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The Reason Stocks Rallied Yesterday

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What’s in Today’s Report:

  • The Reason Stock Rallied Yesterday (Despite the Democrat’s Win and Chaos in the Capital)
  • EIA Analysis and Oil Market Update

Futures are modestly higher after Congress certified the Presidential election results late Wednesday night.

Following the chaos at the Capital yesterday, Congress certified Joe Biden’s election win and President Trump committed to an orderly transition.  That will help markets continue to look past the political and civil unrest related to the election, because none of it will ultimately change the outcome and Biden will be inaugurated on January 20th.

Economic data was mixed as EU Retail Sales collapsed (-6.1%) while German Manufacturers Orders beat estimates, but neither number is moving markets.

With the Presidential transition now largely settled, focus will turn back towards economic data and the two key reports today are Jobless Claims (E: 855K) and the ISM Services Index (E: 54.5).  Both are equally important, and markets will want to see continued improvement in claims and stability in the services PMI, as that would imply the economic recovery isn’t losing too much momentum in the face of still surging COVID cases.  Outside of economic data, we also have several Fed speakers including: Harker (9:00 a.m. ET), Bullard (12:00 p.m. ET), Evans (1:00 p.m. ET) and Daly (3:00 p.m. ET), but none of them should move markets.

Combatting FOMO (Fear of Missing Out)

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What’s in Today’s Report:

  • Why Stocks Rallied Yesterday (There Were Legitimate Reasons)
  • Combatting FOMO (Fear of Missing Out)
  • What Happens When Stimulus Checks Stop Coming?
  • EIA and Oil Market Update

Futures are modestly lower as markets digest Wednesday’s big rally, following a quiet night of news.

Germany finalized its stimulus plan, but it didn’t include an incentive program for traditional (non-electric) car purchases and that’s causing mild disappointment and European shares are lower as a result.

Economic data was again better than feared as Euro Zone Retail Sales dropped –11.7% vs. (E) -18.0%.

Today there are two key events that could move markets:

First, the ECB is expected to increase its QE program (called the PEP) by € 500 bln.  If that does not happen, markets will be disappointed because stimulus remains a key driver of this rally.

Next, weekly jobless claims (E: 1.790M) remain very important and we need to see both initial claims and continuing claims fall further this week, and if that does not happen markets will be disappointed, especially given the rally of the past 10 days.