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Jobs Report Preview

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Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview (How Bad Would a Too Hot Number Be for Markets?)
  • Why Oil Dropped

Futures are modestly lower on slightly stagflationary foreign economic data while investors digest Wednesday’s bounce and look ahead to tomorrow’s jobs report.

Economically, foreign data hinted at stagflation again as Taiwan and South Korean CPIs rose slightly more than expected while German exports missed estimates (-1.2% vs. (E) – 0.6%).

Today focus will remain on data and Fed speak.  The key economic report is Jobless Claims (E: 210K) and at this point, the higher the better for stocks.  We also have numerous Fed speakers today including Mester, Barkin, Daly, and Barr.  However, none of them are Fed “leadership” so unless they provide surprise comments they shouldn’t move markets.

Jobs Report Preview

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Upward Pressure in Treasury Yields

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Upward Pressure in Treasury Yields: Tom Essaye Quoted in Barron’s

Stock Futures Slide as Bond Yields Keep Rising

Firstly, “Markets want to see Congress take some actual steps towards curbing spending and addressing the long-term fiscal issues facing the country,” wrote Tom Essaye, president of Sevens Report Research. “In order for that to happen, the Congress needs to function relatively normally, and that’s in doubt.”

“That doubt is adding to the upward pressure in Treasury yields. While that is not the only reason yields have risen, it is a contributing factor that the sooner the markets get more confidence in Congress being able to function properly, the sooner it removes a tailwind on Treasury yields (that will be good for stocks),” he continued.

Also, click here to view the full Barron’s article published on October 3rd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Upward Pressure in Treasury Yields

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Why Are Yields Rising?

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Why Are Yields Rising? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Are Yields Rising?
  • What the Removal of Speaker McCarthy Means for Markets (We Didn’t Need This Right Now)
  • JOLTS Data Takeaways
  • OPEC+ (JMMC) Meeting Preview

U.S. stock futures are rebounding from overnight losses as European markets turn positive following mixed economic data while yields are stabilizing after this week’s rapid rise.

Markets are continuing to digest the implications of the removal of McCarthy as Speaker of the House. Yields were initially higher overnight, likely on worries of a more pronounced threat of a government shutdown next month. They have since stabilized and are only little changed in morning trade, helping support steady stock futures in the pre-market.

Economically, the September EU Composite PMI came in at 48.7 vs. (E) 48.4, while Retail Sales fell -1.2% vs. (E) -0.2% in August and PPI fell a steep -11.5% vs. (E) -11.7%. On balance, the data was not a reason for the ECB to become more hawkish. Which is helping global bond markets (and equities) stabilize this morning.

Today, focus will be on economic data early with the ADP Employment Report (E: 150K), ISM Services Index (E: 53.5), and Factory Orders (E: 0.2%). The “hot” JOLTS headline roiled markets yesterday so markets are likely to welcome any cooling labor market indicators and look for easing price measures in the ISM release as those developments could help bonds bounce back and stocks recover some of this week’s losses.

Later, the focus will turn to central bank speak with several Fed officials scheduled to speak including: O’Neill Paese, Schmidt, Bowman, and Goolsbee. A lot of hawkish rhetoric has been digested in recent sessions. So any more dovish-leaning commentary would also be welcomed by stocks and other risk assets.

Why Are Yields Rising

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Copper Could Recover And Signal A Relief Rally

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Copper Could Recover: Tom Essaye Quoted in Barron’s

Copper Prices Have Tumbled. Is a Global Recession Coming?

That’s why, for copper, “there is key 2023 support between $3.57 and $3.62 [per pound] that will be in focus near term,” wrote Sevens Report’s Tom Essaye. “If it holds, copper could recover and signal a relief rally developing in risk assets more broadly but a violation would be a negative signal for global markets.” 

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 28th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Copper Could Recover

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.

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Stock Futures Waver With Bond Yields

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Encouraging Inflation Data: Tom Essaye Quoted in Barron’s

Stock Futures Waver With Bond Yields, Oil in Focus

U.S. stock futures wavered on Thursday, whipsawing after the release of economic data, though sentiment remained under pressure from a surge in bond yields and the price of oil amid ongoing concerns over interest rates and inflation.

“Encouraging inflation data from Europe was partially offset by ongoing government shutdown and labor strike worries,” said Tom Essaye, the founder of Sevens Report Research.

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 28th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Encouraging Inflation Data

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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What the Near Government Shutdown Means for Markets

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Government Shutdown Means for Markets: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What the Near Government Shutdown Means for Markets (Higher Yields)
  • ISM Manufacturing Index Takeaways – Better Than Feared

Futures are little changed this morning. More evidence of cooling inflation was offset by global central bankers continuing to threaten more rate hikes.

Economically, Swiss CPI came in at 1.7% vs. (E) 1.8% y/y in September. The Core figure fell to 1.3% from 1.5% previously which was the latest report to confirm the ongoing trend of global disinflation.

The RBA held policy rates steady at 4.10% overnight. But joined the growing chorus of ECB and Fed officials who have reiterated future hikes on the table. Global yields edged higher in early trade which is keeping a lid on equity futures this morning.

Looking into today’s session, we will receive data on Motor Vehicle Sales (E: 15.3 million). But more importantly, jobs week kicks off with today’s JOLTS release which is expected to show 8.9 million job openings.

An inline or modestly lower-than-expected JOLTS headline would be welcomed as it would help dial back some of the recent hawkish money flows. While an unexpected increase could spark a continued rise in yields, adding pressure to equity markets.

Finally, there is a 52-Wk Treasury Bill auction at 11:30 a.m. ET and while we typically do not monitor Bill auctions too closely, stocks came for sale and yields rose right at 11:30 a.m. yesterday. When the results of a 3-Month and 6-Month Bill auction hit the wires with higher yields than previous (hawkish). So if we see weak demand and higher yields in the late morning auction today, that could be a drag on equities and other risk assets.

What the Near Government Shutdown Means for Markets (Higher Yields)

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Seeing the Forest for the Trees in Today’s Market

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Seeing the Forest for the Trees in Today’s Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Seeing the Forest for the Trees in Today’s Market
  • Weekly Market Preview:  Do Expectations for a Soft-Landing Shift This Week?
  • Weekly Economic Cheat Sheet:  An Important Week:  ISM PMIs and the Jobs Report Friday

Futures are little changed as Congress passed a short-term funding bill and avoided a shutdown while global manufacturing data largely met expectations.

The House passed the Senate’s “continuing resolution” to fund the government over the weekend, avoiding a shutdown.  However, funding only lasts until November 17th.

The Chinese Sept. Manufacturing PMI rose to 50.2 vs. (E) 50.0 while EU and UK readings were in-line with estimates.

Today focus will be on economic data and Fed speak.  The key report today is the ISM Manufacturing PMI (E: 47.8) and markets will want to see this number move closer to 50 and hint at an end to the manufacturing recession.  A further drop from here would be an incremental negative.  On the Fed, we hear from Powell & Harker at 11:00 a.m. and Williams at 1:30 p.m. and any hints from them that the Fed is likely done with rate hikes will be welcomed by markets.

Sevens Report Quarterly Letter Delivered Today

Our Q3 ’23 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

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Also, you can view our Q2 ’23 Quarterly Letter here

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Stock Futures Are Bouncing

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Improvement in Chinese Economic Data: Sevens Report Analysts Quoted in Barron’s

Stock Futures Rebound After Selloff

“Stock futures are bouncing back modestly and bonds are stable this morning amid improvement in Chinese economic data,” said Tom Essaye, the founder of Sevens Report Research.

Also, click here to view the full Barron’s article on stock futures are bouncing published on September 27th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Stock Futures Are Bouncing

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Government Shutdowns Impact

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Government Shutdowns Impact: Tom Essaye Quoted in Forbes

Government Shutdown Would Slow U.S. Economy

Sevens Report’s Tom Essaye wrote to clients last week despite the “ominous” nature of the term, government shutdowns “don’t impact enough people or last long enough to have a lasting macroeconomic impact,”.

Also, click here to view the full Forbes article published on September 27th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Government Shutdowns Impact:

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.

Sectors To Hide In The Current Market

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Tom Essaye Joins BNN Bloomberg

Healthcare, consumer staples, and utilities are best sectors to hide in current market: Essaye

Tom Essaye, president of Sevens Report Research, shares why Anthropic investment is good for Amazon, tech sector will continue to lead markets, and defensive sectors such as Healthcare, consumer staples, and utilities are sectors to hide in the current market.

Also, click here to watch the full BNN Bloomberg video published on September 26th, 2023. However, to see Tom’s full comments on the current market environment in our daily report sign up here.

sectors to hide in the current market.

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.