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Nvidia Has Been The ‘Poster Child’ Of AI Enthusiasm

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Nvidia Has Been The ‘Poster Child’ Of AI Enthusiasm: Tom Essaye Quoted in Bloomberg Featured on Yahoo Finance

Tech Up in Late Hours on Nvidia’s Bullish Outlook: Markets Wrap

“Nvidia has been the ‘poster child’ of AI enthusiasm because NVDA makes the type of semiconductor chips that power generative AI and demand for those chips has gone through the roof,” said Tom Essaye, founder of The Sevens Report. “The AI-driven rally in the ‘Mag Seven’ is largely justified by the fact that they’re making a lot more money than they were previously.”

While Nvidia is the proverbial “picks and shovels” of the “AI gold rush”, other big-tech companies such as Microsoft Corp., Meta Platforms Inc., Alphabet Inc., Amazon.com Inc. and Apple Inc. have also seen large stock rallies as investors expect these companies to harness the power of generative AI to boost profits, Essaye noted.

“Has the AI mania gone too far and are we looking at a bubble situation?” Essaye said. “Based on what most of us think about typical bubbles, the answer is ‘no’ they are not in a bubble.”

Also, click here to view the full Bloomberg article featured on Yahoo Finance published on February 21st, 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.

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Tech Stocks Pulled Bacl – Tom Essaye Quoted In Barron’s

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Hedging Up Ahead Of The Results: Tom Essaye Quoted in Barron’s

Tech Stocks Pulled Back. The Nasdaq Fell 0.9%.

“You’ve got arguably the most important stock in the whole market producing earnings tomorrow, so I think that you’re just seeing some people reduce a little bit of exposure into that earnings print on the chance that perhaps it isn’t as fantastic as everybody expects it to be,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview.

Essaye said that last Friday’s selling flowed through to today as traders expressed worries that inflation isn’t going to come down as fast as they were previously pricing in.

“I don’t think it means a lot to be honest,” Essaye says. “Because if Nvidia posts good earnings tomorrow, all this is going to be undone relatively quickly.”

Also, click here to view the full Barron’s article published on February 21st, 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 Rally

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Hedging Up Ahead Of The Results

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Hedging Up Ahead Of The Results: Tom Essaye Quoted in Barron’s

Nvidia Weighs on Tech Stocks Ahead of Earnings

“I think what you’re seeing is just some hedging up ahead of the results,” Sevens Report Research’s Tom Essaye told Barron’s in a phone interview. “I think that’s part of it. The other part of it is you’re still seeing some follow through from Friday selling, too, as people are getting, not nervous about a rebound in inflation, but a little less sure that inflation is just going to keep going straight down in a line.”

Also, click here to view the full Barron’s article published on February 20th, 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 Rally

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.

Reminiscent Of The 2018 ‘Volmageddon’ Event

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Reminiscent Of The 2018 ‘Volmageddon’ Event: Tom Essaye Quoted in Morningstar

‘Volmageddon 2’ may be coming to a stock market near you, says this analyst

An important reason why the S&P 500 dropped 1.4% on Tuesday, according to Essaye, was an an overcrowded short side of the options market, which exacerbated the selling.

The action, says Essaye, “was reminiscent of the 2018 ‘Volmageddon’ event that ultimately resulted in several ‘short-volatility’ ETF’s being forced to liquidate as volatility exploded higher amid a more than 10% drop in the S&P 500 in just two weeks.”

“Fast forward to late 2023 and early 2024 and we are once again seeing similar, volatile price action into certain derivatives expirations, namely the monthly VIX futures expirations,” says Essaye. The chart below shows the sharp gap-down sell-offs for the S&P 500 into each of the last three VIX expirations.

Also, click here to view the full MarketWatch article published on Morningstar on February 16th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Oil Inventories

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.

Rising level Of Greed In The ‘Short-Volatility’ Trade

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Rising level Of Greed In The ‘Short-Volatility’ Trade: Tom Essaye Quoted in Business Insider

Stocks are vulnerable to a 5% ‘air-pocket drawdown’ as greedy traders short volatility, research firm says

“Stocks on Tuesday seemed to have an additional influence weighing on the broader market,” Tom Essaye, the founder and president of Sevens Report Research, wrote in a note on Thursday. “It turns out that it did… an overcrowded short side of the options market which was reminiscent of the 2018 ‘Volmageddon’ event.”

“Based on the magnitude of the move in VIX futures on Tuesday, there is an increasing threat that the rising level of greed in the ‘short-volatility’ trade, similar to what we saw in 2018, could result in an air-pocket drawdown of 5% or more in the S&P 500,” Essaye said.

“The rebound in interest in short-volatility strategies is once again posing a risk to the broader markets here as a negative catalyst can clearly spark a momentous, derivatives-driven selloff in the broader stock market like that which we saw in 2018,” Essaye said.

“Going forward, these expirations will remain dates to keep in mind as the threat of volatility will be elevated as we move further into 2024,” Essaye said.

Also, click here to view the full Business Insider article published on February 16th, 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.

Why Didn’t Hot Inflation Data Cause a Bigger Drop?

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Why Didn’t Hot Inflation Data Cause a Bigger Drop? Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Why Didn’t the Hot Inflation Data Cause a Bigger Drop?
  • Economic Takeaways – Are Stagflation Risks Rising?

Stock futures are lower to start the week as a rate cut by China’s central bank failed to bolster investors’ appetite for risk overseas while domestic focus shifts to NVDA earnings.

The PBOC slashed the 5-Yr Loan Prime Rate by a record 25 bp overnight (E: -5 bp) but the rate cut failed to ease lingering concerns about the health of the property market and markets are trading with a moderate risk-off tone this morning.

Looking into today’s session, there are two economic reports to watch: Leading Economic Indicators (E: -0.1%) which has been flashing a recession signal for months, and Canadian CPI (E: 0.4%) which could further stoke inflation worries if the number comes in hot.

There are no Fed officials scheduled to speak today, however the Treasury will hold 3-Month and 6-Month Bill auctions at 11:30 a.m. ET and a 52-Week Bill action at 1:00 p.m. ET. Based on the market’s increased sensitivity to rising bond yields in recent weeks, signs of weak demand in the auction could send yields to new highs which would act as a strengthening headwind on risk assets as we start the week.

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 Reason Stocks Dropped Was Because The CPI Report

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The Reason Stocks Dropped Was Because The CPI Report: Tom Essaye Quoted in Blockworks

Bitcoin breaks $52k, outperforms stocks to new 2024 high

After markets digested the CPI print in the US, inflation data from the United Kingdom came in lower than expected, showing prices are holding steadily at 4% higher year-over-year. The more positive inflationary data helped stock futures rise ahead of Wednesday’s open, Tom Essaye, founder of Sevens Report Research said.

It’s important to realize that while the hot CPI was the catalyst for yesterday’s stock and bond market declines, stocks didn’t decline because CPI implied inflation was bouncing back,” Essaye said. “Instead, the reason stocks dropped was because the CPI report was the first data point in 2024 to not confirm these fantastically positive assumptions that have driven this rally.”

Also, click here to view the full Blockwork article published on February 14th, 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 Market Had Gotten Ahead Of Itself

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The Market Had Gotten Ahead Of Itself: Tom Essaye Quoted in Barron’s

Stocks Drop as Market Dials Back Fed Rate-Cut Expectations After CPI Data

Sevens Report Research’s Tom Essaye told Barron’s in a phone interview that while the report didn’t imply that inflation was bouncing back significantly, the market had gotten ahead of itself by pricing in inflation crashing to the Federal Reserve’s 2% target.

“I think this is more symptomatic of a market that’s frankly, gotten ahead of itself on what it expects to happen,” Essaye says. “And we’re having that expectation dialed back now.”

“It’s just one report, but I think it is a little bit of a reminder, and an important one, that what has really fueled this rally since October has been the assumption of Fed rate cuts and falling inflation,” Essaye says. “And while that likely will happen later this year, it may not happen as soon as they expected. And I think that’s what we’re seeing in markets.”

Also, click here to view the full Barron’s article published on February 13th, 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 Rally

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.

Sevens Report Research’s Tom Essaye Quoted In Barron’s

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Sevens Report Research’s Tom Essaye Quoted In Barron’s

Nasdaq Loses Steam as Stocks Give Back Some Earlier Gains

Sevens Report Research’s Tom Essaye told Barron’s that the Federal Reserve Bank of New York released median inflation expectations from its January survey that were unchanged at the one- and five-year ahead horizons. But three-year expectations fell to 2.4% from 2.6%.

“That will make the Fed more confident in cutting rates and amidst an other wise quiet day, that’s what’s driving this market,” Essaye said.

Also, click here to view the full Barron’s article published on February 13th, 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 Rally

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 Four Drivers Of This Bull Market

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The Four Drivers Of This Bull Market: Tom Essaye Quoted in SwissInfo.ch

S&P 500 Rally Hits a Wall in Run-Up to CPI Report: Markets Wrap

Last week’s news and data reinforced the four drivers of this bull market: Fed rate cuts by May, solid economic growth, continued disinflation and strong earnings, according to Tom Essaye at the Sevens Report.

“It’s important to acknowledge that this rally has been driven by actual good news and bullish expectations being reinforced by actual data,” Essaye said. “At the same time, the risks that kept investors worried in October (and even throughout 2023) haven’t been vanquished — they simply haven’t shown up yet.”

Also, click here to view the full article published on February 13th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

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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.