What a Blue Wave Would Mean for Markets
What’s in Today’s Report:
- What a Democrat-Controlled Senate Would Mean for Markets (Three Risks to Watch)
- PMI Manufacturing Index Takeaways
Stock futures are modestly higher in cautious trade this morning as investors are largely focused on the Senate runoffs in Georgia today while mostly negative COVID-19 developments continue to weigh on sentiment.
Economically, German data was, on balance, positive o/n, as the unemployment rate held steady at 6.1% as expected while Retail Sales jumped 1.9% vs. (E) -2.0%.
Looking at today’s calendar, there are two domestic economic data points to watch this morning: ISM Manufacturing Index (E: 56.5) and Motor Vehicle Sales (E: 15.7M), and two Fed officials are scheduled to speak in the afternoon: Evans (3:45 p.m. ET) and Williams (3:45 p.m. ET).
But, the markets will remain most interested in the Georgia Senate runoffs today as the threat of a “Blue Wave” outcome would mean potentially higher taxes and more regulation which would largely offset hopes for more, massive stimulus measures.
COVID-19 has also had an impact on markets so far this week as new lockdowns in the U.K. and the discovery of the faster spreading strain of the coronavirus in upstate New York have weighed on sentiment and threaten to become increasing market headwinds in early 2021.