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Market Multiple Table – October Edition

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Market Multiple Table – October Edition: Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • Market Multiple Table – October Edition
  • Why Didn’t a Hot PPI Report Weigh on Markets?

Futures are modestly higher on more reports of global disinflation combined with additional Chinese stimulus.

Japanese PPI rose less than expected (2.0% vs. (E) 2.5%). And, that added to the recent list of inflation data points that imply ongoing global disinflation.

China’s sovereign wealth fund bought shares in the nation’s largest banks, boosting Asian markets.

Today the focus will be on the CPI report and expectations are as follows: Headline CPI:  0.3% m/m, 3.6% y/y, Core CPI: 0.3% m/m, 4.1% y/y.  Bottom line, a CPI Report under expectations should pressure yields and fuel a continued rally in stocks while a hot CPI should lift yields and likely weigh on stocks.

Away from the CPI report we also get Jobless Claims (E: 209K) and have multiple Fed speakers: Bostic & Collins.

Market Multiple Table - October Edition

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The Health of the World’s Second-Largest Economy

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The Health of the World’s Second-Largest Economy: Tom Essaye Quoted in Barron’s

Asian Stocks Gain as Investors Get Fresh Hope of China Stimulus

Asian traders seemed to largely shake off the latest grim development from China’s distressed property sector. As Country Garden edged to the brink of default—stocks moved higher after a report that meaningful Chinese stimulus may be due.

“The news is alleviating some lingering concerns about the health of the world’s second-largest economy.” Said Tom Essaye, the founder of Sevens Report Research.

Also, click here to view the full Barron’s article published on October 10th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Upward Pressure in Treasury Yields

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Utilities, Staples and Healthcare

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Utilities, Staples and Healthcare: Tom Essaye Quoted in Morningstar

Defensive stocks have traded poorly this year, but this strategist says they are in a sweet spot | Morningstar

A ‘growth scare’ will push Treasury yields lower and increase demand for safe-haven assets in equities: Sevens Report Research

U.S. stocks in the underperforming defensive sectors may be due for a comeback in the coming months as fears of an economic slowdown will push Treasury yields lower and increase demand for safe-haven assets in equities, according to Sevens Report Research.

“I do believe that we will have an economic growth scare in the coming months. That doesn’t mean I’m saying we’ll have a recession, but I do believe we have a growth scare looming and as such, I will begin to ‘nibble’ on utilities, staples and healthcare on the long side starting today, and I’ll rotate out of cyclicals as they’ve benefitted from solid growth and higher rates,” said Tom Essaye, the founder and the president of Sevens Report Research, in a Tuesday note.

Also, click here to view the full Morningstar article published on October 10th, 2023. 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.

CPI Preview: Good, Bad, and Ugly

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CPI Preview: Good, Bad, and Ugly – Start a free trial of The Sevens Report.

What’s in Today’s Report:

  • CPI Preview: Good, Bad, & Ugly
  • “Soft Components” of the NFIB Small Business Optimism Index Fall to GFC Lows
  • Chart – Equal-Weighted S&P 500 Index (RSP) Remains in Steep Downtrend, Underscoring Thin Market Breadth

U.S. equity futures are modestly higher this morning despite escalating tensions in the Middle East overnight as investors embrace a continued pullback in global bond yields after steady inflation data in the EU overnight.

Economically, German CPI was unchanged from August, coming in at 4.5% y/y in September, meeting estimates. The inline inflation print is helping bonds continue to stabilize and supporting modest risk-on money flows this morning.

Today, focus will be on economic data early with PPI (E: 0.3% m/m. 1.2% y/y) and Core PPI (E: 0.2% m/m, 2.1% y/y) due out ahead of the bell.

From there focus will turn to the Fed with multiple officials scheduled to speak: Waller, Bostic, Collins. Additionally, the latest FOMC meeting minutes will come at 2:00 p.m. ET.

Bottom line, if PPI is more or less inline with estimates and the FOMC minutes and Fed chatter over the course of the day continue to support the less-hawkish narrative of recent. Then this week’s rally can continue, however and reversal back higher in yields will pressure stocks and other risk assets.

CPI Preview: Good, Bad, & Ugly

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Crude Oil Prices May Impact Inflation

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Crude Oil Prices May Impact Inflation: Tom Essaye Quoted in Forbes

Lockheed Martin, Northrop Grumman Stocks Notch Best Days In Years Amid Israel-Hamas Conflict

Defense stocks surged while the broader market dipped Monday as Wall Street sifted through the market fallout of the conflict between Israel and Hamas, which escalated this weekend by the latter’s historic attack.

Sevens Report analyst Tom Essaye attributed this early slump to “rising geopolitical tensions,” pointing to how the related surge in crude oil prices may impact inflation and thus could keep monetary policy tighter.

Also, click here to view the full Forbes article published on Octobe 9th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Crude Oil Prices May Impact Inflation

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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Discussing the Latest Canada and US Jobs Data

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US Jobs Data: Tom Essaye Interviewed on BNN Bloomberg

Ultimately the path of inflation will hold the answer on rate hikes, over jobs data: Chief economist

Jimmy Jean, chief economist and strategist at Desjardins, Gennadiy Goldberg, head of U.S. rates strategy at TD Securities, and Tom Essaye, president of Sevens Report Research, join BNN Bloomberg to discuss the latest Canada and US jobs data, and whether the central banks might hike again.

Also, click here to view the full BNN Bloomberg video interview published on October 9th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Discuss the Latest Canada and US Jobs Data

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Rising Geopolitical Tensions

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Rising Geopolitical Tensions: Tom Essaye Quoted in Morningstar

Dow, S&P 500 flip positive to start week after Hamas attacks Israel

The attack by Hamas on Israel raised fears of a broader conflict, sending crude prices jumping. And spurring haven-related support for gold, the dollar and U.S. Treasury futures. The cash Treasury market is closed for the Columbus Day and Indigenous Peoples Day holiday.

“The human tragedy and geopolitical implications aside, from a market standpoint the attack matters because rising geopolitical tensions mean higher oil prices and the higher oil goes, the stronger the additional headwind on stocks and bonds,” said Tom Essaye, founder of Sevens Report Research, in a Monday note.

Also, click here to view the full Morningstar article published on October 9th, 2023. 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.

Tom Essaye, Highlights The Significance of The Job Data

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Significance of The Job Data: Tom Essaye Quoted in Investing.com

Wall Street’s Anticipation: Payrolls Data to Influence Fed’s November Decision?

Amid concerns about how upcoming data may impact interest rates, U.S. equities leaned towards a lower close as the S&P 500 fluctuated above a crucial support point. A potential boost in Friday’s monthly non-farm payrolls could lead to increased yields and a further stock decline.

Tom Essaye, highlighted the significance of the job data, suggesting it could greatly influence the S&P 500’s trajectory. 

Also, click here to view the full Investing.com article published on October 5th, 2023. 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.

Tomorrow’s Jobs Report

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Tomorrow’s jobs report: Tom Essaye Quoted in BNN Bloomberg

Stock Futures Slide as Bond Yields Keep Rising

“Tomorrow’s jobs report may be the most important one of the year,” according to Tom Essaye, a former Merrill Lynch trader.

If the report is too hot and the yield on the U.S. 10-year bond moves close to 5 percent. “We could easily see the S&P 500 fall through the 200-day moving average and at that point we could see an acceleration of the declines in stocks,” Essaye wrote in his The Sevens Report newsletter.

Also, click here to view the full BNN Bloomberg article published on October 5th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Tomorrow’s Jobs Report

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An Important Jobs Day

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

What’s in Today’s Report:

  • An Important Jobs Day (Jobs Report Preview – Abbreviated Version)

Futures are modestly higher following better than expected economic data overnight and on positioning ahead of today’s important jobs report.

Japanese Household Spending (3.9% vs. (E) 0.6%) and German Manufacturers’ Orders (3.9% vs. (E) 2.1%) both beat estimates. This points to some resilience in the global economy.

Today focus will be on the jobs report and expectations are as follows:  Job Adds: 160K, UE Rate: 3.7%, Wage Growth: 0.3% m/m & 4.3% y/y.  For markets, a job adds figure modestly below expectations with an increase in unemployment and drop in wages should push Treasury yields lower and spur a strong rebound in stocks.

Conversely, if we see a job adds number close to or above 250k, a decline in unemployment or rise in wages, expect higher Treasury yields and lower stock prices.

Outside of the jobs report today we also get Consumer Credit (E: $11.5B) and one Fed speaker, Waller (12:00 p.m. ET), but they shouldn’t move markets.

An Important Jobs Day

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