Why Stocks Rallied

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What’s in Today’s Report:

  • Why Stocks Rallied Yesterday

Futures are modestly lower this morning as yesterday’s record highs are digested while more positive vaccine news is being offset by yesterday’s mixed stimulus headlines.

News broke overnight that the U.K. approved Pfizer’s COVID-19 vaccine for emergency use as early as next week, although the market reaction was limited as vaccine hopes are already largely priced in with stocks at or near records.

Economic data was mostly upbeat overnight with German Retail Sales and Eurozone Unemployment both beating estimates however the stimulus stalemate continues to weigh on the global growth outlook right now.

Today, there are two economic reports to watch as the ADP Employment Report (E: 420K) kicks off jobs week while Motor Vehicle Sales (E: 16.1M) will be released later in the morning.

There are multiple Fed speakers today including: Quarles (9:00 a.m. ET), Williams (9:00 a.m. ET & 1:00 p.m. ET), and Powell (10:00 a.m. ET) with the bulk of the focus remaining on the Fed chair’s second day of testimony before Congress.

Bottom line, investors are focused on stimulus right now, underscored by the fact that there was not a more pronounced reaction to the Pfizer vaccine approval news overnight, so until we gain more clarity on the size and scope of the next coronavirus aid package, it may be difficult for stocks to continue to grind to new record highs in the very near term.

Tom Essaye Interviewed with BNN Bloomberg on November 30, 2020

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Sevens Research Report Founder and President Tom Essaye interviewed with BNN Bloomberg, says the clarity in the Biden administration and on vaccine development that took place in November is giving investors…Click here to watch the full interview.

Perspective on Value vs. Growth

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What’s in Today’s Report:

  • Value vs. Growth (Perspective)
  • OPEC+ Meeting and What’s Next for Oil Prices

Equity futures are broadly higher as this week’s positive vaccine news and strong PMI data spur optimism for continued growth as we start the final month of the year.

November Manufacturing PMIs across Asia and Europe largely topped estimates overnight suggesting economic growth is continuing to firm despite the lack of stimulus.

Looking into today’s session, traders will look for a continued trend of better than expected economic data in the two notable reports due to be released: ISM Manufacturing Index (E: 57.5) and Construction Spending (E: 0.8%) as underwhelming data will rekindle fears that the recovery is losing steam, especially in the U.S. where coronavirus statistics are concerningly elevated.

There are also several Fed speakers today: Powell (10:00 a.m. ET), Brainard (11:00 a.m. ET), Daly (1:15 p.m. ET), and Evans (3:00 p.m. ET) however the focus will clearly be on Chair Powell’s Congressional testimony, alongside Treasury Secretary Mnuchin, regarding the CARES Act as investors assess the outlook for more stimulus in the months ahead.