Above 4,600 in the S&P 500, markets have now traded through most fundamental bounds of valuation, and for this rally to continue, we’ll need to see real, actual positive events (not just events that aren’t as bad as feared)…Tom Essaye of The Sevens Report said in a note to clients Wednesday. Click here to read the full article.
Above 4,600 in the S&P 500, markets have now traded through most fundamental bounds of valuation, and for this rally to continue, we’ll need to see real actual positive events…Tom Essaye of the Sevens Report. Click here to read the full article.
Instead, it’s a signal that the bull market’s time is now limited… said market analyst Tom Essaye of the Sevens Report. Click here to read the full article.
What’s in Today’s Report:
Futures are slightly higher following a generally quiet weekend of news.
Geopolitically, there are calls for more sanctions on Russia as the international community is now accusing Russia of war crimes following the discovery of a mass grave outside of Kiev. Oil, which is the key proxy for additional sanctions, is only slightly higher, however, implying the market isn’t expecting significant additional sanctions in the near term.
Economic data was sparse as the only notable report was German exports which rose solidly (up 6.4%).
Today there are no notable economic reports and no Fed speakers, so the focus will be on geopolitics, and again any hints of progress towards a ceasefire will help extend the recent rally.
What’s in Today’s Report:
Futures are modestly higher ahead of today’s jobs report as markets bounce back from Thursday’s late-day selloff.
Markets dropped into the close yesterday but that was driven by quarter-end re-positioning and rebalancing, not be any news, so it’s being partially unwound this morning.
Economic data underwhelmed as the EU and UK March Manufacturing PMIs both slightly missed estimates.
Today’s focus will be on the Jobs Report and expectations are as follows: Job Adds: 490K, UE Rate: 3.7%, Wages: 0.4% m/m, 5.5% y/y). The estimates for the jobs report have crept higher the past two days so we slightly revised our “Too Hot” and “Just Right” ranges for today’s jobs report, and they are included inside today’s Sevens Report.
Outside of the jobs report, we also get the ISM Manufacturing PMI (E: 58.6), and markets will want to see stability in the data above all else (so no big miss vs. expectations). We also get one Fed speaker, Evans at 9:05 a.m. ET, but he shouldn’t move markets.
For Sevens Report Quarterly Letter subscribers, the Q1 ’22 Quarterly Letter and compliance back up will be delivered via email around mid-day today. If you are not a subscriber and are interested in the letter, please click this link to learn more.
Finally, today is April Fools Day, so be extra wary of any preposterous declarations from your family, friends, or colleagues.
What’s in Today’s Report:
Futures are slightly higher as oil drops sharply on reports the U.S. is considering a massive oil release from the Strategic Petroleum Reserve.
Reports hit overnight that the U.S. is considering releasing 180 million barrels of oil from the SPR over the coming six months, and oil is down 6% as a result.
Economic data was slightly underwhelming as the March Chinese manufacturing PMI dropped below 50 to 49.5.
Today focus will be on inflation, as we get the Fed’s preferred measure of inflation via the Core PCE Price Index (E: 0.4%, 5.5%). If these numbers slightly underwhelm vs. expectations, that could lead to more hope inflation pressures are finally peaking, and we could see a rally as a result. Today we also get Jobless Claims (E: 195K) and have one Fed speaker, Williams at 9:00 a.m. ET.
What’s in Today’s Report:
Stock futures are lower with EU shares amid negative economic forecasts, a deteriorating state of Russia-Ukraine negotiations, and growing concerns about the yield curve.
Geopolitically, the Kremlin stated that the latest talks have not been “promising” and much work still needs to be done which is weighing on risk assets and bolstering oil prices this morning.
Economically, Germany cut its GDP growth forecast to just 1.8% in 2022 from 4.6% previously and an EU economic sentiment survey missed estimates.
Looking into today’s session, focus will be on jobs and growth data early with the ADP Employment Report (E: 438K) and Final Q4 GDP report (E: 7.1%) due out before the bell.
Additionally, there are two Fed speakers: Barkin (9:15 a.m. ET) and George (1:00 p.m. ET) but based on this morning’s price action, geopolitics remain the most notable influence on markets, and sentiment towards the war in Ukraine will likely be the biggest driver of markets again today.
We must acknowledge the challenges ahead, and be ready with a plan to insulate ourselves from volatility and protect portfolios…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Markets are trading risk-on this morning after reported progress in ceasefire talks between Russia and Ukraine.
Russian officials said that the “primary objectives” of the latest round of peace talks with Ukraine have been completed and a deal may be announced in the coming hours which is driving stocks higher globally.
Looking into today’s session, there are a few economic reports due to be released: Case-Shiller Home Price Index (E: 1.0%), Consumer Confidence (E: 107.0), and JOLTS (E: 11.10M) while several Fed officials are scheduled to speak: Williams (9:00 a.m. ET), Harker (10:45 a.m. ET), and Bostic (6:30 p.m. ET).
There is also a 7-Yr Treasury Note auction at 1:00 p.m. ET that could move yields and more specifically impact the 10s-2s yield curve spread which has compressed down to single digits this morning.
Bottom line, the market’s primary focus is on Russia-Ukraine peace talks today and any meaningful progress towards a ceasefire will continue to support risk-on money flows while investors will watch economic data and Fed speak for any further signs that shift to a more aggressive policy stance is beginning to hurt growth.
Sevens Report Q1’22 Quarterly Letter Coming April 1st
The Q1 2022 Quarterly Letter will be delivered to advisor subscribers on Friday, April 1.
With several key macro issues coming to a head over the next three months, we believe the second quarter could be just as volatile as the first quarter.
We deliver the letter on the first business day of the new 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 Q4 ’21 Quarterly Letter here.
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Implying the Russia/Ukraine war wasn’t materially slowing growth…wrote Tom Essaye, founder of Sevens Report Research. Click here to read the full article.
