Latest news with #TomEssaye
CNBC
26-06-2025
- Business
- CNBC
The latest stock market rally has another driver in its favor
The S & P 500 has been knocking on the door of its all-time high as trade tensions ease and the Iran-Israel conflict appears to be halted thanks to a ceasefire. And another counterintuitive driver could keep the gains going: neutral investor sentiment. Tom Essaye, founder of The Sevens Report, highlighted Thursday that investors haven't become overly bullish in the S & P 500's rebound from the April lows. He noted that the AAII Investor Sentiment Survey showed bulls at 33.2% — a slight decline from last month, while CNN's Fear/Greed Indicator sits at 60%, only "slightly in the 'Greed' range." On top of that, "Investors Intelligence Advisor Sentiment Survey has a Bulls/Bears spread of 10.2%, a still cautious reading," he said. Yet, the S & P 500 sits less than 1% below its record high set in February, following a more than 20% bounce since the April 8 close. .SPX bar 2025-04-08 SPX since April 8 "This implies that, despite the impressive rebound, it is not being matched with the type of bullish sentiment we'd typically associate with a near-term top. As such, this remains a somewhat 'hated' rally from an investor standpoint and that implies it can keep going," Essaye noted. To be sure, risks to the rally remain. If trade negotiations between the U.S. and other countries break down, and/or tensions in the Middle East spike again, the rally to record levels could be derailed. There's also the Federal Reserve. Despite President Donald Trump's gripes with Chair Jerome Powell, expectations for Fed rate cuts this year have declined. BlackRock's Rick Rieder said Wednesday he only sees two decreases , starting in September. For now, "sentiment remains much more balanced and neutral than the price action would imply. That's a near-term positive as investors remain skeptical and that could well fuel continued upside as long as macro influences (tariffs, geopolitics, economic growth) remain broadly stable and don't give us any negative surprises," wrote Essaye.
Yahoo
17-06-2025
- Business
- Yahoo
Why markets are ignoring scary headlines about Iran, trade wars and U.S. debt
Despite a deluge of adverse events, including trade wars and kinetic wars, oil-price spikes and other geopolitical strife, most developed equity markets are trading at or near all-time highs. Strategist Tom Essaye explained why markets appear relatively immune to the negative headlines in the Sevens Report, his daily market-strategy note. The most immediate threat to the stability of risk assets in the past week has been the sudden outbreak of hostilities between Israel and Iran. Typically, investors would take fright at the jump in energy prices — West Texas oil futures WBS.1 rose from less than $60 in May to $75 on Friday — and bond markets would fret about inflationary pressures. Israel-Iran clash delivers a fresh shock to investors. History suggests this is the move to make. 'I prepaid our mom's rent for a year': My sister is a millionaire and never helps our mother. How do I cut her out of her will? These defense stocks offer the best growth prospects, as the Israel-Iran conflict fuels new interest in the sector 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. My friend is getting divorced. Her husband offered to sign over their house. What's he hiding? However, Iran's military capabilities have been so degraded, Essaye wrote, that Tehran's ability to respond to Israel's missile strikes and to counter its overall military superiority is severely inhibited. Moreover, Iran, owing to long-established sanctions, is no longer a big exporter of crude oil, while the U.S is a net exporter of oil (unlike during the 1970s oil-price shock) and the Saudis have plenty of spare capacity they can tap if supplies are seriously imperiled. A second well-established hazard for risk assets is U.S. President Donald Trump's tariff fight, which could undermine global economic activity, slow U.S. economic growth and supercharge inflation. So why aren't investors panicking? According to Essaye, tariff fatigue has caused complacency to set in. There are too many headlines and deadlines for the average investor to follow accurately, and markets now routinely dismiss Trump's ultimatums as bluff and bluster, as evidenced by the recent coinage 'TACO,' or 'Trump Always Chickens Out.' The next significant deadline is July 9, the end of the 90-day pause in the imposition of Trump's tariffs, and at that time markets may well reassess their current phlegmatic approach. Right now, however, Essaye believes that 'markets are so [convinced about] TACO that it's going to take a sustained tariff increase to shake the belief.' The third scare that should be sounding alarm bells for markets is the mounting U.S. fiscal deficit and the seeming inability of the U.S. government to bring down spending. The massive tax and spending bill now being considered by the Senate will probably aggravate this situation, and bond-market analysts might have expected a much bigger increase in long-term U.S. bond yields BX:TMUBMUSD30Y than has been seen. Essaye cited the example of the U.K. bond market being thrown into chaos by the proposed budget of then-Prime Minister Liz Truss in 2022. After recently piercing the 5% level, though, 30-year Treasury bonds have rallied, implying that investors are not yet sufficiently worried about the U.S. fiscal situation to sell off Treasury bonds aggressively, Essaye wrote. 'If the 10-year yield BX:TMUBMUSD10Y begins to creep towards and through 5.00%, that will be a signal that the global bond markets are starting to worry about the U.S. fiscal situation and at that point, markets will care about deficits and debt, a lot! (and we should expect stocks to be sharply lower),' he said. The last major threat to the stability of risk-asset prices would be a marked U.S. economic slowdown. Data suggest the economy is losing momentum, with the Institute for Supply Management purchasing managers index currently languishing below the 50 level that denotes economic contraction. Meanwhile, uncertainty over trade, monetary and economic policy continues to hang over the market. In the last five years or so, the U.S economy has demonstrated astonishing resilience, Essaye pointed out, most notably during the pandemic and the inflation scare of 2022. None of the data points so far are bad enough to massively increase slowdown concerns, and the Federal Reserve has demonstrated its skill in piloting monetary policy. At this stage, he said, investors are giving the economy, the government, the Fed and risk-asset prices the benefit of the doubt. My husband is in hospice care. Friends say his children are lining up for his money. What can I do? My mother-in-law thought the world's richest man needed Apple gift cards. How on Earth could she fall for this scam? 'It might be another Apple or Microsoft': My wife invested $100K in one stock and it exploded 1,500%. Do we sell? 'I'm not wildly wealthy, but I've done well': I'm 79 and have $3 million in assets. Should I set up 529 plans for my grandkids? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? 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Yahoo
13-06-2025
- Business
- Yahoo
US stocks open lower after Israel attacks Iran. Oil prices soar on disruption worry
U.S. stocks opened sharply lower and oil prices jumped after Israel launched airstrikes against Iran. Israel's defense minister Israel Katz declared a special state of emergency following the attack. Iran has launched retaliatory drone strikes on Israel. Israel said it was ready for more and it has planned out 14 days of operations. At 9:33 a.m. ET, the blue-chip Dow slid 1.15%, or 494.30 points, to 42,473.32; the broad S&P 500 dropped 0.7%, or 42.12 points, to 6,003.14; and the tech-laden Nasdaq shed 0.79%, or 154.53 points, to 19,507.96. The benchmark 10-year Treasury yield inched up to 4.386%. Oil prices soared about 8% on fears supply will be disrupted due to the conflict. Gold and the U.S. dollar rose as investors flocked to safer assets. Even with global stocks declining on news of the attack, analysts weren't worried yet about a lasting effect. "The main risk for markets is this conflict leads to a broader war in the Mid-East although, for now, those risks remain relatively low despite elevated tensions," said Tom Essaye, founder and president of Sevens Report Research. Natasha Kaneva, head of global commodities research at JP Morgan, said she sees a "17% probability of a worst-case scenario" that oil prices would spike exponentially. So far, "at least, Israel has not directly targeted Iran's oil supply, which appears to be unaffected," said Matthew Ryan, head of market strategy at global financial services firm Ebury. "The big fear for investors is that an escalation to the tensions will not only raise the risk of a prolonged conflict, but it could disrupt Iranian oil production." President Donald Trump urged Iran to negotiate a nuclear deal. "There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end," he wrote in a social media post. Before the attack, all three major indexes had closed the regular session higher, lifted by renewed optimism for artificial intelligence after Oracle's quarterly results topped estimates. The software company also issued a positive outlook. That was enough to overcome a slump in Boeing shares after one of its Dreamliners crashed in India. All but one person on the flight died. Trade news continues to worry some investors after Trump said he might raise the 25% tariff on imported vehicles to encourage more investment in U.S. manufacturing. Adobe's results in the second quarter of the company's fiscal year topped estimates. The software company also raised its third-quarter outlook above Street forecasts. Shares dropped 6%. RH swung to a quarterly profit and beating analysts' estimates, despite tariff uncertainty and a shaky housing market. Shares jumped 23.63%. Walmart, Amazon and Expedia have recently explored whether to issue their own stablecoins in the U.S., the Wall Street Journal reported. Their final decisions would depend on a bill, called the Genius Act, which would begin to establish a regulatory framework for stablecoins, the story said. Stablecoins could save the merchants money, including the interchange fee they pay when customers make purchases using their cards, and receive payments faster, the WSJ said. Bitcoin was last down 0.88% at $104,970.00. (This story was updated with new information.) Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@ and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday. This article originally appeared on USA TODAY: US stocks start lower after Israel strikes Iran. Oil spikes Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
11-06-2025
- Business
- Time of India
Asian stocks to track US gains on trade talk hopes
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Stocks in Asia are set to follow gains on Wall Street as investors monitor trade discussions between the US and China that Commerce Secretary Howard Lutnick said were 'going really, really well.'Equity futures pointed to advances in Sydney, Tokyo and Hong Kong after the S&P 500 closed 0.6% higher. Tesla Inc. led gains in megacaps. Bonds barely budged after a $58 billion sale of three-year notes, the first in a trio of offerings that will culminate in Thursday's sale of 30-year debt. The dollar saw small moves ahead of a key inflation report, while Bitcoin tested its record between the US and China extended into their second day in London, with a Treasury official saying the teams were trying to iron out technical details.'Any materially positive or negative trade-talk headlines out of London, where US and Chinese negotiations remain underway, could meaningfully move markets,' said Tom Essaye at The Sevens Wednesday is expected to show US consumers probably saw slightly faster inflation in May, notably for merchandise, as companies gradually pass along higher import duties. That may reinforce the Federal Reserve's wait-and-see stance toward further easing as it assesses the impact of tariffs, with traders increasingly betting that the central bank will cut interest rates just once this of goods and services, excluding volatile food and energy costs, are expected to show a 0.3% advance in May, the most in four months. The so-called core consumer price index, which is regarded as a better indicator of underlying inflation, is seen accelerating for the first time this year — to 2.9% — on an annual basis, based on the median projection.A survey conducted by 22V Research showed 42% of investors believe that the market reaction to CPI data will be 'risk-on', 33% said 'mixed' and 25% 'risk-off'. It's the first time the reaction has favored risk-on since August 2024, 22V said.'The combination of the May inflation figures and upcoming Treasury supply will provide investors tradable events and add to the market's collective understanding of the early fallout from the trade war as well as demand for US debt in the current environment,' said Ian Lyngen at BMO Capital on long-term global debt have soared in recent weeks as concern over spiraling debt and deficits led some investors to shun the securities and prompted others to demand a higher premium for the risk of lending to betting that yields on long-dated Treasuries will keep rising faster than those on shorter notes risk getting burned, according to BNP Paribas SA's Guneet Dhingra. He said 30-year bonds already price in the worsening fiscal picture and could rebound if there's strong demand for an auction or deficit fears ease.
Economic Times
11-06-2025
- Business
- Economic Times
Asian stocks to track US gains on trade talk hopes
Stocks in Asia are set to follow gains on Wall Street as investors monitor trade discussions between the US and China that Commerce Secretary Howard Lutnick said were 'going really, really well.' ADVERTISEMENT Equity futures pointed to advances in Sydney, Tokyo and Hong Kong after the S&P 500 closed 0.6% higher. Tesla Inc. led gains in megacaps. Bonds barely budged after a $58 billion sale of three-year notes, the first in a trio of offerings that will culminate in Thursday's sale of 30-year debt. The dollar saw small moves ahead of a key inflation report, while Bitcoin tested its record high. Talks between the US and China extended into their second day in London, with a Treasury official saying the teams were trying to iron out technical details. 'Any materially positive or negative trade-talk headlines out of London, where US and Chinese negotiations remain underway, could meaningfully move markets,' said Tom Essaye at The Sevens Wednesday is expected to show US consumers probably saw slightly faster inflation in May, notably for merchandise, as companies gradually pass along higher import duties. That may reinforce the Federal Reserve's wait-and-see stance toward further easing as it assesses the impact of tariffs, with traders increasingly betting that the central bank will cut interest rates just once this of goods and services, excluding volatile food and energy costs, are expected to show a 0.3% advance in May, the most in four months. The so-called core consumer price index, which is regarded as a better indicator of underlying inflation, is seen accelerating for the first time this year — to 2.9% — on an annual basis, based on the median projection. ADVERTISEMENT A survey conducted by 22V Research showed 42% of investors believe that the market reaction to CPI data will be 'risk-on', 33% said 'mixed' and 25% 'risk-off'. It's the first time the reaction has favored risk-on since August 2024, 22V said.'The combination of the May inflation figures and upcoming Treasury supply will provide investors tradable events and add to the market's collective understanding of the early fallout from the trade war as well as demand for US debt in the current environment,' said Ian Lyngen at BMO Capital Markets. ADVERTISEMENT Yields on long-term global debt have soared in recent weeks as concern over spiraling debt and deficits led some investors to shun the securities and prompted others to demand a higher premium for the risk of lending to governments. Investors betting that yields on long-dated Treasuries will keep rising faster than those on shorter notes risk getting burned, according to BNP Paribas SA's Guneet Dhingra. He said 30-year bonds already price in the worsening fiscal picture and could rebound if there's strong demand for an auction or deficit fears ease. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
