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The Economy: Landing or Crashing?

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The Economy: Landing or Crashing? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Economy:  Landing or Crashing?
  • Weekly Market Preview:  Will A September Rate Cut Become a Guarantee This Week?
  • Weekly Economic Data:  Inflation Back in Focus (CPI This Week)

Futures are little changed despite positive geo-political news over the weekend.

In France, the “far-right” National Rally party underperformed expectations and will not be the majority party, reducing the chances of radical French policy changes.

In the Middle East, chatter surrounding a cease-fire between Israel and Hamas continues to get louder and a deal could be announced soon.  That news is weighing on oil this morning.

This week will be an important one with two days of Powell testimony, the CPI report and the start of the Q2 earnings season, but today will be relatively quiet as there are no economic reports today and no Fed speakers.

Sevens Report Quarterly Letter

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Jobs Day

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Jobs Day: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Jobs Day
  • Why Wednesday’s Weak Economic Data Is Increasing Growth Concerns

Futures are little changed following the U.S. holiday as the last 24 didn’t provide any substantial market surprises while focus turns towards today’s jobs report.

The Labour Party won a landslide election victory in the UK, as expected, but that victory isn’t altering the outlook for growth or inflation (so it’s not impacting markets).

U.S. growth worries are creeping slightly higher following Wednesday’s surprisingly soft economic data.

Today focus will be on the jobs report and expectations are as follows: 189K Job-Adds, 4.0% Unemployment Rate, 0.3% m/m & 3.9% y/y Wage Growth.  Markets are still in a “bad is good” mode for data so the biggest risk to markets today is for a “Too Hot” number.  But, that said, Wednesday’s economic data was outright bad and for those paying attention, there are now a lot of signs that the U.S. economy may be losing more momentum than expected.  So, if there is a surprisingly weak jobs report (possible but unlikely) it will increase growth concerns and that’s a future risk to this rally.

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Jobs Report Preview

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

What’s in Today’s Report:

  • Jobs Report Preview
  • JOLTS Report Takeaways

Futures are slightly higher as Powell’s dovish comments continue to be digested amid more Goldilocks economic data overnight.

In Asia, Australian Retail Sales rose 0.6% vs. (E) 0.3% but China’s Services PMI dropped to 51.2 vs. (E) 53.4.

In Europe, the Eurozone Composite PMI fell to 50.9 vs. (E) 50.8 while the EU PPI fell -4.2% y/y vs. (E) -4.1%, both of which are helping bonds remain stable ahead of multiple important economic releases in the U.S. today.

Looking into today’s session we will first get more labor market data with the ADP Report (E: 161K) and Jobless Claims (E: 233K) releases before the open. The market is looking for as-expected numbers and any signs of material weakness or data that is “too hot” could trigger some profit taking in thin holiday trading with stock indices sitting on record highs.

At the top of the 10:00 a.m. hour Wall Street time, the ISM Services Index (E: 53.0) and Factory Orders (E: 0.2%) reports will be released. The ISM will be the release to watch with investors again looking for stability in the headline but also a favorable move lower in the prices subindex to help confirm the disinflation trend has indeed resumed.

There is also one Fed speaker today: Williams (7:00 a.m. ET) and the FOMC Minutes will be released at 2:00 p.m. ET which is after the NYSE’s early close (1:00 p.m. ET) ahead of the 4th of July holiday tomorrow.

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Examining the Market Impacts of Thursday’s Debate

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Examining the Market Impacts of Thursday’s Debate: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Examining the Market Impacts of Thursday’s Debate (What Happens If Biden’s Replaced?)
  • Weekly Market Preview:  Will Economic Data Keep Growth Concerns At Bay?
  • Weekly Economic Cheat Sheet:  Jobs Report Friday, ISM PMIs Today and Wednesday.

Futures are slightly higher ahead of a busy and holiday-shortened week of data, as French election results weren’t as bad as feared while global economic data was mixed.

National Rally slightly underperformed in the first round of voting in the French election and the other major parties have agreed to form a coalition to prevent it from becoming an outright majority, reducing French political risks.

Economically, EU and UK May Manufacturing PMIs were mixed but importantly didn’t raise any growth concerns.

This is a busy and important week for economic data as the reports will either increase growth concerns or push back on them.  Today the key report is the ISM Manufacturing PMI (E: 49.1) and the stronger this number, the better for markets.

Sevens Report Quarterly Letter Delivered Today!

Our Q2 ’24 Quarterly Letter will be released today.

We use our strength (writing about the markets) to help you:

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

You can view our Q1 ’24 Quarterly Letter here.

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Why Is NVDA Falling? (And Is It A Problem for the Market?)

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Hard Landing vs. Soft Landing Scoreboard: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Is NVDA Falling? (And Is It A Problem for the Market?)
  • EIA Update and Oil Market Analysis

Futures are slightly lower following several underwhelming earnings reports and ahead of important economic data.

Micron (MU) and Levi-Strauss (LEVI) missed earnings and are declining solidly pre-market and those disappointing results are weighing on futures.

Economically, it was a quiet night and none of the reports are moving markets.

Today focus will be on economic data and the key reports, in order of importance, are as follows: Jobless Claims (E: 236K), Durable Goods Orders (E: 0.0%), Final Q1 GDP (E: 1.4%) and Pending Home Sales (E: 1.9%).  Given some cautious commentary on the economy from corporate management (including this morning), markets will want to see solid data that meets or slightly exceeds expectations and if that’s the case, the broad markets should be able to rally (even despite some tech headwinds from MU).

Additionally, today is the first (and potentially only) Presidential Debate (9:00 p.m. ET) and the closer look at the two candidates’ policies could move markets on Friday.

Sevens Report Q2 ’24 Quarterly Letter Coming July 1st. 

The Q2 2024 Quarterly Letter will be delivered to advisor subscribers on Monday, July 1st.

We will deliver the letter on the 1st 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 Q1 ’24 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.

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Strong demand (lower yields) will reaffirm the dovish shift in Fed policy

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Strong demand will reaffirm the dovish shift in Fed policy: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stocks Open Mixed. Tech Is Bouncing Back.

“Strong demand (lower yields) will reaffirm the dovish shift in Fed policy expectations this month while weak demand (rising yields) could rekindle higher-for-longer policy rate worries and spark risk-off money flows,” writes Sevens Report Research’s Tom Essaye.

Also, click here to view the full Barron’s article published on June 24th, 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.

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AI enthusiasm remains alive, well and raging!

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AI enthusiasm remains alive, well and raging!: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Large-Cap Chip Stocks Are Down Again. Will This Trend Continue?

“AI enthusiasm remains alive, well and raging!” Tom Essaye, founder of the Sevens Report, wrote Monday. “…Recent AI-related tech company earnings have been strong and despite concerns, the actual earnings growth around AI companies (especially chip and cloud companies) remains extremely strong.”

Also, click here to view the full Barron’s article published on June 24th, 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.

Hard Landing vs. Soft Landing Scoreboard

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Hard Landing vs. Soft Landing Scoreboard: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard
  • Case-Shiller Home Price Index Continues to Rise: Chart
  • Consumer Confidence Report Highlights Uncertain Economic Outlook

U.S. equity futures are mixed as continued strength in tech shares is supporting gains in Nasdaq 100 contracts while both the Dow Industrials and Russell 2000 futures are lower amid higher yields in the wake of hot inflation data overnight.

Economically, Australian CPI came in hot with the headline jumping to 4.0% y/y vs. (E) 3.8%, up from 3.6% previously.

In Europe, Germany’s GFK Consumer Climate Index slipped to -21.8 vs. (E) -20.0 pointing to weakening sentiment.

Looking into today’s session there are no Fed speakers scheduled to speak and just one economic report to watch: New Home Sales (E: 650K).

There is a 5-Yr Treasury Note auction in the early afternoon (1:00 p.m. ET) and investors will want to see strong demand like we saw with yesterday’s 2-Yr auction to keep bond yields stable and near recent lows.

Finally, there is one earnings release worth noting today as Micron Technologies will report quarterly results after the close (E: $0.51) and with a lot of optimism surrounding tech and AI, results will need to meet or exceed expectations to keep the mega-cap tech rally alive.

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Is Q2 Sector Performance Warning About Growth?

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Is Q2 Sector Performance Warning About Growth? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is the Second Quarter Market Performance Warning About Economic Growth?
  • Trading Color – NVDA Declines Mask Broad Market Gains to Start the Week
  • Chart – Equal Weigh S&P 500 Unchanged From Early March

Futures are modestly higher this morning as mega-cap tech recovers some of yesterday’s losses in the pre-market with NVDA up over 3% amid an otherwise quiet night of news.

There were no notable economic reports or market moving catalysts overnight.

Today, investor focus will be on a combination of economic data, Fed speak, and a key Treasury auction

Economically, we will get Case-Shiller Home Price Index (E: 7.0%), the FHFA House Price Index (E: 6.7%), and Consumer Confidence (E: 100.0) releases this morning and there are two Fed speakers: Bowman (7:00 a.m. & 2:15 p.m. ET), Cook (12:00 p.m. ET).

In the afternoon, traders will await the results of a 2-Yr Treasury Note auction at 1:00 p.m. ET. Strong demand (lower yields) will reaffirm the dovish shift in Fed policy expectations this month while weak demand (rising yields) could rekindle higher-for-longer policy rate worries and spark risk-off money flows.

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Does the Bullish Mantra Still Work?

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Does the Bullish Mantra Still Work? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Does the Bullish Mantra Still Work?
  • Weekly Market Preview:  Upward Momentum Still in Control
  • Weekly Economic Cheat Sheet:  Friday’s Core PCE Price Index Is the Key Report This Week

Futures are little changed following a mostly quiet weekend of news.

Economically, the only notable report overnight was the German IFO Business Expectations and that slightly missed estimates (89.0 vs. 90.4).

Political risks in France eased over the weekend as Marine Le Pen’s National Rally party, which still leads in the polls, committed to fiscal restraint and pro-business policies.

This week contains some important updates on growth and inflation, but it starts quietly as there are no notable economic reports today and just one Fed speaker,  Daly (2:00 p.m. ET), and she shouldn’t move markets.

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