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Key Levels to Watch on Fed Day

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Key Levels to Watch on Fed Day: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • Key Technical Levels to Watch on Fed Day – Print or Share These Charts
  • Is Canadian CPI a Warning on Inflation?

U.S. equity futures are rising alongside European shares this morning. Resulting from a dovish market reaction to a “cooler than feared” inflation print in the U.K. overnight.

Headline CPI in the U.K. dropped to 6.7% vs. (E) 7.1% in August while Core fell to 6.2% vs. (E) 6.8%. The data was a clear surprise and has resulted in rates markets lowering odds of a BoE rate hike tomorrow to 50% from near 100% previously, supporting risk-on money flows this morning.

There are no economic reports or Treasury auctions today. This will likely leave markets in a state of “Fed Paralysis” until the FOMC Announcement (2:00 p.m. ET) and Fed Chair Powell’s press conference (2:30 p.m. ET).

Also, to request a one-page PDF “tear sheet” of the charts on Page 2 of today’s Report, complete with price level explanations, email info@sevensreport.com.

Key Levels to Watch

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Stocks Pop in Relief Rally

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Stocks Pop in Relief Rally: Tom Essaye Quoted in Barron’s

Stocks Pop in Relief Rally

Sevens Report Research’s Tom Essaye told Barron’s he believes the market is experiencing a form of a relief rally.

He noted a wave of key catalysts for stocks has passed without significant negative surprises. This included the consumer price index on Wednesday and data on producer prices and retail sales on Thursday.

“Specifically for today, the ECB signaling it’s done with rate hikes combined with Goldilocks economic data to boost stocks and it’s just been building throughout the day,” Essaye says. “Essentially, it’s a similar dynamic to what we saw in June and July. Where markets are optimistic on growth (so more confident of a no/soft landing) and we see the ‘rest’ of the market outperform vs. tech.”

Also, click here to view the full Barron’s article published on September 14th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Stocks Pop

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China Stimulus: Tom Essaye Quoted in Barron’s

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China Stimulus: Tom Essaye Quoted in Barron’s

China Stimulus Helps Asian Stocks Trade Higher

Worries over a slowdown in China have rattled global markets in recent months, with stimulus from Beijing doing little to stem the bleeding in stocks. However, the latest move to shore up the country’s economy seems to have been received more positively.

“China cut bank reserve requirements by 25 basis points in the latest step to help support the Chinese economy. And there are signs these measures are starting to have an impact,” said Tom Essaye, founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on September 14th, 2023. However, to see Tom’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.

Economic Indicators: U.K. GDP Drop and EU Industrial Production

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Economic Indicators: Tom Essaye Quoted in Barron’s

Gloomy Economic Data Weigh on European Trading

Economic indicators such as, “U.K. GDP dropped…after hot wage data yesterday, bolstering stagflation fears while EU Industrial Production fell,” said Tom Essaye, the founder of Sevens Report Research.

“Despite the recently soft data, rates markets continue to price in a 75% chance of an ECB rate hike this week.”

Also, click here to view the full Barron’s article published on September 13th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Economic Indicators

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CPI’s Influence on Market Dynamics: A Closer Look

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CPI’s Influence on Market Dynamics: Tom Essaye Quoted by BNN Bloomberg

Nasdaq 100 Drops 1 per cent as Apple slides after event

CPI is really key because if it halts its downward trend, markets will have to price in a more hawkish Fed. And that would be a headwind on stocks, said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter.

Lastly, “Put in a more familiar way, CPI impacts two of the three pillars of the rally: disinflation and expectation the Fed is done with rate hikes,” Essaye noted.

Also, click here to view the full BNN Bloomberg article published on September 12th, 2023. However, to see Tom’s full discussion on CPI’s influence on markets sign up here.

CPI's Influence - BNN

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CPI Impacts Two of The Three Pillars of The Rally

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CPI impacts two of the three pillars of the rally: Tom Essaye Quoted in The Spokesman-Review

Wall Street takes risk off table before CPI report

CPI is key because if it halts its downward trend, markets will have to price in a more hawkish Fed. That would be a headwind on stocks, said Tom Essaye, who founded The Sevens Report newsletter.

“Put in a more familiar way, CPI impacts two of the three pillars of the rally: disinflation and expectation the Fed is done with rate hikes,” Essaye noted. “If CPI is too hot, both will be damaged.”

Also, click here to view the full Spokesman-Review article published on September 12th, 2023. However, to see Tom’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.

Tech Shares Have Been Driving The Major Stock Indices So Far This Week

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Tech shares have been driving the major indices: Tom Essaye Quoted in Barron’s

Stocks Slip. Apple Event in Focus Ahead of CPI Data.

“Tech shares have been driving the major stock indices so far this week,” Essaye writes. “So any meaningful reaction in [AAPL] shares will likely move the broader indices as focus turns ahead to CPI tomorrow.”

With no major economic reports ahead of Wednesday’s release of the consumer price index for August, Sevens Report Research’s Tom Essaye writes that Apple’s (ticker: AAPL) new product event will be a key focus. The event is expected to unveil the next line of iPhones. Wall Street doesn’t foresee the device will be a massive step up from recent releases.

Also, click here to view the full Barron’s article published on September 12th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Tech Shares - Barron's Quote

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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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.

Get defensive but hold onto the magnificent seven

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Get defensive but hold onto the magnificent seven: Tom Essaye Joins BNN Bloomberg

Get defensive but hold onto the magnificent seven: Tom Essaye

Tom Essaye, president of Sevens Report Research, joins BNN Bloomberg for his cautious outlook for the markets, getting more into defensive areas and staying away from the Arm IPO.

Also, click here to watch the full BNN Bloomberg video published on September 11th, 2023. However, to see Tom’s full comments on the current market environment in our daily report sign up here.

Get Defensive

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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.

Headline and Core CPI – The Important Difference

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Difference Between Headline and Core CPI: Strengthen your market knowledge with a free trial of The Sevens Report.

What’s in Today’s Report:

  • The Important Difference Between Headline and Core CPI
  • NFIB Small Business Optimism Index Contradicts the “No-Landing” Scenario

U.S. stock futures are tracking global shares lower this morning following more disappointing economic data in the Eurozone and continued pressure on the tech sector.

AAPL shares are extending yesterday’s post-product launch declines this morning, therefore, weighing on the tech sector broadly in pre-market trading.

Economically, U.K. GDP dropped to -0.5% vs. (E) -0.2% in July after hot wage data yesterday, bolstering stagflation fears while EU Industrial Production fell -1.1% vs. (E) -0.7%. Despite the recently soft data, rates markets continue to price in a 75% chance of an ECB rate hike this week.

Today, focus will primarily be on inflation data and how Treasuries react to the release: CPI (0.6% m/m, 3.6% y/y), Core CPI (E: 0.2% m/m, 4.4% y/y).

There are no Fed speakers or Treasury auctions today so a “hot” CPI report will likely spark cross-asset volatility while a Goldilocks release will setup a possible extension of the early September relief rally.

Headline and Core CPI

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Stable Treasury Yields: Tom Essaye’s Insight

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Stable Treasury Yields: Tom Essaye Quoted in Barron’s

Stocks Are Rising, With Tech Leading the Way Higher

Technology stocks were leading the broader market higher in early Monday trading as traders braced for a busy week ahead.

“Today there are no notable economic reports nor any Fed speakers, so focus will remain on Treasury yields and if yields are relatively stable, then stocks can rebound from last week’s losses,” writes Sevens Report Research’s Tom Essaye. 

The big event of the week will be the release of the consumer-price index for August on Wednesday. The inflation reading will inform the Federal Reserve’s next moves on inflation. 

Also, click here to view the full Barron’s article published on September 11th, 2023. However, to see Tom’s full comments on the current market environment sign up here.

Treasury Yields

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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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.