What’s in Today’s Report:
- Why the Next Six Weeks Will be Critical for this Market
- Weekly Market Preview: Fed Tapering Plans Revealed
- Weekly Economic Cheat Sheet: What’s the State of the Global Recovery?
Futures are sharply lower on momentum from Friday’s declines, following a quiet weekend of news.
The reasons for the drop this morning are the same as last week: China concerns (Evergrande, regulation, COVID), Fed tapering, and possible tax hikes, but nothing new occurred on any of those fronts this weekend to justify this mornings’ declines (meaning this is more about momentum than actual fundamental deterioration).
On taxes, headlines were actually slightly positive as Axios reported Senator Manchin wants to delay any increased spending/tax hikes until 2022.
Today the calendar is quiet as the only economic report is the Housing Market Index (E: 75), so pre-Fed positioning and momentum will drive trading today. Ideally, we’d like to see stocks open deeply lower and then rally throughout the day (which would be the opposite of what we saw last week and imply a near-term bottom may be in).