Now, the dollar is testing a critical level. The index had the dollar at 89.95 by mid morning on Friday, while the nearest support level for the greenback is 89.13, according to analysis from The Sevens Report Research. A drop of 0.9% from the current level is all it would take to hit…Click here to read the full article.
What’s in Today’s Report:
Futures are down nearly 2% this morning as concerns about a coronavirus mutation offset news of a stimulus deal being reached.
England went into lockdown again after a mutation of COVID-19 started to spread rapidly throughout the country, sparking fears of an extension of the pandemic. Positively, scientists are confident that the vaccine will work for COVID mutations as well, but that’s not helping stocks this morning as concerns rise about wider/longer economic lockdowns.
On stimulus, Congress agreed to a $900 billion stimulus bill and a vote is expected today. However, this was already priced into stocks (that’s why it’s not causing a rally).
Today there are no economic reports and no Fed speakers, so focus will remain on stimulus and the coronavirus.
Regarding stimulus, the stimulus bill is expected to pass Congress today (so markets will expect that to happen). Regarding coronavirus, any headlines that imply this mutated coronavirus is spreading across the globe will cause further downside in stocks (because it could lead to greater/longer economic lockdowns, which has been the focus of the market throughout the pandemic).
What’s in Today’s Report:
Futures are little changed following a quiet night as markets digest the week’s rally.
Economic data beat estimates overnight, as UK Retail Sales fell less than expected (-3.8% vs. (E) -4.2%) while German Ifo Business Expectations also beat estimates (92.8 vs. 91.8).
Stimulus talks continued, and while a deal isn’t likely today (a mild disappointment), one is still expected in the next few days.
Today we get one notable economic report, Leading Indicators (E: 0.4%) and two Fed speakers, Evans (11:00 a.m. ET), Brainard (11:10 a.m. ET). But, none of that should move markets.
Instead, markets will be on “stimulus watch” and right now the expectation is for a $900 billion-ish stimulus deal to be approved in the next few days (definitely before Christmas). Anything that confirms that expectation will help stocks rally today, and anything that implies it might not happen will cause a stock decline. Finally, today is Quadruple Witching options expiration so expect some big volumes and potential volatility into the close.
Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report,” warned clients Tuesday that share prices are also at risk of falling if the Fed disappoints. U.S. stocks are poised to open higher after a four-day slump, index futures…Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher as markets digest a “more positive than it appeared” FOMC decision on Wednesday, along with growing expectations for a stimulus bill.
Regarding stimulus, expectations for the total size of the bill have grown from $700 billion-ish to $900 billion-ish, and passage is now expected before next week.
The Dollar Index dropped sharply and fell below 0.90 for the first time since ‘18, and that’s helping futures rally. The dollar decline is the result of the FOMC decision yesterday.
Stimulus headlines will dominate trading today as markets expect a deal in the next few days, and anything that further confirms that will be a tailwind on stocks.
Stimulus aside, though, there are also important economic reports today. The key number is Jobless Claims (E: 806K), followed by Philadelphia Fed Manufacturing Index (E: 21.2). Both numbers need to show stability and push back on the growing narrative that the economic recovery is losing momentum. We also get Housing Starts (E: 1.53M but that shouldn’t move markets.
Nancy Pelosi said last week that negotiations over a coronavirus stimulus package could run through the holiday period, but this is too late according to some analysts. “At this point, markets have priced in and are expecting stimulus near term, so if that…”, said analyst Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Stock futures are higher with global shares today as investors look ahead to the Fed following upbeat economic data o/n while a stimulus deal has still not been reached.
Economically, EU Flash Composite PMIs came in better than expected with the German Manufacturing and the French Services components both handily beating expectations, pointing to still healthy and resilient recovery.
Today, there are a few economic reports to watch in the U.S. session. In order of importance they are: Retail Sales (E: -0.3%), PMI Composite Flash (E: 57.4), Business Inventories (E: 0.6%), and Housing Market Index (E: 88.0).
After the morning data, focus will turn to the Fed with the FOMC Meeting Announcement at 2:00 p.m. ET, followed by Fed Chair Powell’s Press Conference at 2:30 p.m. ET.
With investors keenly watching the Fed for clues about the future or QE and ZIRP today, ongoing negotiations for a stimulus package on Capitol Hill will remain a key influence to watch as well, as a deal is largely priced in with the S&P trading just shy of record highs and any disappointment regarding the next round of coronavirus aid could result in a significant uptick in volatility.
Tom Essaye, the founder of the Sevens Report, was more cautious, however, commenting:
‘At this point, markets have priced in and are expecting stimulus near term, so if that really does not happen…’ Click here to read the full article.
“At this point, markets have priced in and are expecting stimulus near term, so if that really does not happen by the…” for risk assets, wrote Tom Essaye, founder of The Sevens Report. Click here to read the full article.
The bottom line is that the market does expect something more” from the central bank, analysts at Sevens Report Research wrote in Monday’s latest newsletter. That doesn’t mean more quantitative easing, but “it does mean some sort…” Click here to read the full article.
