Are Investors Too Complacent?
What’s in Today’s Report:
- Are Investors Too Complacent Right Now?
- Weekly Market Preview: Stimulus and an Important Fed Meeting
- Weekly Economic Cheat Sheet: Is the Recovery Slowing?
Futures are modestly higher following reports that the stimulus bill might be broken up into two parts (with the larger part passing before year-end).
Congress is going to try and pass two stimulus bills, the first a $750 billion-ish relief bill, and after that, a 200 billion-ish bill that deals with stickier issues of state funding and COVID liability. The market is rallying on this news because it increases the chances of near-term stimulus (although even if this happens, and it’s not a done deal, it’s already priced into stocks).
Economic data was sparse as EU Industrial Production was in-line with estimates at 2.1% vs. (E) 2.0%.
Today there are no economic reports and no Fed speakers so stimulus headlines will drive trading. The key will be Pelosi as she’s not been in favor of a two-part bill before, so her support (or not) will be critical to the chances of stimulus actually happening. Bottom line, if she’s for it, expect a further rally. If she’s not, expect stocks to turn negative on the news.