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Inflation Expectations Dashboard

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What’s in Today’s Report:

  • Sevens Report Inflation Expectations Dashboard
  • Chart: Gold Holds Key Trend Support

Stock futures are wavering between gains and losses this morning as traders digest mixed economic data and look ahead to a key inflation report due later in the week.

Economically, Japanese GDP was not as bad as feared in Q1 but German Industrial Production missed estimates as did the U.S. NFIB Small Business Optimism Index which is weighing modestly on sentiment this morning.

There are two economic reports to watch in the U.S. today: International Trade in Goods and Services (E: -$69.0B) and JOLTS (E: 8.045M). The latter will be the more important to watch as investors continue to look for clues regarding the state of the labor market recovery.

No Fed officials are scheduled to speak today however there is a 3-Yr Treasury Note auction at 1:00 p.m. ET and a weak outcome could rekindle taper fears with Thursday’s CPI report coming into focus.

Jobs Report Preview

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What’s in Today’s Report:

  • Jobs Report Preview:  Two Sided Risks for the Market

Futures are modestly lower following mixed economic data while the Fed announced it’s winding down one of its pandemic era support programs.

Service PMIs for May were mixed as the Chinese PMI missed estimates while the EU & British PMIs were in-line with expectations, but none of the data is altering the expectation that the global economic recovery is on going.

The Fed announced it’s going to start selling assets from the “Secondary Market Credit Facility” which was the program the Fed used to buy corporate bonds to stabilize markets during March/April of 2020.  This has nothing to do with QE, but it is a general reminder that we are seeing central banks removing market support as society returns to normal, and it’s a tangential reminder that tapering of QE is coming at some point.

Today’s focus will be on economic data as we get several notable reports today:   ISM Services PMI (E: 63.1), Jobless Claims (E: 400k), and ADP Employment (627k).  Generally speaking, markets will want to see “Goldilocks” data from all three reports – close to or better than expectations but not so good they make the Fed think more about tapering.  We also have three Fed speakers:  Bostic (12:30 p.m. ET), Harker (1:50 p.m. ET), and Quarles (E: 3:05 p.m. ET) but none of them should move markets.

Tom Essaye Quoted in Barron’s on June 1, 2021

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Stocks End Mixed After Another Inflation Red Flag

If we get that strong [PMI] number (along with strong pricing indices) then pressure will build on the Fed to at least acknowledge a discussion about…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
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Tom Essaye Quoted in Barron’s on May 25, 2021

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Shake Shack Pops, Domino’s Drops, and the Stock Market Is Rising

U.S. stock futures are extending yesterday’s gains this morning as easing inflation concerns…writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Bloomberg on May 24, 2021

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Tech Leads Gains in Stocks as Inflation Fears Ease: Markets Wrap

Until then, expect a more volatile market, but at this point, strong policy support for stocks remains very much in place, and that’s a good thing…according to Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

Tom Essaye Quoted in ThinkAdvisor on May 24, 2021

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Cathie Wood Trims Her Biggest Stakes as Ark Funds Stumble

This is an evolution a bit — Ark accepting it’s a large fund-family now, it makes sense that especially in some of the smaller cap names they are reducing…said Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here to read the full article.

Tom Essaye Quoted in Barron’s on May 20, 2021

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Virgin Galactic Soars, Merck Falls, and Stocks Are Down Again

“Futures are marginally lower as markets digested the slightly hawkish FOMC minutes,” writes Tom Essaye, founder of Sevens Report Research. Click here to read the full article.

Tom Essaye Quoted in Bloomberg on May 23, 2021

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Nasdaq 100 Rallies 2% as Inflation Concerns Ebb: Markets Wrap

Inflation fears will remain a headwind for stocks until it becomes clear that price pressures are temporary. “Until then, expect a more volatile market, but at this point, strong policy support for…” Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here for the full article.

Tom Essaye Quoted in Bloomberg on May 20, 2021

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U.S. Stocks Are Mixed; Bitcoin Resumes Decline: Markets Wrap

“For people to say Bitcoin shouldn’t influence equity prices on a short-term basis, that’s crazy. We live in a 24/7 market and at least in the short term…” said Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. Click here for the full article.

Jobs Report Preview (Too Hot is the Risk)

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What’s in Today’s Report:

  • Jobs Report Preview (Too Hot Is the Risk)
  • EIA Analysis  and Oil Market Update

Futures are modestly higher as markets digest yesterday’s dovish Fed rhetoric while data overnight was solid.

German Manufacturers’ Orders and Euro Zone Retail Sales both beat estimates, again implying the economic recovery in Europe is gaining momentum (this is positive for European stocks).

Fed officials repeated their dovish stance yesterday with Vice Chair Clarida reinforcing it’s not time to think about tapering despite rising inflation and strong growth.

Today focus will be on weekly Jobless Claims (E: 533K) and again markets will want to see them hold the gains of the past few weeks.  We also get numerous Fed speakers including (in order of importance): Williams (9:00 a.m. ET), Mester (1:00 p.m. ET), Bostic (1:00 p.m. ET) and Kaplan (10:00 a.m. ET) but we don’t expect any of them to materially move markets.