What a Blue Wave Would Mean for Markets

/in , /by

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)

/in , /by

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`

/in , /by

“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.

Tom Essaye Quoted in Yahoo Finance on December 30, 2020

/in , /by

“Investors continue to weigh stimulus hopes against negative pandemic developments. Markets have aggressively priced in a lot of positive…” the note added.” Tom Essaye, “The Sevens Report” newsletter founder, said in a note. Click here to read the full article.

Tom Essaye in Bloomberg on December 30, 2020

/in , /by

“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 artile.

Tom Essaye Quoted in Investing.com on December 29, 2020

/in , /by

As Tom Essaye, founder of The Sevens Report said :

“The five pillars of the rally (Federal stimulus, FOMC stimulus, vaccine rollout, divided government and…” Click here to read the full article.

Tom Essaye Quoted in Explica December 29, 2020

/in , /by

“All the bluster did not change in a significant way to the perspective of the actions, since the markets were still waiting (and finally received) the stimulus…”, points Tom Essaye, founder of The Sevens Report, as collected CNBC. Click here to read the article.

Why 2021 Could Start With a Bang (In Stock and Bond Markets)

/in , /by

What’s in Today’s Report:

  • Why 2021 Could Start With a Bang (In Stock and Bond Markets)

Futures are slightly higher following a generally quiet night of news.

Economically, the only notable report was the Chinese December Manufacturing PMI, which declined from November but slightly beat estimates at 51.9 vs. (E) 51.5.

On the stimulus front, despite the recent drama of the last few days, the payouts to people in the stimulus bill will not be increased to $2000.  However, if Democrats win the Senate, expect this issue to come up again in early 2021.

Today focus will be on Jobless Claims (E: 830K) and markets will want to see continued improvement in that weekly data to imply the economic recovery has not lost meaningful momentum.  Outside of that and some year-end positioning, today should be a generally quiet day (although markets will get busy again starting next week).

Looming Market Catalysts

/in , /by

What’s in Today’s Report:

  • The Major Looming Market Catalysts

S&P futures are trading higher while international markets were mixed overnight as investors continue to weigh stimulus hopes against negative pandemic developments.

COVID-19 hospitalizations hit a record in the U.S. yesterday and Colorado reported the first domestic case of the rapidly spreading “U.K. strain,” however news that Britain approved AstraZeneca’s vaccine is helping offset that news.

Today, there are two economic reports to watch: International Trade in Goods (E: -$82.0B) and Pending Home Sales (E: 0.0%) while there are no Fed officials scheduled to speak.

That will leave markets largely focused on Capitol Hill once again as investors look for clarity on the size of individual stimulus checks which has been the most notable driver of equity markets this week.

Tom Essaye Quoted in Barron’s on December 29, 2020

/in , /by

Still, there exists some probability of a bear market. Factors that could send stocks south include the emergence of a vaccine-resistant, Covid-19 strain, or other bad news on the vaccine front, Tom Essaye, founder of Sevens Report Research, wrote in a Monday research note…Click here to read the full article.