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Stimulus Update (Why The Market Still Expects It to Pass)

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What’s in Today’s Report:

  • Stimulus Update (Why the Market Still Ultimately Expects It to Pass)
  • Economic Data – A Mixed Picture
  • EIA Analysis and Oil Market Update

Futures are marginally higher following a mostly quiet night, as the fate of the stimulus bill remains unresolved.

The stimulus bill remains up in the air as Trump has neither vetoed nor signed the bill, but while that could result in a temporary government shutdown on Monday, ultimately markets expect the bill to pass.

Regarding Brexit, the EU and UK are expected to formally announce a post Brexit trade deal later today, although as we and others have consistently said, this was always the expected outcome and as such it’s not generating much markets reaction.

There are no economic reports today and no Fed officials are scheduled to speak, so stimulus headlines will drive trading (anything that implies passage of the bill will be positive, while no news or negative news will obviously be a short term negative).

Finally, stock markets will close at 1:00 p.m. today.  Please have a safe and joyous holiday weekend.

Stimulus Update (Progress Is Being Made)

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What’s in Today’s Report:

  • Stimulus Update
  • Weekly EIA/Oil Market Update (Can the Rally Continue?)

Futures are modestly higher thanks to stronger than expected earnings and progress on the stimulus front.

TSLA earnings beat lofty expectations and the stock rallied after hours, while the rest of the major earnings reports (MSFT/CMG) were generally in-line (i.e. no disasters).

Republicans apparently reached a consensus on their version of next stimulus bill, so progress continues and a new stimulus bill is expected in the next few weeks.

Today the key number will be weekly jobless claims.  There are rising fears that the U.S. economy is plateauing after the recovery in May/June, and if weekly claims move back towards, or through 1.5M, that will likely spook markets and imply that the recovery is stalling.  Regarding earnings, the two reports we’re watching are T ($0.78), AAL (-$6.40), but earnings shouldn’t move markets toda