Posts

Why Didn’t Stocks Rally Last Week? (Despite Good News)

/in , /by

Why Didn’t Stocks Rally Last Week? (Despite Good News): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Didn’t Stocks Rally Last Week (Despite Good News)
  • Weekly Market Preview:  Is the Tech Rally Finally Exhausted?
  • Weekly Economic Cheat Sheet:  Focus on Inflation This Week

Futures are slightly lower mostly on momentum from Friday’s declines following a very quiet weekend of news.

Economically, the only notable number over the weekend was Chinese CPI, which rose more than expected (0.7% vs. (E) 0.3%) and that’s being seen as a positive as deflation was a growing risk in the Chinese economy.

Focus this week will remain on economic data (both inflation and growth) and tomorrow’s CPI report is the key report for the week.

Today, however, the calendar is sparse as the only notable economic report is New York Fed Inflation Expectations (E: 3.00%) and barring a major overshoot, this number shouldn’t move markets.

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 (Higher “Too Hot” Limits)

/in , /by

Jobs Report Preview (Higher “Too Hot” Limits): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview (Higher “Too Hot” Limits)

Futures are little changed ahead of the jobs report and following a mostly quiet night of news.

Tech earnings were mixed as semi-conductor/AI linked stocks AVGO and MRVL earnings underwhelmed and both stocks are lower pre-market (-2% and -5% respectively).

Economically, ECB member Francois de-Villeroy said a rate cut in April or June is “very likely” further reinforcing expectations for summer rate cuts from global central banks.

Today focus will be on the jobs report and expectations are as follows:  190K Job Adds, 3.7% Unemployment Rate, 0.3%/4.3% Wage Growth.  Powell and other Fed members sound committed to rate cuts barring a bounce back in inflation so for the jobs number to be “Too Hot” we’ll need to see strong job adds, wage gains and low unemployment.  Barring “hot” numbers across those metrics, the jobs report likely won’t materially reduce June rate cut expectations.  If it does, however, expect a real uptick in volatility.

Finally, there’s one Fed speaker today, Williams at 7:00 a.m. ET, but he shouldn’t move markets.

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 (Will June Cuts Still Be Expected?)

/in , /by

Jobs Report Preview: Is There a Disconnect? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Report Preview (Will June Cuts Still Be Expected?)
  • EIA Analysis and Oil Market Update

Futures are slightly higher following a generally quiet night of news as markets look ahead to tomorrow’s jobs report.

Economically, the only notable number overnight was German Manufacturers’ Orders and it badly missed expectations (-11.3% vs. (E ) -6.0%) but it isn’t impacting markets.

Japanese stocks fell sharply (Nikkei down more than 1%) as “chatter” grew louder the BOJ may hike rates in March.

Today is a relatively busy day of events but it’ll take some significant surprises to move markets ahead of tomorrow’s jobs report.

The key events today, in order of importance, are:   ECB Rate Decision (No change is expected but will Lagarde point to June cuts?), Jobless Claims (E: 215K, will they keep rising?), Unit Labor Costs (E: 0.7%), Powell’s Senate testimony (10:00 a.m. ET) and Cleveland Fed President Mester (11:30 a.m. ET).

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 AI Craze Is A Modern Gold Rush

/in , /by

The AI Craze Is A Modern Gold Rush: Tom Essaye Quoted on BNN Bloomberg

Markets today: tech giants drag down U.S. stocks after torrid rally

“The AI craze is a modern gold rush, and the tech ‘picks and shovels companies’ are seeing earnings explode as companies buy chips and cloud space to fuel the boom,” said Tom Essaye, founder of The Sevens Report. “But if AI doesn’t result in increased profitability for the rest of the S&P 500 over the coming years, then demand for AI chips will evaporate as will AI-related cloud demand.”

Also, click here to view the full BNN Bloomberg article published on March 4th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

BNN Bloomberg logo

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.

This will be a potentially busy week of catalysts

/in , /by

This will be a potentially busy week of catalysts: Tom Essaye Quoted in Barron’s

Stocks Open Lower as Bond Yields Rise

“This will be a potentially busy week of catalysts but it starts slowly today as there are no economic reports and just one Fed speaker,” writes Sevens Report Research’s Tom Essaye. “So, absent any surprises, expect yields to drive stocks. If the 10-year Treasury yield drifts lower, don’t be surprised if stocks recoup these early losses.”

“We think Powell will hold his ground and not try to give anything away,” writes Andrew Brenner, head of international fixed income at NatAlliance Securities. “He won’t be that hawkish or show signs of dovishness, although we see Powell as a dove in wolf’s clothing.”

Also, click here to view the full Barron’s article published on March 4th, 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 Rally

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.

Today focus will be on the ISM Manufacturing PMI

/in , /by

Today focus will be on the ISM Manufacturing PMI: Tom Essaye Quoted in Barron’s

Stocks Waver After S&P, Nasdaq End February at Record Levels

Today focus will be on the ISM Manufacturing PMI (E: 49.5) not just because of the headline reading (can it break above 50?) but also because of the price index,” writes Sevens Report Research’s Tom Essaye. “The price index jumped to the highest level since April last month and if that increase continues, it’ll likely be modestly positive for yields and negative for stocks.”

Also, click here to view the full Barron’s article published on March 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 Rally

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 market is mostly in a holding pattern to start the week

/in , /by

The market is mostly in a holding pattern to start the week: Tom Essaye Quoted in Barron’s

Nasdaq Snaps 2-Day Losing Streak

“The market is mostly in a holding pattern to start the week,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview. “The big numbers come on Thursday, with all these inflation updates.

It is not just in the U.S. with core PCE, but also in Europe. Depending on what happens there will dictate whether or not this market can grind higher.”

Also, click here to view the full Barron’s article published on February 27th, 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 Rally

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.

Why the Tech Sector Is Like a Modern Day Gold Rush

/in , /by

Why the Tech Sector Is Like a Modern Day Gold Rush: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why the Tech Sector Is Like a Modern Day Gold Rush
  • Chart: Rising Market-Based Inflation Expectations Bolster Gold Prices

U.S. futures are modestly lower this morning as Chinese economic concerns are offsetting a cool EU inflation print.

A sizeable new wave of Chinese stimulus actions failed to soothe investor worries about the economy overnight, underwhelming investors as China’s Service PMI unexpectedly fell to 52.5 vs. (E) 52.9 in February.

In Europe, financial news flow was better as the EU Composite PMI rose to 49.2 vs. (E) 48.9 while PPI fell a steep -0.9% vs. (E) -0.1% helping to ease some recent worries about a resurgence in price pressures.

Looking into today’s session there are three domestic economic reports to watch: Composite PMI (E: 51.4), Factory Orders (E: -3.0%), and the ISM Services Index (E: 53.0). The ISM print will be the most important as investors will be looking for continued strength in consumer spending but steady or easing price indices to underscore disinflation has not stalled/reversed.

There are no Fed officials scheduled to speak today and with Powell’s testimony looming tomorrow a slow churn in markets or modest continuation lower could play out today as short term traders book profits from the most recent run to record highs.

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 A Teflon Market? (No. Here’s Why)

/in , /by

Is This A Teflon Market? (No. Here’s Why): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is This A Teflon Market? (No. Here’s Why)
  • Weekly Market Preview:  Can Data and Fed Speak Extend the Rally?
  • Weekly Economic Cheat Sheet:  All About Employment (Jobs Report Friday among others).

Futures are slightly lower following quiet weekend of news as markets digest Friday’s rally.

Geopolitically, hope is growing for a six-week ceasefire in Gaza that could be announced in the coming days and that’s modestly weighing on oil prices.

The S&P 500 will become even more “AI” sensitive as SMCI  (Super Microcomputer) will in added to the S&P 500, incrementally increasing tech exposure to the index.

This will be a potentially busy week of catalysts but it starts slowly today as there are no economic reports and just one Fed speaker, Harker at 11:00 a.m. ET.  So, absent any surprises, expect yields to drive stocks.  If the 10-year Treasury yield drifts lower, don’t be surprised if stocks recoup these early losses.

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.

“It doesn’t mean the economy’s rolling over”

/in , /by

Tom Essaye Interviewed by Barron’s

Stocks Are in a Holding Pattern. It’s All About Inflation Data.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that recent economic data, including durable goods and retail sales, have come in softer than expected.

“It doesn’t mean the economy’s rolling over,” he says. “But for a market that is priced for zero slowdown whatsoever, that is the risk that I think people need to watch. About the most surprising thing that I feel could happen to this market right now is that growth suddenly slows.”

“They’re behaving for now, but if you start seeing the 10-year climb far above 4.25%, I think that begins to become a headwind on the market,” Essaye says. “Until we get that inflation data, you kind of got markets in a bit of a holding pattern.”

Also, click here to view the full Barron’s article published on February 27th, 2024. 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.