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Markets could get a bit ugly given recent tech weakness

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Markets could get a bit ugly given recent tech weakness: Sevens Report Editor, Tom Essaye, Quoted in Bloomberg

Tech Stocks Hit as Microsoft Down 6% in Late Hours: Markets Wrap

“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report.

Also, click here to view the full Bloomberg article published on July 29th, 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.

We’re staring at big catalysts

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We’re staring at big catalysts: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Tech Stocks Are Sliding Ahead of Key Earnings Reports

“There was not much going on yesterday and there isn’t a ton going on today, either,” Sevens Report Research’s Tom Essaye told Barron’s. “And we’ve had sort of big moves in the market, and we’re staring at big catalysts.”

Reports from Alphabet and Tesla may have lowered the bar for Big Tech, Essaye says. On the flip side, the megacap tech stocks have run up tremendously on high expectations for growth ahead driven by artificial intelligence. That changed in July, when tech stocks started to struggle to keep up as investors rotated from the sector to underperforming small-cap names.

“Investors are kind of more in a ‘show me’ mode now than they have been in a long time with these names,” Essaye says. “They want to see better earnings before they jump back in for fear that this rotation isn’t over.”

Also, click here to view the full Barron’s article published on July 30th, 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 RallyIf 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.

Technical Levels to Watch Today and Jobs Report Preview

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Technical Levels to Watch Today and Jobs Report Preview: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Technical Levels to Watch in the Wake of the Fed
  • Jobs Report Preview

Futures are solidly higher in pre-market trade with tech and AI-focused names leading after solid AMD earnings (stock up 9%) offset mildly disappointing results from MSFT (stock down 3%) while economic data was solid overnight and investors digest the BOJ’s decision to raise rates to the highest level since 2008.

Today, focus will be on economic data early with the ADP Employment Report (E: 154K), Employment Cost Index (E: 1.0%), and Pending Home Sales (E: 1.1%) all due to be released. Healthy employment and steady wage growth numbers will be critical to see for the soft landing narrative to persist.

From there, focus will turn to the Fed with the FOMC Meeting Announcement at 2:00 p.m. ET followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.

Earnings season also continues today with BA (-$1.68) and MA ($3.51) reporting before the open and META ($4.69), QCOM ($2.25), ALL ($0.33), and EBAY ($1.12) all due to release results after the close.

Join thousands 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.

FOMC Preview

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

What’s in Today’s Report:

  • FOMC Preview
  • Chart: Stocks Are Trading With an 85% Correlation to 2007

U.S. equity futures are tracking European stocks higher as traders look ahead to the Fed, big-tech earnings, and more important economic data due in the sessions ahead.

Economically, Japan’s Unemployment Rate fell to 2.5% vs. (E) 2.6% while the EU’s GDP Flash rose to 0.6% vs. (E) 0.5%. The reports are not meaningfully moving markets but seem to be easing recession fears to some degree in pre-market trade.

Looking into today’s session, there are two housing market reports due out early: Case-Shiller Home Price Index (E: 7.2%) and the FHFA House Price Index (E: 6.3%) before Consumer Confidence (E: 99.5) and JOLTS (E: 8.0 million) will be released after the opening bell.

The July FOMC meeting begins today so there are no Fed speakers which will likely bring a sense of “Fed paralysis” before tomorrow’s meeting announcement and Powell’s press conference.

That will leave trader focus on earnings with BP ($0.92), PG ($1.37) and PYPL ($0.97) all due to report before the open while AMD ($0.67), MSFT ($2.90), and SBUX ($0.93) will release results after the close.

Join thousands 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 Potentially Pivotal Week for the 2024 Bull Market

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A Potentially Pivotal Week for the 2024 Bull Market: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • A Potentially Pivotal Week for the 2024 Bull Market
  • Weekly Market Preview:  Important Updates on Growth, Rate Cuts and AI Enthusiasm
  • Weekly Economic Cheat Sheet:  Jobs Report Friday, Fed Wednesday.

Futures are solidly higher on momentum from Friday’s rally and following a mostly quiet weekend of news, as investors look ahead to an important week for economic growth, rate cut expectations and mega cap tech earnings.

Geopolitically, tensions increased between Israel and Hezbollah following an attack in the Golan Heights and subsequent Israeli retaliation, but for now it’s not moving oil markets.

This week will give us a lot of color on the state of economic growth and a check on market rate cut expectations, but the important events don’t start until tomorrow (MSFT & AMD earnings) as there are no notable economic reports today.

Looking deeper at earnings, about 40% of the S&P 500 reports this week, including several major mega-cap tech stocks, but those important reports don’t start until tomorrow.  Today, we’ll be watching: MCD (E: $3.08), ON (E: $0.92) and SFM (E: $0.77).

Join thousands 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 the Yen Carry Trade Become A Headwind on Markets?

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Is the Yen Carry Trade Become A Headwind on Markets?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is the Yen Carry Trade Become A Headwind on Markets?

Futures are seeing a solid bounce following a mostly quiet night of news as investors look ahead to (hopefully) another good inflation report.

Earnings remained broadly mixed overnight (some good, some bad) but none of the results are impacting markets.

There was no notable economic data or geo-political events overnight.

Today the focus will be on the Core PCE Price Index (E: 0.1% m/m, 2.5% y/y) and if this number is better than expected (or even dead in-line with expectations) that will remind investors that rate cuts are coming soon (September) and that should help extend this early rebound in stocks and bonds.

Earnings roll on although next week is, by far, the most important week of the season.  Reports we’re watching today include:  BMY (E: $1.64), MMM (E: $1.66) and CNC  (E: $2.42).

Join thousands 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.

None of this pullback includes growth worries

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None of this pullback includes growth worries: Tom Essaye Quoted in MarketWatch

Stock-market drop offers reminder that rate cuts can alarm investors too

So far, “none of this pullback includes growth worries, and that’s what we have to watch for to make this go from a pullback to something worse. I am still concerned about growth (and Dudley’s comments only make me more nervous) but the data over the past week has been ‘OK,” said Tom Essaye, founder of Sevens Report Research, in a note. “That said, we still need to watch growth very closely…”

Also, click here to view the full MarketWatch article published on July 25th, 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.

The ultimate direction of the S&P 500 will still be determined by economic growth

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The ultimate direction of the S&P 500 will still be determined by economic growth: Tom Essaye Quoted in Forbes

Stocks Slide As Major Tech Earnings Get Off To ‘Underwhelming’ Start

The U.S. will report its second-quarter gross domestic product Wednesday morning, offering a glimpse into how well the broader economy is performing. “The ultimate direction of the S&P 500 will still be determined by economic growth,” remarked Sevens Report analyst Tom Essaye in a Monday note.

Also, click here to view the full Forbes article published on July 24th, 2024. 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.

What is Causing This Pullback?

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What is Causing This Pullback?: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What is Causing This Pullback?
  • Yield Curve Update:  10’s-2’s Just Hit a Two-Year High
  • EIA Analysis and Oil Market Update

Futures are modestly lower as more mixed earnings are preventing a bounce in stocks.

Tech earnings were “ok” overnight (IBM and NOW posted good results) but other sectors’ results were weak, especially in the auto sector (Ford (F) is down 13% pre-market) and that’s weighing on futures.

Focus will remain on economic data and earnings today and the calendar is busy on both fronts.  Economically, the key reports today, in order of importance, are:  Jobless Claims (E: 235K), Final Q2 GDP (E: 2.1%), and Durable Goods (E: 0.3%).  Goldilocks economic data (so in-line with expectations across the board with no hints of inflation) would be a positive for stocks and help to slow this pullback.   But, if data is very soft or very strong, expect more downward pressure.

On the earnings front, results this season are, so far, very mixed and disappointing earnings are weighing on stocks.  Important results today include: AAL (E: $1.04), ABBV (E: $2.56), VLO (E: $2.61), LHX (E: $3.18) and BKR (E: $0.49).

Join thousands 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.

Dow Theory: Transports Sputter, Industrials Power On

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Dow Theory: Transports Sputter, Industrials Power On: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Dow Theory: Transports Sputter, Industrials Power On
  • Visual – Existing Home Sales Fall, Home Prices & Inventories Rise

Futures are lower thanks to soft earnings from Mag-7 members TSLA (down 7% premarket) and GOOGL (down 3% premarket) as well as soft economic data in Europe.

The Eurozone’s July Composite Flash PMI fell to 50.1 vs. (E) 51.0 with both the manufacturing and services components missing estimates (German data was notably weak).

Looking into today’s session, the U.S. Flash Composite PMI (E: 51.6) will be the market’s primary focus early in the day but New Home Sales (E: 644K) data is also due to be released shortly after the bell.

From there focus will likely revert to how the Mag-7 trades in the wake of yesterday’s weak tech earnings and follow through selling (like we are seeing in the pre-market) will be a drag on the major indexes.

There is also a 5-Yr Treasury Note auction at 1:00 p.m. ET that could impact markets (yesterday’s strong 2-Yr auction pushed yields lower).

Finally, there are a few notable earnings reports due after the close including: F (E: $0.64), CMG (E: $0.31), and IBM (E: $2.16) and the Fed’s Bowman is scheduled to speak at 4:05 p.m. ET.

Join thousands 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.