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Is the S&P 500 “The Market” Anymore?

What’s in Today’s Report:

  • Is the S&P 500 “The Market” Anymore?

Stock futures are trading at record highs this morning amid renewed stimulus hopes and soft economic data overseas.

Late yesterday, Treasury Secretary Mnuchin urged Congress to pass new stimulus funding and expressed willingness to sit down with Congressional Democrats to work towards a deal.

German Retail Sales were -0.9% vs. (E) +0.5% in July bolstering the case that more stimulus is needed globally.

Today, we will get an initial look at labor market data for the month of August via the ADP Employment Report (E: 850K) which could move markets if there is a material surprise (either way) in the headline. Data on Factory Orders for July (E: 5.8%) will also be released this morning.

There are multiple Fed speakers today including: Williams (10:00 a.m. ET), Mester (12:00 p.m. ET), Kashkari (3:00 p.m. ET), and Daly (6:00 p.m. ET), from which the market will look for additional signals that the FOMC will remain very accommodative for the foreseeable future.

Finally, the next stimulus package has jumped back into the forefront of the market’s focus so any developments regarding progress towards a deal will be well-received by risk assets including stocks while concerns of an ongoing stalemate will be a headwind.

What Outperforms If Stocks Trade With a 20X Multiple?

What’s in Today’s Report:

  • What Outperforms If Stocks Trade With a 20X Multiple?

Global equity markets are rallying as the spread of the coronavirus continues to slow while statistics show that Sanders victory in the New Hampshire primary increases the odds of a “market-friendly” Trump reelection in 2020.

Eurozone Industrial Production was soft in December with the headline falling -2.1% vs. (E) -1.8% but optimism for a 2020 economic rebound is offsetting the poor data point.

There are no notable economic reports today however there are two Fed speakers ahead of the bell: Harker (8:30 a.m. ET) and Daly ( 9:00 a.m. ET), while Powell will testify before Congress for a second day (10:00 a.m. ET).

Outside of the Fed speakers today, the Treasury will hold a 10-Yr Note auction at 1:00 p.m. ET and as has been the case recently, any sizeable moves in the bond market, especially that impact the yield curve, could influence stock trading in the afternoon.