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Three Technical “Cs” for a Lasting Market Bottom

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What’s in Today’s Report:

  • Three Technical “Cs” for a Lasting Market Bottom

Futures are sharply lower on continued momentum from Thursday’s late day drop and following hot German inflation data and strong UK retail sales.

German CPI didn’t decline as much as hoped, falling –1.0% vs. (E) -1.6% and rising 17.8% vs. (E) 16.0%.  UK Retail Sales were also better than expected (0.5% vs. (E) -0.3% and the two reports are combining with yesterday’s hot US PPI to push rate hike expectations higher.

Today focus will remain on data and Fed speak.  The two notable economic reports are Import & Export Prices (E: -0.1%, -0.2%) and Leading Indicators (E: -0.3%).  The first deals with inflation and the second deals with growth, and if inflation is hot and growth is cool, expect more selling pressure.

There are also two Fed speakers today, Barkin (8:30 a.m. ET) and Bowman (8:45 a.m. ET) and we should expect them to sound hawkish (as most Fed speakers have been this week).

Sevens Report Co-Editor Tyler Richey Quoted in MarketWatch on February 14th, 2023

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Oil traders hit ‘sell button’ with U.S. set to release more crude from its Strategic Petroleum Reserve

The release plans were part of a congressional-mandate related to annual budgets that has been in place for almost a decade, Tyler Richey, co-editor of Sevens Report Research, told MarketWatch. But “when traders see an SPR release headline cross the wires, they think ‘more supply on the market’ and hit the sell button first and ask questions later.” Click here to read the full article.

Technical Update: Is This Another Bull Trap?

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What’s in Today’s Report:

  • Technical Update:  Is This Another Bull Trap?
  • EIA Analysis and Oil Market Update

Futures are flat following a quiet night and as solid CSCO earnings are helping stocks hold yesterdays’ gains.

CSCO beat estimates and raised guidance and the stock is up 4% pre-market and that’s helping broader sentiment.

Economically, the only notable number was the Chinese Home Price Index (in-line at –1.5%).

Today focus will remain on economic data and the key reports are (in order of importance):  Philly Fed (E: -7.2), PPI (E: 0.4%m/m, 5.5% y/y), Jobless Claims (E: 200K) and Housing Starts (E: 1.365M).  As has been the case, solid data that implies a “No Landing’ scenario should support stocks, as long as yields don’t spike too much.

We also have several Fed speakers today including Mester (8:45 a.m. ET), Bullard (1:30 p.m. ET) and Cook (4:00 p.m. ET) although they shouldn’t move markets.

Market Multiple Levels: S&P 500 Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart (Printable/Shareable PDF Available)
  • NY Fed Inflation Expectations Data Takeaways
  • Key Levels to Watch Today in the Dollar and Treasuries

Stock futures are modestly higher thanks to good economic data overnight as traders await today’s U.S. CPI report and more Fed speak.

Economically, the U.K.’s Unemployment Rate held steady below 4% but wage growth favorably slowed to 5.9% in January from 6.5% in December.

Meanwhile the NFIB Small Business Optimistic Index in the U.S. met estimates at 90.3 which saw S&P 500 futures hit new pre-market highs at the top of the 6:00 a.m. hour ET.

Today, focus will be on economic data early with CPI (E: 0.5% m/m, 6.2% y/y) and Core CPI (E: 0.3% m/m, 5.5% y/y) due out before the opening bell. Cooling inflation pressures have largely been priced in recently so a low print could see stocks add to YTD gains, but the risk is for a hot print to spark a significant wave of selling amid further hawkish shifting money flows across asset classes.

Moving through the day, there are three Fed speakers to watch: Logan (11:00 a.m. ET), Harker (1:00 p.m. ET), and Williams (2:05 p.m. ET) and they will all likely echo the hawkish tone coming from other Fed officials recently but their comments should not have a major impact on markets.

Earnings season is winding down but a few notable companies reporting today include: KO ($0.45), MAR ($1.84), ABNB ($0.27).

Tom Essaye Quoted in Blockworks on February 9th, 2023

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Analysts Warn Investors to Taper Expectations for 2023 Returns

Markets should be poised for a higher open, as they want to see claims begin to rise over the coming weeks, otherwise it’ll imply the labor market remains much, much too tight, Tom Essaye, founder of Sevens Report Research, said. Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in MorningStar on February 8th, 2023

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Oil futures close up a third straight session as U.S. data hint at higher demand

Overall, “an improving outlook for the health of the U.S. economy in the wake of the January jobs report, and ongoing optimism about the positive demand impact of China’s rapid reopening process are offering support to global oil markets right now,” said the Sevens Report’s Richey. Click here to read the full article.

Sevens Report Co-Editor, Tyler Richey, Quoted in MarketWatch on February 8th, 2023

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Oil futures up a third consecutive session on expectations for higher demand

The data, however, also showed “some evidence of improving consumer demand for refined products,” said Tyler Richey, co-editor of Sevens Report Research, with the four-week moving average of gasoline supplied up by just over 200,000 barrels a day to 8.3 million barrels a day. Click here to read the full article.

Tom Essaye Interviewed by Financial Sense on February 10th, 2023

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Tom McClellan: End of Bear Market Rally; Mike McGlone on Commodities, Gold, and Bonds

Now, Tom says, that ‘bear market rally’ is complete—having fooled enough people into thinking the bear market was over—and predicts more volatility and turbulence ahead with the big moves in tech to lead the major US indices lower. Click here to listen to the full interview.

Tom Essaye Quoted in Barron’s on February 10th, 2023

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Dow Rises, but Higher Bond Yields Weigh on Tech Stocks

“Global bond yields moved higher after Nikkei reported Kazuo Ueda will become the next BOJ governor, and not the ultra-dove Masayoshi Amamiya (who was expected),” wrote Sevens Report’s Tom Essaye. Click here to read the full article.

Tom Essaye Interviewed on BNN Bloomberg on February 10th, 2023

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Uber is being rewarded for its diversification strategy amid a growth slowdown: Tom Essaye

Tom Essaye, founder and president of Sevens Report Research and Andrew McCreath, founder at Forge First Asset Management, join BNN Bloomberg to discuss the latest large-cap earnings reports. Essaye says that Uber’s strength this season is a signal that life is getting back to normal and discusses how diversification will be imperative for companies to succeed amid the growth slowdown. Click here to watch the full interview.