Tom Essaye interviewed with Thomas White from TD Ameritrade Network, where he discussed covid19 vaccine, sectors to buy, value stocks, election, stocks on the downside, & more…Watch the full interview here.
What’s in Today’s Report:
Futures are slightly lower as markets further digest the week’s rally following a quiet night of news.
The outlook for a stimulus bill to occur in 2020 has dimmed due to the looming Georgia Senate run-offs on Jan 5th, and that’s created a mild headwind on stocks.
On the vaccine front, Moderna (MRNA) announced that its Phase 3 trial accrued enough COVID-19 cases to be able to submit findings to regulators, so results are imminent (i.e. any day or over the next few weeks).
Today the key report is Jobless Claims (E: 741K) and markets will want to continue to see those numbers decline (or at least stay stable) as it’s looking more and more likely that stimulus will be delayed into 2021. We also get CPI (E: 0.2%, 1.3%) and comments from Fed Chair Powell (9:30 a.m. ET), but neither should move markets unless there’s a big surprise lurking.
What’s in Today’s Report:
Daily new cases of the coronavirus hit a new high of over 135,000 in the U.S. yesterday while hospitalizations also hit record levels however investors continue to hold out hope that a vaccine will halt the spread in the coming months and the economy will be quick to normalize.
There are no economic reports today and no Fed officials are scheduled to speak which will leave investors focused on the timeline for the widespread availability of a vaccine and more importantly how quickly it will result in economic normalization.
The election remains a secondary influence on the market as well with Biden having declared victory over the weekend while Trump continues to file lawsuits in swing states about alleged voter fraud. Any further clarity or resolution on the election should act as a tailwind for markets in the near term as it will pull forward the timeline for the next coronavirus aid package.
“While there will be some discussion about how many people will take the vaccine, and some consternation that it’s a two-dose vaccine that takes 28 days to achieve effectiveness…” writes The Sevens Reports’ Tom Essaye. Click here to read the full article.
Amid news of a successful Covid-19 vaccine, the S&P 500 making a run to the 3,900 level is possible, according to editor of the Sevens Report, Tom Essaye. “It is materially bullish for stocks in the near term…” Essaye told clients. Click here to read the full article.
What’s in Today’s Report:
Stock futures are little changed this morning after wavering between gains and losses overnight as investors eye rising COVID-19 cases, an uptick in lockdown measures in the U.S., as well as stimulus and vaccine uncertainties.
Several economic reports in the EU including the German ZEW Survey as well as the U.S. NFIB Small Business Optimism Index missed estimates which is acting as a headwind on stocks this morning.
Looking into today’s session there is one economic report to watch: September JOLTS (E: 6.508M) and two Fed officials are scheduled to speak: Rosengren (10:00 a.m. and 4:00 p.m. ET) and Brainard (5:00 p.m. ET).
Additionally, the Treasury will hold a 10-Yr Note action at 1:00 p.m. ET and with the massive steepening we saw in the yield curve yesterday, the outcome could influence a further steepening trend which will eventually become a headwind for equities.
Outside of those potential catalysts, investor focus will remain on emerging details about the COVID-19 vaccine, specifically when it will be available and how it may impact the next stimulus package from Congress.
What’s in Today’s Report:
Futures have exploded to new all-time highs on positive vaccine results from Pfizer, combined with election uncertainty.
Pfizer just released results stating its COVID-19 vaccine is more than 90% effective in preventing COVID-19 infection among people who had not been previously infected. That 90% is much higher than was expected.
Election clarity had stocks higher pre-vaccine news as Biden was projected to win the Presidency.
Today it’s all about momentum and as stocks should surge led by value, cyclicals and the “Get out and spend” sectors.
“Ultimately, the markets, want clarity and the main threat to risk assets this week is the emergence of a contested election…” Tom Essaye, founder of The Sevens Report, wrote in a note. Click here to read the full article.
Stock investors may be in something of a “post-election fog” or a “drunken euphoria” about an apparent quick conclusion to the presidential race but may also be repricing expectations for economic growth, says Tom Essaye, director of Sevens Report Research. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately lower mostly on digestion of this week’s massive rally, although the political news over the last 24 hours was a slight negative for markets.
Biden continued to move closer to securing 270 Electoral College votes and is now leading in Georgia, Arizona, and Nevada, and some of those states may be called today.
However, both Georgia Senate races appear headed to a runoff in early January, and that could delay stimulus into early 2021 (this is the “reason” for the weakness in futures, other than just digestion).
Today focus will remain on the election as several states could be called, effectively ending the election (court cases will continue but as of yet none appear powerful enough to overturn the apparent result).
Economically, the jobs report will be in focus and the expectations are as follows: Job Adds: 600K, Unemployment Rate: 7.7%. A number moderately better than expectations (that’s strong enough to reflect a good recovery but not so strong that the amount of expected stimulus starts to move lower) is the best outcome for stocks.