Why the “Pain Trade” Remains Higher

What’s in Today’s Report:

  • Why the “Pain Trade” Remains Higher
  • Bullish Reversal in the Dollar Forming – Chart

Stock futures are slightly lower this morning as traders digest disappointing economic data from overseas and look ahead to today’s debt ceiling negotiations.

Economically, Chinese Fixed Asset Investment slowed in April while Industrial Production came in at just 5.6% vs. (E) 10.7% and Retail Sales rose to 18.4% vs. (E) 22.0%. The underwhelming data is continuing to pour some cold water on hopes that a robust recovery in China will help support broader growth in the global economy this year.

Looking into today’s session there are several economic releases to watch in the U.S. including (in order of importance): Retail Sales (E: 0.7%), Industrial Production (E: 0.0%), and the Housing Market Index (E: 45). Specifically, if Retail Sales is disappointing, that could rekindle hard-landing fears and pressure stocks.

Several Fed officials are also expected to speak today: Mester (8:15 a.m. ET), Bostic (8:55 a.m. ET), Williams (12:15 p.m. ET), and Logan (3:15 p.m. ET). A more cautious tone regarding policy plans would be welcomed while any decidedly hawkish commentary is likely to pressure markets.

Finally, the main focus today will be the debt ceiling talks between the Biden Administration and House Republicans as we are fast approaching the “X date” and prospects of a deal being reached remain very uncertain. Any reported progress on the topic will be well-received today and likely result in a modest relief rally but if concerns about the debt ceiling increase, expect equities to come under pressure.


Sevens Report Technicals – Discounted Subscription Offer for Sevens Report Subscribers Ends Today!

Response to our announcement of Sevens Report Technicals has been tremendous, and we have been thrilled with the feedback we have received on the first few issues.

Sevens Report Technicals is similar in look and feel to the special technical report we delivered to subscribers in late April which can be viewed here.

This week’s edition was packed with value-add analysis including a bullish shift in the outlook for the Dollar Index (not good for stocks) and a deep dive into some key measures of market breadth, which remain historically weak right now.

During this launch phase we have offered an additional month free on any quarterly ($75 value) or annual ($150 value) subscription.

With a one-month “grace period” during which you can receive a full refund for any reason, you take no risk trying Sevens Report Technicals to see if it’s a complement to your business or investment process.

To start your risk-free trial subscription, please send an email to info@sevensreport.com.

To learn more about Sevens Report Technicals, click this link.