Posts

All Of Us In The Markets Are In A Proverbial Canoe

/in , /by

All Of Us In The Markets Are In A Proverbial Canoe: Tom Essaye Quoted in Courthouse News Service

Markets roar in 2023 as inflation ticks down and Fed eases rate hikes

Tom Essaye of the Sevens Report likened the market in 2023 to rough sailing. “I can’t help but feel as though all of us in the markets are in a proverbial canoe and the investing public is violently leaning to one side of the canoe and then the other, causing it to nearly tip each time,” he wrote in an investor’s note.

Essaye wrote that many believe the Fed will slash interest rates about six times next year, believing inflation will soon “go into some sort of freefall” and the S&P 500 may hit 5,000 points. “But I’ve been in this industry long enough to know that when everyone seems to be leaning on one side of the proverbial canoe, it pays to move to the middle,” he wrote.

Also, click here to view the full Courthouse News Service article published on December 29th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up 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 “Sitting On Big Gains”

/in , /by

The Market Is “Sitting On Big Gains”: Tom Essaye Quoted on BNN Bloomberg

Markets today: AI mania driving Nasdaq 100’s best run since 1999

The market is “sitting on big gains” and most participants just want the year to end to register those gains, according to Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.

“But I’ve been in this industry long enough to know that when everyone seems to be leaning on one side of the proverbial canoe, it pays to move to the middle.”

Warnings about a market that’s flashing overbought signals have been raising concern about a pullback, with some market observers saying that traders have gone too far, too fast in pricing in a dovish Fed pivot.

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

Two Differences In 2024 That Could Be Negative For Equity Markets

/in , /by

2 Differences In 2024: Sevens Report Analysts Quoted in Investing.com

Sevens Research sees 2 differences in 2024 that could be negative for equity markets

In its latest daily note, Sevens Report Research said there are two important differences for investors to consider in 2024.

“The market has priced in six Fed rate cuts and year-end 2024 fed funds below 4%,” analysts said.

“If we see the 10-year Treasury yield continue to fall to the low 3% or sub 3% range, that’s not going to be a major tailwind for stocks. Because that won’t be forecasting a dovish Fed, it’ll be forecasting slowing growth,” analysts explained. “And those falling yields will then become a harbinger of a potential economic slowdown and not the welcomed signal of a Fed that’s finally turning dovish.”

The second difference is that earnings results won’t have low expectations to excuse poor performance.

“Consensus S&P 500 earnings growth is nearly 10% year over year. Well above the longer-term averages of around 5%-ish annual growth. And keep in mind, at 4,800 the S&P 500 is trading over 19.5X that $245 earnings estimate, which means there’s little room for disappointment from a valuation perspective,” analysts explained. “Bottom line, ‘ok’ earnings won’t be good enough and we got a preview of that in the Q3 numbers.”

Also, click here to view the full Investing.com article published on December 27th, 2023. 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.

A Volatile Start to 2024, But Don’t Read Too Much Into It

/in , /by

A Volatile Start to 2024, But Don’t Read Too Much Into It: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • A Volatile Start to 2024, But Don’t Read Too Much Into It
  • SPDR Reveals Nearly 5% Divergence Between Best and Worst Sectors Yesterday
  • Chart – S&P Global Manufacturing PMI Remains in Contraction Territory

Stock futures are modestly lower and Treasury yields are extending their early 2024 gains as some of the dominant money flows from late last year continue to unwind to start 2024.

Economically, Germany’s Unemployment Rate held steady, as expected, at 5.9% in December which is not moving markets.

Today, trader focus will be on two key economic reports in early trade with the ISM Manufacturing Index (E: 47.2) and JOLTS (E: 8.75 million) report both due out shortly after the opening bell. Motor Vehicle Sales (E: 15.4 million) will also be released today.

Additionally, there is one Fed speaker: Barkin (8:00 a.m. ET) that will be closely watched ahead of the release of the December FOMC Meeting Minutes this afternoon (2:00 p.m. ET).

Bottom line, start-of-year portfolio rebalancing is likely to continue to dominate the tape today, however, if economic data comes in “Goldilocks” and the Fed Minutes don’t derail the market’s dovish policy expectations for 2023, stocks and bonds should both be able to stabilize as calendar-driven volatility begins to subside.

A Volatile Start

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.

Five Optimistic Market Assumptions for 2024

/in , /by

Five Optimistic Market Assumptions for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Weekly Market Preview – Five Market Assumptions to Know As We Start 2024
  • Weekly Economic Cheat Sheet – Jobs Report in Focus

Futures are moderately lower to start 2024 amid concerns about China’s economy and rising geopolitical tensions.

Economically, China’s government-issued PMI fell to 49.0 vs. (E) 49.6 in December while President Xi Jinping made some cautious comments on the state of the economy over the weekend that has poured cold water on Asian markets to start the year.

In Europe, the December PMI rose to 44.4 vs. (E) 44.2 but still points to a factory sector deep in contraction which reiterates very real recession risks in the Eurozone in 2024.

Geopolitical tensions are pushing oil prices higher to start the new year after the U.S. Navy sunk three Iran-backed Houthi vessels in the Red Sea this weekend.

Looking into today’s session, the Final U.S. December Manufacturing PMI (E: 48.2) will be in focus this morning and traders will want to see stability in the data in order for stocks to start the new year with an extension of the 2023 rally.

Sevens Report Quarterly Letter Delivered Today

Our Q4 ’23 Quarterly Letter will be released today. We use our strength (writing about the markets) to help you:

  1. Save time (an average of 4-6 hours per quarterly letter) and
  2. Show you’re on top of markets with impressive, compelling market analysis.

You can view our Q3 ’23 Quarterly Letter here. To learn more about the product (including price) please click this link.

If you’re interested in subscribing, please email info@sevensreport.com.

Market Assumptions

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.

Happy New Year

/in , /by

Happy New Year: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Happy New Year

Futures are little changed following a quiet night of news and ahead of the final trading day of the year.

Economically there was more evidence of global disinflation overnight as South Korea’s Core CPI fell to 2.8% vs. (E) 2.9% while Spain’s Core CPI also declined to 3.8% from 4.5%.

Geo-politically, there were no significant events overnight and the number of ships transiting the Suez Canal is rising again although tensions remain high.

Today there is one economic report, the Chicago PMI (E: 50.0), but barring a massive drop that shouldn’t move markets and we’d expect a mostly quiet trading on the final day of a good year in the markets and ahead of a long weekend.   From all of us at Sevens Report Research please have a happy and safe New Year.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q3 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.

Stocks Ended Last Week Higher

/in , /by

Stocks Ended Last Week Higher: Sevens Report Analysts Quoted in Investing.com

‘Last week’s price action is important for 2024,’ says Sevens Report

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

According to Sevens Report Research, last week’s price action is important for 2024, noting the increased volatility.

“Stocks ended last week higher but also saw the biggest drop in several weeks last Wednesday, and the reason for the increased volatility is notable and gives us some hints about what could move markets early in 2024,” the firm wrote.

“Last Wednesday’s volatility does bring up two issues we need to watch: 1) Earnings disappointment and 2) The total lack of a ‘Wall of Worry,'” they added. While they are not bearish to start 2024 and believe the underlying fundamentals of the market are “still clearly positive.” the firm thinks investors are too complacent with this market as we begin the new year.

Also, click here to view the full Investing.com article published on December 28th, 2023. 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.

Five Measurable Similarities To 2006/2007

/in , /by

Five Measurable Similarities To 2006/2007: Sevens Report Analysts Quoted in Investing.com

Sevens Report Research sees similarities to 06/07, market susceptible to bouts of sudden volatility

Sevens Report Research said in its morning note on Friday that they see “five measurable similarities to 2006/2007.”

The firm explained that answering the question regarding what lies ahead for the stock market and bond market in 2024 is especially difficult right now, considering “the slew of mixed signals we are facing as we approach the end of 2023.”

“A few of those notable signals include 1) The deepest yield curve inversion since 1981, 2) The highest real interest rates since 2008, 3) Unexpectedly resilient economic data with Real GDP pushing 5% in Q3, 4) Stocks testing all-time highs, and 5) A historically complacent VIX reading,” they stated.

“But these are not unprecedented dynamics, and frankly, they’re reminiscent of the time period spanning 2006 and 2007,” said the firm.

“As long as the market’s fundamental consensus is uncertain and lacks conviction, which remains the case right now, this market will be susceptible to pullbacks and bouts of sudden volatility,” claims the firm.

Also, click here to view the full Investing.com article published on December 22nd, 2023. 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.

Two Important Differences in 2024

/in , /by

Why Last Week’s Price Action is Important for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Two Important Differences in 2024

Futures are little changed following a generally quiet night of news as there was no notable economic data or significant market moving events.

Chinese industrial profits rose 29.5% in November, accelerating substantially from the 2.7% gain in October and offering some anecdotal optimism about future growth.

Geo-political tensions remained elevated in the Mid-East following increased attacks on U.S. troops in the region, but no specific escalation occurred overnight.

Today the most notable event is a five-year Treasury bond auction and markets will want to see strong demand (like we saw at yesterday’s two-year auction) to keep rates drifting lower and dovish Fed/lower rates momentum in place through year-end.

Sevens Report Q4 ’23 Quarterly Letter

The Q4 2023 Quarterly Letter will be delivered to advisor subscribers on Tuesday, January 2nd.

The S&P 500 will end 2023 close to all-time highs but the Santa rally has left many investors complacent towards risks in 2024.  Showing clients and prospects a balanced view of markets is an opportunity to differentiate yourself from your competition and strengthen client relationships!

We will deliver the letter on the first business day of the quarter because we want you to be able to send your quarterly letter before your competition (and with little to no work from you).

You can view our Q3 ’23 Quarterly Letter here.

To learn more about the product (including price) please click this link, and if you’re interested in subscribing please email info@sevensreport.com.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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 Last Week’s Price Action is Important for 2024

/in , /by

Why Last Week’s Price Action is Important for 2024: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Last Week’s Price Action Is Important for 2024.

Futures are slightly higher following a mostly quiet holiday weekend and on more signs inflation is falling globally.

Singapore’s CPI dropped to 3.6% vs. (E) 3.9% yoy and down handily from 4.7% in October, providing more evidence that inflation is declining globally.

Geo-politically, U.S./Iran tensions rose after U.S. forces struck Iranian backed militants in Iraq, although oil (the best geo-political barometer) is little changed on the news.

Today will be a quiet day as most European markets and Hong Kong are closed, but there are two notable housing reports we’ll be watching: Case-Shiller Home Price Index (E: 0.06% m/m, 5.0% y/y) and the FHFA House Price Index (E: 0.5%).  Declines is housing prices is part of the reason investors remain convinced CPI will continue to fall in early 2024 so these home price metrics need to show declines in housing prices, otherwise investors may be too optimistic on falling CPI and Fed rate cuts in the new year.

Annual Discounts on Sevens Report, Alpha, Quarterly Letter, and Technicals.

If you have unused pre-tax research dollars, we offer month-free discounts on all our products. If you would like to extend current subscriptions or save money by upgrading to an annual subscription, please email info@sevensreport.com.

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.