Cyclicals/Value vs. Tech/Growth Positioning Update
What’s in Today’s Report:
- Cyclicals/Value vs. Tech/Growth Positioning Update
- EIA Analysis and Oil Update
- FOMC Minutes: Dovish, But We Still Expect Tapering Discussions in the Coming Weeks
Futures are modestly higher following some apparent progress in infrastructure negotiations.
President Biden signaled he is open to a 25% corporate tax (down from the desired 28%) and that reduction increases the chances infrastructure ultimately gets passed.
Economic data was solid as German Manufacturers’ Orders and the UK Construction PMI both beat estimates.
Today the focus will be on economic data, specifically Jobless Claims (E: 680K) and on Fed speak. Broadly, markets will look for Fed officials to confirm what the minutes showed, that despite recent strong economic data, the Fed isn’t considering tapering yet. Fed speakers today include, in order or importance, Powell (12:00 p.m. ET), Bullard (11:00 a.m. ET) and Kashkari (2:00 p.m. ET).
Bottom line, if we get a solid jobless claims number and dovish commentary from Powell, expect a continued grind higher in stocks.