Election Preview Part II
What’s in Today’s Report:
- Stimulus Update
- Election Preview Part II (What’s the Probability of a Contested Election?)
Futures are lower amid rising concerns that the outcome of the presidential election may be contested following last night’s debate while there has been little to no progress on fiscal stimulus (at home or abroad) in the face of quickly rising new COVID-19 cases.
Economically, China’s official Manufacturing PMI rose to 51.5 vs. (E) 51.2 in September thanks to strong export orders which helped ease concerns about the health of the global economic recovery.
Looking to today’s calendar, we will receive our first look at September labor market data via the ADP Employment Report (E: 650K) as well as Final Q2 GDP (E: -31.7%), both ahead of the open while the Pending Home Sales report (E: 3.1%) will be released shortly after the bell.
Additionally, there are three Fed speakers today: Kashkari (9:30 a.m. ET), Bowman (1:40 p.m. ET), and Kaplan (6:00 p.m. ET) and the market expects all of them to maintain a very dovish tone.
Bottom line, investors will remain focused on two main factors today: 1) Will speaker Pelosi and Treasury Secretary Mnuchin pull off a last minute stimulus deal before the election (not expected)? And 2) what are the chances the presidential election is contested (the higher the chances the more negative for markets)?