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The market has likely reached a “tipping point”

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The market has likely reached a “tipping point”: Sevens Report Co-Editor, Tyler Richey, Quoted in Morningstar

Stock-market rally has likely reached a ‘tipping point’ following spike in Wall Street’s ‘fear gauge’

A rising Vix coupled with a pickup in demand for bearish put options are signs that the market has likely reached a “tipping point” and could continue to soften in the weeks ahead, according to Tyler Richey, co-editor of Sevens Report Research, in a report shared with MarketWatch on Monday.

Richey suggested a repeat of the selloff that sent the S&P 500 down 10% between late July and late October of last year appears to be the most likely scenario for markets.

Also, click here to view the full MarketWatch article published on Morningstar on April 9th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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The Fed is going to cut at some point—but nobody knows when

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The Fed is going to cut at some point—but nobody knows when: Tom Essaye Quoted in Barron’s

Dow Drops 300 Points as Indexes Turn Down

Traders were looking ahead to Wednesday’s consumer price index. Sevens Report Research’s Tom Essaye says traders seem to be biding their time, making sure their risk tolerance is appropriate heading into the 8:30 a.m. CPI release, especially with not much in the way of economic data or earnings in the meantime.

“We’re at this point where we all know the Fed is going to cut at some point—but nobody knows when—and it’s all going to be up to the data,” he says. “And there’s really not a lot else to focus on. So we’re all just sort of lurched from one data point to the other in this market right now. This is the way it gets when you get to long drawn out transitions in policy.”

Also, click here to view the full Barron’s article published on April 9th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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.

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The Most Important Long-Term Market Indicator

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The Most Important Long-Term Market Indicator: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Most Important Long-Term Indicator for Markets
  • Remaining Catalysts This Week
  • Chart: 2-Yr Yield Quietly Breaks Out to New 2024 Highs

S&P futures are flat while Treasury yields are slightly lower and the dollar is little changed following a quiet night of news ahead of today’s critical U.S. CPI report.

In corporate news, TSM reported the fastest revenue growth since 2022, renewing some AI optimism in global markets.

The biggest catalyst of the day will hit before the bell with CPI (E: 0.3% m/m, 3.5% y/y) and Core CPI (E: 0.3% m/m, 3.7% y/y) being reported at 8:30 a.m. ET. Simply put, a “hot” print will be hawkish and bad for stocks; a “cool” print will be “risk-on.”

There are no other economic reports on the calendar, however, there is a 10-Yr Treasury Note auction at 1:00 p.m. ET and the monthly Treasury Statement (-$340B) will hit the wires at 2:00 p.m. ET. Both could move yields and impact stocks (higher yields will pressure equities).

Regarding the Fed, there are two speakers on the schedule today, Bowman right after CPI (8:45 a.m. ET), and Goolsbee mid-day (12:45 p.m. ET) before the March FOMC Meeting Minutes are released mid-afternoon (2:00 p.m. ET).

Any hawkishness in the speakers’ tone or language that points to “higher for longer” policy will be negative for stocks. Conversely, if a summer cut and three total 2024 rate cuts are reinforced that will support risk assets and rally stocks broadly.

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Investors are on edge that the Fed may delay rate cuts

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Investors are on edge that the Fed may delay rate cuts: Tom Essaye Quoted in Forbes

Jobs Report: Unemployment Hits 3.8% As Job Growth Pops

How the jobs report impacts market expectations for an eagerly anticipated cut to interest rates, a move which would stimulate economic growth and which is currently priced in to come in June. “Investors are on edge [that] the Fed may delay rate cuts from June until later in the summer (or late in 2024) if we get another hot employment report,” Sevens Report founder Tom Essaye explained ahead of the release.

Also, click here to view the full Forbes article published on April 5th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Lastly, 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 Preview: Good, Bad, Ugly

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CPI Preview: Good, Bad, Ugly: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, Ugly
  • Where to Find Rate Cut Probabilities

Stock futures are modestly higher this morning as the bond market steadies ahead of tomorrow’s key inflation data while financial newswires were mostly quiet overnight.

Overseas, Taiwan’s headline CPI fell sharply from 3.1% to 2.1% vs (E) 2.5% in March. Domestically, the NFIB Small Business Optimism Index dropped to 88.5 vs. (E) 89.9.

Looking ahead to today’s session, there are no economic reports today and no Fed officials are scheduled to speak which is setting up a fairly quiet morning in the markets.

The one potential catalysts on the calendar today is the 3-Yr Treasury Note auction at 1:00 p.m. ET. Equity markets are watching yields closely here, so if today’s auction is weak and yields move higher this afternoon that will weigh on stocks and other risk assets. However, moves should be limited as traders position into tomorrow’s inflation data.

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Why Did Stocks Drop Again?

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

What’s in Today’s Report:

  • Why Did Stocks Drop Again?
  • How High Can Gold Go?

Futures are bouncing modestly from Thursday’s afternoon selloff, following a quiet night of news and as investor look ahead to today’s jobs report.

Economic data overnight (German Manufacturers’ Orders and Euro Zone retail sales) slightly missed expectations but the numbers aren’t increasing growth worries.

Today the focus will be on the jobs report and expectations are as follows: 200K Job Adds, 3.9% Unemployment Rate, 4.1% y/y Wage Growth.  The risk for this market remains for a “Too Hot” report that shows strong job adds, low unemployment and hot wages, while a number modestly below expectations would be welcomed as “Goldilocks” and likely spur a rebound in stocks and bonds.

In addition to the jobs report, we also have several Fed speakers including Collins (8:30 a.m. ET), Barkin (9:15 a.m. ET), Logan (11:00 a.m. ET) and Bowman (12:15 p.m. ET). If their tone is hawkish, it could reduce June rate cut chances and increase volatility.

Sevens Report Quarterly Letter 

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A Four Way Assault on the Bullish Mantra

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A Four Way Assault on the Bullish Mantra: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Did Stocks Drop and What’s It Mean for Markets? (Four Reasons)
  • JOLTS Data Takeaways – “Solid Enough” for Now
  • Chart: The S&P 500 Violated It’s 2024 Uptrend Yesterday
  • Chart: The “Short-Vol Trade” Is Beginning to Unravel (More to Come)

Stock futures are lower again this morning as the hawkish money flows of early Q2 continue with the 10-Yr yield at YTD highs ahead of Powell’s speech on the economy today.

Economically, China’s Composite PMI met estimates at 52.7 while the EU’s “Narrow Core HICP” (their Core-CPI equivalent) favorably fell from 3.1% to 2.9% vs. (E) 3.0%.

Today, there are two important economic reports due out: The ADP Employment Report (E: 150K) before the open and then the ISM Services Index (E: 52.7). Good economic news has been bad for markets lately, so softening growth numbers and low/falling inflation metrics in today’s data are the best case scenario for stocks today.

Beyond the data this morning, there are several Fed officials scheduled to speak: Bowman (9:45 a.m. ET), Goolsbee (12:00 p.m. ET), Powell (12:10 p.m. ET), and Barr (1:10 p.m. ET).

Powell’s speech at Standford shortly after 12:00 p.m. (ET) will get the most attention as traders look for him to reiterate the key takeaways from the March FOMC meeting (likely summer rate cut, three cuts in 2024 expected). Any hints at “higher for longer” will add to the hawkish money flows that have been weighing on stocks so far in Q2.

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The key for the ISM manufacturing survey is stability

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The key for the ISM manufacturing survey is stability: Tom Essaye Quoted in Barron’s

Stock Futures Point to Record Highs as Investors Mull Cuts to Interest Rates

“The key for the ISM manufacturing survey is stability. An in-line or better than expected result will further reinforce that growth is resilient and likely support the early rally,” said Tom Essaye, founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on April 1st, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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.

Any surprises could move yields and impact equities

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Any surprises could move yields and impact equities: Tom Essaye Quoted in Barron’s

The Market Kicks Off the Day in the Green

“There are no Fed officials scheduled to speak today but there is a 5-Yr Treasury Note auction at 1:00 p.m. ET,” wrote Sevens Report Research’s Tom Essaye. “With the elevated level of market anxiety surrounding Friday’s Core PCE release (when markets will be closed) any surprises via strong or weak demand in the auction could move yields and impact equities.”

Also, click here to view the full Barron’s article published on March 26th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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.

Tom Essaye interviewed by Barron’s

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 Durable-goods number showed stable growth: Tom Essaye Interviewed by Barron’s

Market’s Spirit Isn’t Dampened by Mixed Economic Data

In an interview with Barron’s, Tom Essaye of Sevens Report Research said the durable-goods number showed stable growth while the consumer confidence reading was light.

“Every time the market is reminded that we’ve got stable growth, still falling inflation, a looming rate cut —which was reinforced last week—and positive AI headlines, the default reaction is to rally. And rightly so. And that’s exactly what’s happening today,” he said.

Essaye also called the collapse of Baltimore’s Francis Scott Key Bridge a “tremendous tragedy”and thinks the disaster could trickle into economic reports at a time when the Federal Reserve is watching all numbers closely.

“This is going to cloud some of the economic data, potentially, which has some risk associated with it because the data is really important right now,” Essaye said. “It will probably send some noisiness into the data. We’re just going to have to look through that as best we can over the next couple of months. That’s something to pay attention to.”

Also, click here to view the full Barron’s article published on March 26th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to RallyIf 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.