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The Canary in the Coal Mine for Memory

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What’s in Today’s Report:

  • The Canary in the Coal Mine for Memory
  • Advisor Advantage: 12 Ways to Save Money on Gas This Summer (Client Material)

Futures are slightly lower following tit-for-tat missile/drone strikes between the U.S. and Iran.

The U.S. and Iran traded limited missile/drone attacks although the moves were “defensive” and ceasefire expectations remain intact.

Barring a ceasefire agreement or major escalation between the U.S. and Iran, the focus today will be on economic data and the key reports are, in order of importance: Core PCE Price Index (E: 0.3% m/m, 3.3% y/y), Durable Goods (E: 2.8%), Jobless Claims (E: 213K), Q1 GDP (E: 2.1%),  New Home Sales (E: 662K).  For these economic releases the key is solid activity and stable prices, as that will push back on stagflation concerns.

Today also brings numerous Fed speakers including Williams (8:55 a.m.), Musalem (10:15 a.m.) and Barkin (3:00 p.m.).  Of the three, Williams is the most important because he’s part of Fed leadership and if he hints at an openness to rate hikes it will be a headwind on stocks.

Finally, on the earnings front, the key report today will be DELL ($2.79) because it pertains to AI but two notable consumer reports are BBY ($1.22) and COST ($4.91).  For these earnings the stronger, the better for markets.

 

Alpha Report: The AI Trade Is Evolving Beyond Chips and Mega-Cap Tech

The AI trade is no longer just about semiconductors and the “Magnificent Seven.” In this week’s Alpha Report, we examine how AI spending is beginning to ripple through other parts of the economy and market, creating potential opportunities beyond the obvious names that have already surged.

Specifically, we break down where AI-related capital spending is flowing next, which sectors and industries may quietly benefit from the second-order effects of the buildout, and how investors can think about positioning if the AI trade broadens from here.

The report is designed to help you move beyond the headlines and better explain to clients where the next phase of the AI investment cycle may emerge.

👉 Access the full report and analysis here: Sevens Report Alpha

Could Earnings Be More Important than War This Week?

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What’s in Today’s Report:

  • Could Earnings Be More Important than War This Week?
  • Weekly Market Preview: Will Earnings Be Strong Enough to Offset any Geopolitical Disappointment?
  • Weekly Economic Cheat Sheet: Fed Decision on Wednesday (Will They Still Point to Rate Cuts?)

Futures are little changed despite no ceasefire meeting between the U.S. and Iran over the weekend.

There were no additional ceasefire talks over the weekend but markets still view the ceasefire process as ongoing, so the “no meeting news” isn’t hitting stocks.

Economically, the only notable report was German Gfk Consumer Climate and it missed estimates (-33 vs. (E) -30).

This week could be very important for the rally as we have critical earnings, a Fed decision on Wednesday and potential progress on the reopening of the Strait of Hormuz all looming. But, the week starts quietly as there are no notable economic reports today, so any U.S./Iran ceasefire deal headlines should continue to drive markets.

On earnings, this is the most important week of the reporting season (especially Thursday) and some results we’re watching today include: VZ ($1.22), DPZ ($4.29), CLS ($1.98), NUE ($2.79) and UHS ($5.29).

 

Why the Fed’s Job Is Getting Harder

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What’s in Today’s Report:

  • Why the Fed’s Job Is Getting Harder

Futures are modestly lower despite an extension of the ceasefire negotiations between the U.S. and Iran.

President Trump announced a 10-day extension of pause on attacks on Iran’s infrastructure as talks are going “well.”

Despite positive rhetoric, the U.S. continued to mass troops in the region,  keeping escalation fears elevated.

Today focus will remain on geo-politics but in order for markets to sustainably rally, we’ll need to see some sort of confirmation of ceasefire progress from Iran, as the actions of the U.S. military (increased troops in the region) are offsetting the President’s positive comments.

Outside of geo-politics, we also get Consumer Sentiment (E: 54.3) and three Fed speakers, Barkin (11:00 a.m. ET), Daly (11:30 a.m. ET) and Paulson (11:35 a.m. ET), but they shouldn’t move markets.

 

The Two Specific Reasons Stocks Dropped Last Week

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What’s in Today’s Report:

  • The Two Specific Reasons Stocks Dropped Last Week
  • Weekly Market Preview: Will Oil Keep Rising? (The Sooner the Strait of Hormuz Reopens, the Better)
  • Weekly Economic Cheat Sheet: CPI in Focus on Wednesday (Markets Need a Tame Number)

Futures are sharply lower on surging oil prices (oil is above $100/bbl) as there was no progress on a ceasefire between the U.S. and Iran or reopening the Strait of Hormuz.

Iran selected the Ayatollah’s son, Mojtaba Khamenei, as supreme leader, confirming that headliners are still in charge and reducing hopes of a near term ceasefire.

Iran damaged a desalination plant in Bahrain, continuing attacks on neighbor’s energy and general infrastructure (this is contributing to the rise in oil).

Today there are no economic reports so focus will remain squarely on Iran.  Any headlines that imply de-escalation should trigger a solid rebound from the early lows while any new attacks on energy infrastructure will boost oil prices and weigh on stocks.