Why the Post Office Drama Matters to Markets

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What’s in Today’s Report:

  • Why the Post Office Drama Matters to Markets
  • Empire State Manufacturing Survey Takeaways

S&P 500 futures are slightly higher, trading within 10 points of their record high this morning after a mostly quiet night of news.

U.S.-China tensions remain elevated following the Commerce Department’s new tighter restrictions on Chinese telecom giant, Huawei Technologies, but for now the impact on the broad markets has been limited.

There were no notable economic reports overnight and no material developments regarding the next coronavirus relief bill.

Today is lining up to be another relatively slow day in the markets as there is only one economic report: Housing Starts (E: 1.240M) and there are no Fed officials scheduled to speak. The quiet calendar will leave investors largely focused on the status of the stimulus bill negotiations in Congress which remain in a stalemate.

Tom Essaye Quoted in Unseen Opportunity on August 13, 2020

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“The market still wants, and very much expects, an actual stimulus bill to be signed. Looking forward, stimulus bill negotiations will continue, but [President Trump’s] executive orders (combined with recently solid data) likely reduce…” wrote Sevens Report editor Tom Essaye. Click here to read the full article.

Tom Essaye Quoted in Benzinga on August 14, 2020

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Tech Bubble 2.0? Unfortunately, Sevens Report Research founder Tom Essaye said Friday there are at least five similarities between today’s market and the dot-com bubble:

  1. Essaye said the sideways trend in the yield curve in the past year closely resembles the yield curve’s behavior in the late 1990s prior to the bursting of the tech bubble…Click here to read the full article.

Tom Essaye Quoted in Forbes on August 13, 2020

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Investors are still expecting another stimulus package will eventually get passed: “The market still wants, and very much expects, an actual stimulus bill to be signed…” according to Tom Essaye, editor of the Sevens Report. Click here to read the full article.

Why Doesn’t the Market Care There’s No Stimulus?

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What’s in Today’s Report:

  • Why Doesn’t This Market Care That There’s No Stimulus?
  • Weekly Market Preview:  Watching Washington and the Data
  • Weekly Economic Cheat Sheet:  August Flash PMIs on Friday – Can the Data Hold Up?

Futures are marginally higher following some potentially positive headlines from Washington over the weekend.

Speaker Pelosi is calling the House back into session to address Postal Service funding (this was a major sticking point in the larger stimulus bill).  The hope is that if there’s a compromise on that issue, the larger stimulus bill becomes much easier to pass.

There was no notable economic data overnight.

Today’s focus will be on Washington and specifically if there’s any hint that negotiations may re-open on the larger stimulus bill.  If that’s the case, then we’ll likely see new all-time highs today in the S&P 500.

Economically, the Empire Manufacturing Index (E: 17.0) is the key report today, and the market will want to see continued progress from July (especially because the stimulus payments have stopped).  We also get the  Housing Market Index (E: 72), although that shouldn’t move markets.

Tom Essaye Quoted in FinTech Zoom on August 13, 2020

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“The market nonetheless needs, and really a lot expects, a precise stimulus invoice to be signed…” wrote Tom Essaye, editor of the Sevens Report. Click here to read the full article.

Tom Essaye Quoted in Barron’s on August 11, 2020

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”In a televised meeting, Russian President, Vladimir Putin, stated that Moscow’s Gamaleya Institute successfully developed a ‘safe and effective’…” writes The Sevens Reports Tom Essaye. Click here to read the full article.

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Tom Essaye Quoted in CNBC on August 12, 2020

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“The market still wants, and very much expects, an actual stimulus bill to be signed. Looking forward, stimulus bill negotiations will…” wrote Tom Essaye, editor of the Sevens Report. Click here to read the full article.

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Is Inflation Coming Back? (It Better Not Be)

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What’s in Today’s Report:

  • Is Inflation Coming Back?  (It Better Not Be)
  • An Inquiry on Gold

Futures are modestly lower following a night of disappointing economic data and more signs coronavirus is rebounding in Europe.

Chinese Industrial Production (4.8% vs. (E) 5.1%) and Retail Sales (-1.1% vs. (E) 0.3%) both missed estimates, while EU Flash GDP met very low estimates (-12.1%).

Britain added France to its list of quarantine countries, underscoring the steady rebound of coronavirus in Europe (although levels of the virus in Europe are still very low compared to the U.S.).

Today there are three notable economic reports:  Retail Sales (E: 1.8%), Industrial Production (E: 3.0%) and Consumer Sentiment (E: 71.9).  Consumer Sentiment is the most important number because it’s the most recent, although solid numbers in retail sales and IP will help reinforce the idea that economic recovery is still on-going (and hasn’t paused) and will help limit any downside in equities today.  There’s also one Fed speaker today, Kaplan at 10:00 a.m. ET, but he shouldn’t move markets.

The Vaccine Playbook

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What’s in Today’s Report:

  • The Vaccine Playbook

S&P 500 futures are approaching record highs this morning amid news that Russia has approved a COVID-19 vaccine while investors remain optimistic for a U.S. stimulus deal.

In a televised meeting, Russian President, Vladimir Putin, stated that Moscow’s Gamaleya Institute successfully developed a “safe and effective” coronavirus vaccine ready to move to a Phase 3 trial, sparking risk-on money flows.

Economically, both the German ZEW Survey and the NFIB Small Business Optimism Index largely met estimates and importantly did not alter the narrative that the broader global economic recovery remains underway.

Today, there is one economic report: PPI (E: 0.3%) and one Fed official is scheduled to speak: Daly (12:00 p.m. ET) but neither should move markets as investors will be keenly focused on the details surrounding the Russian coronavirus vaccine as well as any new progress towards a deal on the next U.S. stimulus bill.