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Is Gasoline Demand Another Economic Warning Sign?

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Is Gasoline Demand Another Economic Warning Sign? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Is Gasoline Demand Another Economic Warning Sign?
  • Did Earnings Season Change the Market Outlook?

Futures are solidly higher thanks to continued momentum from Thursday’s rally following a quiet night of news.

Economically, UK data was stronger than expected (GDP and Industrial Production beat estimates) but it’s not changing BOE June rate cut assumptions.

Today there is just one notable economic report, the University of Michigan Consumer Sentiment Index (E: 77.0) and the key parts of that release will be the 1-Yr Inflation Expectations (E: 3.2%) and the 5-Yr. Inflation Expectations (E: 3.0%).  If both of those numbers are higher than expected, it’ll be another negative signal on inflation and don’t be surprised if Treasury yields rise in response to them and stocks give back these early gains.

In addition to that one economic report, we also get numerous Fed speakers today including: Bowman (9:00 a.m. ET), Logan (10:00 a.m. ET), Kashkari (10:00 a.m. ET), Goolsbee (12:45 p.m. ET) and Barr (1:30 p.m. ET).  However, unless one of them explicitly advocates for rate hikes, they shouldn’t move markets.

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There are only really three important weeks of earnings season

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There are only really three important weeks of earnings season: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Dow, S&P 500 Tick Higher

“There are only really three important weeks of earnings season, and Disney comes the week after it,” Sevens Report Research’s Tom Essaye told Barron’s. “It sort of puts a bow on earnings season, but it’s not like Disney is really that representative of the broader economy.”

“The global market has convinced themselves that that the [European Central Bank] and the BOE are going to cut in June,” Essaye says. “And if the Bank of England pushes back on that, I think could be a little bit of a negative surprise.”

Also, click here to view the full Barron’s article published on May 7th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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What Are The GRANOLAS and Why Are They Attractive?

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What Are The GRANOLAS and Why Are They Attractive? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • What Are The GRANOLAS and Why Are They Attractive?
  • EIA Analysis and Oil Market Update

Futures are modestly weaker following a quiet night of news as investors digest the last weeks’ gains.

Economically, Chinese exports (1.5% vs. (E) 1.3%) and imports (8.4% vs. (E) 4.7%) were stronger than expected, offering some optimism for that economy.

Tech earnings continued to be mixed as semiconductor company ARM Holdings (ARM) posted soft guidance and the stock is down 8% pre-market.

Today focus initially will be on the BOE Rate Decision, as no rate cut is expected but the BOE may signal a rate cut is coming in June.  In the U.S., the only notable number is Jobless Claims (E: 212K) and there’s just one Fed speaker today (Daly at 2:00 p.m. ET) and it’ll take a significant surprise from either event to move markets.

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May MMT Update: Less Bad News Is Not Good

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May MMT Update: Less Bad News Is Not Good: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • May Market Multiple Table Update: Don’t Confuse Less-Bad News for Actual Good News

Futures are little changed this morning as favorable EU economic data and strong bank earnings from UBS and UniCredit offset escalating geopolitical tensions in Gaza.

Geopolitically, Israeli tank units seized a critical Rafah border crossing with Egypt as ceasefire talks reportedly continue, however the market impact is limited this morning with oil futures slightly lower.

Economically, UK’s Construction PMI topped estimates (53.0 vs. E: 51.1) and EU Retail Sales rose 0.8% vs. (E) 0.7% helping ease worries about fading economic growth in Europe.

Looking into today’s session, focus will be on the Fed’s Kashkari who speaks mid-morning (11:30 a.m. ET). The market is looking for more confirmation of sooner-than-later rate hikes in 2024.

Then this afternoon, there is a 3-Yr Treasury Note auction at 1:00 p.m. ET which will be closely watched by bond traders to see how well the larger than expected Q2 bond issuance will be absorbed by the market. A tailing auction that sends yields higher will be negative for stocks.

Finally, there is just one economic report this afternoon: Consumer Credit ($15.5B) and two earnings reports to watch: DIS ($1.11), LYFT ($0.02).

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Markets have held up well to a dramatic reduction in rate-cut estimates

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Markets have held up well to a dramatic reduction in rate-cut estimates: Tom Essaye, Sevens Report Editor, Quoted in MarketWatch on MSN

This is the big question markets have for Fed’s Jerome Powell, BlackRock says

“Since the start of the year, markets have held up well to a dramatic reduction in rate-cut estimates,” Tom Essaye, founder and president of Sevens Report Research, said in a note on Tuesday. “Remember, in January the market expected six rate cuts starting in March.”

Stocks and bonds haven’t been hit harder by the recent shift in those expectations because “the market still expects the next move from the Fed to be a cut,” Essaye said. A reiteration of that message by Powell on Wednesday could help stop the S&P 500’s recent slide, he said.

Also, click here to view the full MarketWatch article published by MSN on May 1st, 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.

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Earnings in those tech companies are really important

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Earnings in those tech companies are really important: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Stocks Open Mixed Ahead of Fed Decision

“Bottom line, there are a lot of potential catalysts for markets today but the key to stocks stabilizing will be economic data that contradicts recent signs of stagflation emerging in the economy and a benign Fed day with an as-expected dovish announcement and no surprises from Chair Powell,” writes Sevens Report Research’s Tom Essaye. “Otherwise, we could easily see a test or breakdown through the April lows in the S&P 500 today.”

Also, click here to view the full Barron’s article published on May 1st, 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.

Earnings in those tech companies are really important

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Earnings in those tech companies are really important: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Magnificent Seven Stocks Largely Dip Before Amazon Earnings Release

“I can tell you with a lot of confidence that if Google [parent Alphabet] and Microsoft did not post strong earnings last week, we would be below 5000 in the S&P 500 because, really, nothing else was that positive,” Sevens Report Research’s Tom Essaye told Barron’s. “Earnings in those tech companies are really important. And if you see Amazon whiff and you see Apple whiff, that’s just going to add to the negativity.”

Also, click here to view the full Barron’s article published on April 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.

Sevens Report Research’s Tom Essaye Quoted by Barron’s in a Phone Interview

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Price pressures are firming up: Sevens Report Editor, Tom Essaye, Quoted in Barron’s

Dow Drops 300 Points. Price Pressures Are Firming Up.

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that hotter-than-expected employment cost and home price data spooked markets after a couple strong days.

“What I think that’s doing is reminding everybody, after a couple of days of a breather, that there’s really a long and growing list of indicators that are showing price pressures are firming up,” Essaye says.

He notes that while inflation is not roaring back, the numbers have remained elevated enough to increase the likelihood that the Federal Reserve keeps rates higher for longer.

“If he says, ‘Look, this is very disappointing and we may have to consider hiking rates again,’ which I don’t think he will do, but if he does do that, then it’s going to hit the markets really hard,” Essaye says.

Also, click here to view the full Barron’s article published on April 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.

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

Futures are modestly higher ahead of the jobs report thanks to good AAPL earnings and solid economic data.

AAPL posted better than expected earnings and boosted its buyback.  The stock is rallying 6% pre-open and that’s helping to push futures higher.

Economically, the UK Services PMI was better than expected (55.0 vs. (E) 54.9) implying solid growth.

Today focus will be on the jobs report and expectations are: 243K Job Adds, 3.8% Unemployment Rate and 0.3% m/m and 4.0% y/y Wage Growth.  To help extend this late week bounce, markets will need to see the jobs number modestly below expectations (preferably on all three metrics) to imply solid growth but still increase the likelihood of a September rate cut.  If the jobs report prints “Too Hot” across all three metrics, don’t be shocked if Thursday’s rally is given back and then some.

Outside of the jobs report, there are two Fed speakers today:  Williams & Goolsbee (7:45 a.m. ET).  Williams will be the more important of the two as he’s part of Fed leadership and if he brings up rate hikes again, look for an uptick in volatility.

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Was the Fed Decision Positive? (No, Not Really)

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Was the Fed Decision Positive? (No, Not Really): Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Was the Fed Decision Positive? (No, Not Really)
  • EIA Analysis and Oil Market Update

Futures are solidly higher following a mostly quiet night of news as markets further digested Fed Chair Powell pushing back on the idea of future rate hikes.

Economic data showed more buoyant inflation globally as Swiss CPI rose 1.4% vs. (E) 1.2% while the Euro Zone Manufacturing PMI met estimates.

Today the focus will remain on economic data as we get two notable economic reports, Jobless Claims (E: 211K) and Unit Labor Costs (E: 3.3%). If both are “hot” (and especially if Unit Labor Costs are high) then expect higher yields and more pressure on stocks ahead of tomorrow’s Jobs Report.

Earnings season is winding down but there’s an important report via AAPL (E: $1.51) after the close, while I’ll also be watching SQ ($0.72), COIN (E: $1.20) and BKNG ($14.03) for any insight into the state of the U.S. consumer.

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