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June Market Multiple Table (All About TACO)

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What’s in Today’s Report:

  • June Market Multiple Table Update – All About “TACO”

Futures are slightly higher this morning as traders remain optimistic about progress in the ongoing U.S.-China trade talks ahead of the May CPI release tomorrow.

Economically, the NFIB Small Business Optimism Index rose 3 points to 98.8 in May, topping estimates of 95.9 which is supporting modest gains in U.S. equity futures.

There are no additional economic reports today and no Fed officials are scheduled to speak which limits potential catalysts to today’s Treasury auctions which include 6-Week and 52-Week Bill auctions at 11:30 a.m. ET and a (more important) 3-Yr Note auction at 1:30 p.m. ET.

Late season earnings continue to trickle in as well with: ASO ($0.84), SJM ($2.25), UNFI ($0.24), GME ($0.08), and PLAY ($0.96) all due to report Q1 results today.

Bottom line, today is lining up to be fairly quiet as far as scheduled catalysts are concerned. However, any materially positive or negative trade talk headlines out of London where U.S. and Chinese negotiations remain underway, could meaningfully move markets today before focus turns to tomorrow’s critical May CPI release.

Buy the Trump tariff dip

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Buy the Trump tariff dip: Sevens Report Founder, Tom Essaye Quoted in Markets Insider

The TACO trade is the new Trump trade. Here’s what to know about the meme ruling the stock market.

“Buy the Trump tariff dip. Essentially, Trump has proven to investors that he won’t actually follow through with draconian tariffs,” Tom Essaye of the Sevens Report wrote on Wednesday. “As such, any sell-off following a dramatic tariff threat should be bought.”

Also, click here to view the full Market Insider article featured in MSN, published on May 28th, 2025. 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.

Hard Landing/Soft Landing Scoreboard: May Update

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What’s in Today’s Report:

  • Hard Landing/Soft Landing Scoreboard: Hard Data Still (Mostly) Hanging in There
  • ISM Manufacturing Index Takeaways

Futures sold off overnight as a notably weak Chinese factory report offset a favorably cooler-than-anticipated EU CPI print.

China’s May Manufacturing PMI fell to 48.3 vs. (E) 50.7 while EU Core CPI encouragingly fell from 2.7% to 2.3% vs. (E) 2.5% last month.

Looking ahead to today’s session, there are a few noteworthy economic reports including Motor Vehicle Sales (E: 16.4M), Factory Orders (E: -3.0%),  and JOLTS (E: 7.1 million). The market could be particularly sensitive to a soft Job Openings print as a drop below 7 million could stoke worries about the health of the labor market ahead of Friday’s May jobs report.

Additionally, there are a handful of Fed speakers but unless any of them deviate from the “wait-and-see” narrative of late, their market impact should be limited. Speakers today include Goolsbee (12:45 p.m. ET), Cook (1:00 p.m. ET), and Logan (3:30 p.m. ET).

Finally, some late season earnings continue to trickle in with DG ($1.47), NIO ($-0.22), CRWD ($-0.28), and HPE ($0.28) all reporting Q1 results today.

With the ISM Services (tomorrow) and BLS jobs report (Friday) still looming large, today should be a relatively quiet day for markets as traders digest the big May rally however risks of profit taking exist if a negative headline crosses the wires.

Tariff/Trade-War Update

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What’s in Today’s Report:

  • Where Do We Stand With Tariffs and How Important Are They for Markets?
  • Weekly Economic Preview: ISM Data and May Jobs Report in Focus

Futures are lower with global markets amid a combination of escalating trade war tensions and an unexpected intensification in the Russia-Ukraine war over the weekend.

President Trump doubled tariffs on steel to 50% which dampens hopes for an EU trade deal while rhetoric between the U.S. and China deteriorated since Friday’s close.

Ukraine surprisingly struck Russian air base targets over the weekend in what military officials said was their large drone attack so far in the multi-year conflict. The escalating geopolitical tensions has reignited a fear bid in oil with futures prices up nearly 4% this morning.

Today kicks off a busy week of economic data with the most important release coming just after the open via the ISM Manufacturing PMI (E: 48.5). Construction Spending (E: 0.2%) will also be released after the open but is less likely to impact markets.

There are also multiple noteworthy Fed officials scheduled to speak today including, Logan (10:15 a.m. ET), Goolsbee (12:45 p.m. ET), and most importantly Powell (1:00 p.m. ET). Any fresh insight on policy plans has the potential to materially move markets (hawkish commentary would influence risk-aversion while dovish comments would support a continuation of the May rally).

Moody’s downgraded U.S. sovereign debt

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Moody’s downgraded U.S. sovereign debt: Sevens Report Analysts Quoted in Investing.com

What the Moody’s downgrade means for markets

According to the latest Sevens Report, the move is unlikely to drive long-term market direction.

“Moody’s downgraded U.S. sovereign debt to Aa1 from Aaa. That downgrade boosted long-term Treasury yields, as some investors sold long-term Treasuries,” the analysts wrote.

Stocks opened lower Monday, but Sevens emphasized that the downgrade “revealed nothing new.”

But Sevens called the timing questionable: “Downgrading U.S. debt for larger deficits and rising interest costs is the financial equivalent to saying ‘water is wet.’”

Sevens said, “There’s been no dramatic deterioration lately,” and noted that speculative fears tied to potential legislation “don’t justify the downgrade.”

“The deteriorating fiscal situation hasn’t stopped stocks from rallying over the past few years and that’s unlikely to change anytime soon.”

Also, click here to view the full article featured on Investing.com published on May 20th, 2025. 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.

Sentiment Update: The Bulls Have Returned (Somewhat)

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What’s in Today’s Report:

  • Sentiment Update – The Bulls Have Returned (At Least Somewhat)
  • Chart: Sector Positioning Remains Cautious Despite Broad Market Rebound

Futures are lower as the rapid Q2 relief rally continues to be digested amid an ongoing sense of market uncertainty.

Economically, U.K. CPI spiked from 2.6% in March to 3.5% in April, topping estimates of 3.3% (y/y) which is putting upward pressure on bond yields as inflation concerns return.

There are no noteworthy economic releases to watch today but two Fed officials are scheduled to speak mid-day: Barkin & Bowman (12:15 p.m. ET), and there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET.

Strong demand for the T-Bonds and a more dovish tone out of the Fed speakers would be well received and likely to help stabilize equity markets today while weak demand metrics in the auction and/or hawkish Fed speak could further pressure stocks.

Earnings season continues to wind down, however there are some noteworthy companies reporting Q1 results today including: TGT ($1.65), TJX ($0.90), BIDU ($1.96), LOW ($2.88), SNOW (-$0.59). Investors will particularly like to see strength in the consumer names reporting today to quell worries of a slowdown in consumer spending in early 2025.

What the Moody’s Downgrade Means for Markets (Two Important Charts)

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What’s in Today’s Report:

  • What the Moody’s Downgrade Means for Markets
  • Two Important Charts: Interest Expense and Deficits

Futures are modestly lower this morning as the S&P 500’s six-day rally is being digested amid a steadying Treasury market after the Moody’s downgrade of the U.S. last week.

There were positive trade war headlines out of Japan, Vietnam, and India overnight helping global stocks rally while economically, German PPI favorably fell -0.9% vs. (E) -0.5%.

Looking into today’s session, there are no notable economic reports in the U.S., however the Treasury will hold a 6-week Bill auction at 11:30 a.m. ET which could shed light on the market’s near-term Fed policy expectations, but barring any big surprise, the auction is not likely to move markets.

There are a handful of Fed speakers today including: Barkin & Bostic just ahead of the bell (9:00 a.m. ET), and Musalem in the early afternoon (1:00 p.m. ET). A “higher-for-longer” shift in Fed policy outlook has been priced in recently, so any dovish commentary out of the Fed officials would be well received.

Finally, some late season earnings will continue to be released today including: HD ($3.59), PANW ($0.41), TOL ($2.86).

Alleviate consumer-demand concerns and recession worries

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Alleviate consumer-demand concerns and recession worries: Tyler Richey, editor of Sevens Report Technicals Quoted in MarketWatch

U.S. oil prices settle at highest in 3 weeks as trade-war optimism eases consumer-demand concerns

U.S. benchmark oil prices settled Tuesday at their highest in three weeks, as trade-war optimism helped “alleviate consumer-demand concerns and recession worries,” said Tyler Richey, co-editor at Sevens Report Research.

A multiyear low in annualized U.S. headline inflation was also a “welcomed surprise that effectively poured gasoline on an already raging risk-on fire across financial markets since the better-than-anticipated outcome of the U.S.-China trade negotiations over the weekend,” he told MarketWatch.

A continued relief rally seems to be likely in the weeks ahead, with the $70- to $72-a-barrel range the “first logical upside price target for WTI,” said Richey.

Also, click here to view the full article featured on MarketWatch published on May 14th, 2025. 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.

Understanding the New Bullish Argument

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What’s in Today’s Report:

  • Understanding the New Bullish Argument

Futures are moderately weaker on digestion of the recent rally following a mostly quiet night of news.

There were no notable trade headlines overnight but President Trump did say they were “close” to a nuclear deal with Iran and that is pressuring oil (down 3%). Today there is a lot of potentially important economic data including, in order of importance:   Retail Sales (E: 0.1%), Jobless Claims (E: 229K), PPI (E: 0.2% m/m, 2.4% y/y), Philly Fed (E: -10.0) and Empire Manufacturing (-7.5).  Put simply, the stronger the growth data the better for stocks (pushes back against recession fears) and the lower the PPI reading, the better for stocks (pushes back against inflation fears).

There are two Fed speakers today including Powell (8:40 a.m. ET) and Barr (2:05 p.m. ET) but they commentary is expected to focus on regulation so it shouldn’t move markets.

Finally, there are some notable retail earnings to watch today: WMT ($0.57), BABA ($1.48), DE ($5.68).

The reality of the trade war won’t be as bad as feared back in early April

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The reality of the trade war won’t be as bad as feared back in early April: Sevens Report Analysts Quoted in Investing.com

Where is the ’Trump Put’ now? Analyst weighs in

According to Sevens Report analysts, that rebound is largely thanks to easing fears around trade war escalation and renewed optimism from the Trump administration.

“The reality of the trade war won’t be as bad as feared back in early April,” Sevens wrote, citing a larger-than-expected U.S.-China tariff reduction and “lots of Trump ‘happy talk’ on trade” involving potential deals with the U.K., South Korea, Japan, and India.

But Sevens cautioned investors not to mistake this relief rally for a sustainable bull run. “While I’m enjoying this morning’s rally I remain skeptical this news can push the S&P 500 sustainably towards (or above) 6,000,” the note said.

The more important takeaway, according to the firm, is that the so-called “Trump Put” — the idea that Trump will pivot policy to support markets if stocks fall far enough — appears to have moved higher.

“Markets freaked out in early April because, in part, investors feared the Trump Put wouldn’t occur until the S&P 500 was well in the 4,000s,” Sevens explained. “But the past few weeks implied the Trump Put kicks in somewhere in the mid-to-low 5,000s.”

Also, click here to view the full article featured on Investing.com published on May 12th, 2025. 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.