran’s reaction to this is unclear, but there are unconfirmed reports a U.S. naval vessel was hit by Iranian missiles and oil is rallying in response (and futures are slipping).

Today headlines from the Gulf will dominate markets and if there’s a resumption of attacks between the U.S. and Iran, expect oil to spike and stocks to drop.  Outside of geopolitics, New York Fed President Williams speaks (12:50 p.m. ET) and for markets, the more dovish he is, the better.