Tom Essaye, Sevens Report Research Founder, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss what’s moving the markets on Monday morning. Click here to watch the full interview.
What’s in Today’s Report:
Futures are lower amid rising concerns that the outcome of the presidential election may be contested following last night’s debate while there has been little to no progress on fiscal stimulus (at home or abroad) in the face of quickly rising new COVID-19 cases.
Economically, China’s official Manufacturing PMI rose to 51.5 vs. (E) 51.2 in September thanks to strong export orders which helped ease concerns about the health of the global economic recovery.
Looking to today’s calendar, we will receive our first look at September labor market data via the ADP Employment Report (E: 650K) as well as Final Q2 GDP (E: -31.7%), both ahead of the open while the Pending Home Sales report (E: 3.1%) will be released shortly after the bell.
Additionally, there are three Fed speakers today: Kashkari (9:30 a.m. ET), Bowman (1:40 p.m. ET), and Kaplan (6:00 p.m. ET) and the market expects all of them to maintain a very dovish tone.
Bottom line, investors will remain focused on two main factors today: 1) Will speaker Pelosi and Treasury Secretary Mnuchin pull off a last minute stimulus deal before the election (not expected)? And 2) what are the chances the presidential election is contested (the higher the chances the more negative for markets)?
“By giving the market a lot lodging … the Fed has primarily created a spoiled youngster the place nothing’s sufficient…” Tom Essaye, founder and president of Sevens Analysis, tells Axios. Click here to read the full article.
What’s in Today’s Report:
Stock futures are flat following a mostly quiet night of news as traders begin to look ahead to tonight’s debate between President Trump and former VP Biden.
The only economic release o/n was Eurozone Economic Sentiment which beat on the headline (91.1 vs. E: 89.5) but had soft details which is weighing modestly on EU shares.
House Democrats presented a $2.2T relief bill late yesterday but realistically it will not be passed before election day, and therefore is not having a significant impact on markets this morning.
Today, there are two economic reports, the latter of which will be more important to watch: Case-Shiller House Price Index (E: -0.1%) and Consumer Confidence (E: 88.8) while there is just one Fed official scheduled to speak (twice): Williams (9:15 a.m. & 1:00 p.m. ET).
With the debate looming tonight, the focus will be on politics and the latest attempt at a stimulus bill by Congress. And barring any unexpected progress on getting a stimulus deal done in the very near term, markets are lining up to have a relatively quiet session today.
What’s in Today’s Report:
Futures are sharply higher thanks mostly to momentum from Friday’s rally, although there were incrementally positive headlines on stimulus and coronavirus over the weekend that are also helping stocks rally this morning
Speaker Pelosi made optimistic comments on a pre-election stimulus deal, but nothing specific was mentioned.
On the coronavirus front, cases keep rising, but news that Florida was fully reopening and European countries were planning more surgical shutdowns both helped sentiment.
Today there are no notable economic reports and no Fed speakers, so markets will be focused on whether the S&P 500 can hold Friday and this mornings’ gains. From an influence standpoint, in the near term coronavirus cases and stimulus hopes are driving markets, and any incrementally negative headlines on either topic will risk seeing Friday’s gains given back.
What’s in Today’s Report:
Futures are little changed as markets digest Wednesday’s selloff following a quiet night of news.
Economic data was mixed as German Ifo Business Expectations slightly missed estimates (97.7 vs. (E) 98) while British Distributive Trades (retail sales) beat (10% vs. (E) -11%).
Today the key report will be weekly Jobless Claims, which are forecast to move up to 880K. If weekly claims are worse than expectations, concerns will grow that the economic recovery is indeed plateauing (and remember we’re almost certainly not getting stimulus until late November/early December, at the earliest). We also get the latest look at New Home Sales (E: 875K).
Finally, there is a veritable parade of Fed speakers today: Kaplan (8:50 a.m. ET), Bullard (12:00 p.m. ET), Barkin (1:00 p.m. ET), Evans (1:00 p.m. ET), Williams (2:00 p.m. ET), Bostic (2:00 p.m. ET), Powell (10:00 a.m. ET). Of those speaking, Powell is clearly the most important, but we don’t expect him to say anything new (and as such the market should ignore pretty much all of it).
What’s in Today’s Report:
Futures are rallying with international shares this morning as investors digest soft economic data and look ahead to another day of Powell’s testimony before Congress.
The EU PMI Composite Flash missed estimates this month (50.1 vs. E: 51.7) due to an unexpected drop in the services index but the weakness is bolstering stimulus hopes.
Turning to the U.S. session, there are two economic reports to watch this morning: FHFA House Price Index (E: 0.6%) and the PMI Composite Flash (E: 54.5). The latter will be the important one to watch as investors will be looking to see if the service index “whiffed” as it did in Europe which would up the pressure on lawmakers to pass a new stimulus bill.
Beyond the data, there is a slew of Fed speak today including: Mester (9:00 a.m. ET), Evans (11:00 a.m. ET), Rosengren (12:00 p.m. ET), Bostic (1:00 p.m. ET), Kashkari (1:00 p.m. ET), and Daly (3:00 p.m. ET), however Chair Powell’s second day of testimony before Congress (beginning at 10:00 a.m. ET) will be the most closely watched as the market continues to look for affirmation that more accommodation and stimulus are on the way.
The trouble is that there is still plenty of froth around, says Bloomberg. The recent mini-crash wiped $2trn off stock valuations, but trading data shows that bullish retail investors, who often buy in through apps like Robinhood, remain “unbowed”. As Tom Essaye of The Sevens Report newsletter puts it, the recent pullback was “not even close to scary…” Click here to read the full article.
What’s in Today’s Report:
Stock futures are wavering between gains and losses this morning while international markets were mixed overnight amid a continued rise in COVID-19 cases clouding the outlook for the global economic recovery.
There were no market-moving economic reports overnight however new coronavirus cases topped 50,000 in the U.S. yesterday, a more than one-month high, suggesting the resurgence in the outbreak may not be limited to Europe.
Today, there is one economic report to watch: Existing Home Sales (E: 5.965M) and the Chicago Fed’s Evans will speak at 10:00 a.m. ET but the market’s main focus will be Chair Powell’s testimony before congress, alongside Treasury Secretary Mnuchin, beginning at 10:30 a.m. ET.
Powell and Mnuchin are expected to reiterate concerns about the fragile state of the economic recovery and as long as they remain extremely dovish/accommodative, it should help markets begin to stabilize following the recent, near-10% pullback in the S&P 500.
What’s in Today’s Report:
Futures are sharply lower as concerns mount that surging coronavirus cases in Europe will cause another economic lockdown.
Coronavirus cases in multiple European countries, including the UK, France, and Spain, are back near March highs, and concerns are rising those governments will re-implement economically crippling lockdown measures.
Politically, the death of Ruth Bader Ginsburg will make the election even more heated, but it should not have any direct impact on the markets.
Today there are no notable economic reports or market-moving Fed speakers, so focus will turn towards Europe as weakness in those markets drove U.S. futures lower. If Europe can bounce into their close (11:30 a.m.) than U.S. stocks could as well.
