Updated Market Outlook (Near Term Pain for Long Term Gain)
What’s in Today’s Report:
- Updated Market Outlook: Near Term Pain for Long Term Gain?
- Weekly Market Preview: Economic Data and More Vaccine Optimism (MRNA)
- Weekly Economic Cheat Sheet: November Data Key This Week (Empire/Philly/Jobless Claims)
Futures are moderately higher despite a continued surge in COVID cases and more partial lockdowns, as markets look beyond the short term and focus on vaccine optimism.
The weekend brought more partial lockdowns in Michigan and Washington, but that was countered by Dr. Fauchi saying he thought the U.S. could be back to normal by April given the current and future vaccines. That positive vaccine outlook is insulating the market, so far, from the negatives of surging COVID cases and lack of fiscal stimulus.
Chinese economic data was solid as Industrial Production and Retail Sales both beat estimates and generally the Chinese economy continues to recover (which is positive for emerging markets specifically).
For today (and all week), markets will be on “Moderna Watch” as MRNA could release vaccine results any minute, and positive Phase 3 results will obviously be an additional tailwind on stocks.
Economically, the key number today is the Empire State Manufacturing Index (E: 13.5). This is the first datapoint from November, so markets will want to see stability, especially in the face of growing partial lockdowns. Finally, there are two Fed speakers, Daly (1:45 p.m. ET) and Clarida (2:00 p.m. ET), but neither should move markets.