Market Multiple Levels: S&P 500 Chart

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What’s in Today’s Report:

  • Market Multiple Levels: S&P 500 Chart
  • NFIB Small Business Optimism Index Takeaways

Stock futures are little changed this morning as investors continue to digest the recent sprint to new record highs following a mostly quiet night of news.

Eurozone Industrial Production rose 2.5% vs. (E) 2.3% in November but EU stocks are trading slightly lower due to ongoing, tight economic lockdowns across the continent.

Looking into today’s session there is one economic report to watch this morning: CPI (E: 0.4%), and a “hot” number could trigger a renewed rise in bond yields that would ultimately weigh on stocks.

Meanwhile, there is also a 30-Yr Bond Auction at 1:00 p.m. ET and if demand is strong, as it was for the 10-Yr auction yesterday, that may help stocks stabilize, especially if the inflation numbers come in above expectations.

Finally, it is another busy for the Fed as several officials are scheduled to speak including: Bullard (9:30 a.m. ET), Brainard (1:00 p.m. ET), Harker (2:00 p.m. ET), and Clarida (3:00 p.m. ET), but as long as they all stick to the mostly dovish narrative of recent, they should not have a significant impact on equity markets today.

Update on the Pillars of the Rally (Negative News)

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What’s in Today’s Report:

  • Why Last Week Wasn’t As Positive As the Price Action Implies
  • Weekly Market Preview:  Stimulus Expectations (Thursday) and Bank Earnings
  • Weekly Economic Cheat Sheet:  If the Recovery Losing Further Momentum?

Futures are moderately lower following a generally quiet weekend as markets digest last week’s rally.

News over the weekend was dominated by politics, and it appears President Trump will be impeached again by the House.

But, impeachment will again be largely a theatrical exercise, and markets will ignore it and instead focus details on Biden’s stimulus plan (which will be announced Thursday).

There are no economic reports today and just two Fed speakers, Bostic (12:00 p.m. ET) and Kaplan (6:00 p.m. ET) but neither should move markets.  Instead, yields (do they keep rising?) and any further details about Biden’s stimulus plan (official announcement Thursday) will move markets.

Tom Essaye Quoted in Business Insider India on January 6, 2020

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The potential for a more aggressive regulatory approach from Democrats should have Big Tech investors ready for underperformance, argues Tom Essaye, founder of Sevens Report.

Essaye said in a note, “in the immediate term, markets are pricing in more stimulus. From an equity standpoint, that means tech underperformance and cyclical/value outperformance…” per CNBC. Click here to read the full article.

Tom Essaye Interviewed with BNN on January 7, 2021

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Tom Essaye interiewed with BNN on January 7, 2021., to discuss, the recent rally, U.S. stimulus dispersal will benefit Canadian markets due to an energy-rich makeup and more. Click here to watch the full video.

Tom Essaye Quoted in ETF Trends on January 6, 2021

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“In the immediate term, markets are pricing in more stimulus. From an equity standpoint, that means tech underperformance and cyclical/value outperformance…” Tom Essaye, founder of Sevens Report, said in a note. Click here to read the full article.

The Reason Stocks Rallied Yesterday

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What’s in Today’s Report:

  • The Reason Stock Rallied Yesterday (Despite the Democrat’s Win and Chaos in the Capital)
  • EIA Analysis and Oil Market Update

Futures are modestly higher after Congress certified the Presidential election results late Wednesday night.

Following the chaos at the Capital yesterday, Congress certified Joe Biden’s election win and President Trump committed to an orderly transition.  That will help markets continue to look past the political and civil unrest related to the election, because none of it will ultimately change the outcome and Biden will be inaugurated on January 20th.

Economic data was mixed as EU Retail Sales collapsed (-6.1%) while German Manufacturers Orders beat estimates, but neither number is moving markets.

With the Presidential transition now largely settled, focus will turn back towards economic data and the two key reports today are Jobless Claims (E: 855K) and the ISM Services Index (E: 54.5).  Both are equally important, and markets will want to see continued improvement in claims and stability in the services PMI, as that would imply the economic recovery isn’t losing too much momentum in the face of still surging COVID cases.  Outside of economic data, we also have several Fed speakers including: Harker (9:00 a.m. ET), Bullard (12:00 p.m. ET), Evans (1:00 p.m. ET) and Daly (3:00 p.m. ET), but none of them should move markets.

Tom Essaye Interviewed with TD Ameritrade on January 5, 2021

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Tom Essaye intereviewed with Ben Lichtenstein from TD Ameritrade, discussing the recent oil rally, solar sector, Goldman Sachs and more. Click here to watch the full interview.

What a Blue Wave Would Mean for Markets

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What’s in Today’s Report:

  • What a Democrat-Controlled Senate Would Mean for Markets (Three Risks to Watch)
  • PMI Manufacturing Index Takeaways

Stock futures are modestly higher in cautious trade this morning as investors are largely focused on the Senate runoffs in Georgia today while mostly negative COVID-19 developments continue to weigh on sentiment.

Economically, German data was, on balance, positive o/n, as the unemployment rate held steady at 6.1% as expected while Retail Sales jumped 1.9% vs. (E) -2.0%.

Looking at today’s calendar, there are two domestic economic data points to watch this morning: ISM Manufacturing Index (E: 56.5) and Motor Vehicle Sales (E: 15.7M), and two Fed officials are scheduled to speak in the afternoon: Evans (3:45 p.m. ET) and Williams (3:45 p.m. ET).

But, the markets will remain most interested in the Georgia Senate runoffs today as the threat of a “Blue Wave” outcome would mean potentially higher taxes and more regulation which would largely offset hopes for more, massive stimulus measures.

COVID-19 has also had an impact on markets so far this week as new lockdowns in the U.K. and the discovery of the faster spreading strain of the coronavirus in upstate New York have weighed on sentiment and threaten to become increasing market headwinds in early 2021.

Politics and Vaccines (The First Important Events of 2021)

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What’s in Today’s Report:

  • Politics and Vaccines (The First Important Events of 2021)
  • Weekly Market Preview:  All About Politics (Georgia runoof) and Vaccines (When do we get the JNJ data?)
  • Weekly Economic Preview:  An Important Week for Markets to Start a New Year

Futures are starting the new year moderately higher despite mixed economic data, as momentum from the end of 2020 is continuing to push stocks higher.

Economic data was mixed as the EU final manufacturing PMI missed estimates (55.2 vs. (E) 55.5) while the UK reading slightly beat estimates (57.5 vs. (E) 57.3).

Politically, some Republicans will challenge the election result, but Biden will be certified the winner and the key political event this week remains the Georgia Senate run-off (and it could provide a potential surprise).

Today focus will be on the December PMI Manufacturing Index (E: 56.5) because it’ll give us more insight into just how much momentum the U.S. economy has lost during this recent COVID spike.  There are also three Fed speakers, Evans & Bostic at 10:00 a.m. and Mester at 12:15 p.m., but they shouldn’t move markets.

Tom Essaye Quoted in Gulf Business on December 31, 2020`

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“Investors continue to weigh stimulus hopes against negative pandemic…” Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter, wrote to clients. Click here to read the full article.