Dollar Outlook (This Matters to Stocks)

What’s in Today’s Report:

  • Dollar Outlook (This Matters to Stocks)

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.