Amid news of a successful Covid-19 vaccine, the S&P 500 making a run to the 3,900 level is possible, according to editor of the Sevens Report, Tom Essaye. “It is materially bullish for stocks in the near term…” Essaye told clients. Click here to read the full article.
What’s in Today’s Report:
Futures have exploded to new all-time highs on positive vaccine results from Pfizer, combined with election uncertainty.
Pfizer just released results stating its COVID-19 vaccine is more than 90% effective in preventing COVID-19 infection among people who had not been previously infected. That 90% is much higher than was expected.
Election clarity had stocks higher pre-vaccine news as Biden was projected to win the Presidency.
Today it’s all about momentum and as stocks should surge led by value, cyclicals and the “Get out and spend” sectors.
Stock investors may be in something of a “post-election fog” or a “drunken euphoria” about an apparent quick conclusion to the presidential race but may also be repricing expectations for economic growth, says Tom Essaye, director of Sevens Report Research. Click here to read the full article.
For now, though, all eyes are on Washington. “For the next several days reports of President Trump’s health will…” writes The Sevens Report’s Tom Essaye. Click here to read the full article.
What’s in Today’s Report:
Futures are moderately higher again following better than expected economic data overnight.
Chinese economic data was solid as August Retail Sales (0.5% vs. (E) 0.1%) and Industrial Production (5.6% vs. (E) 5.1%) both beat estimates. In Europe, the German ZEW expectations index also beat estimates (77.4 vs. (E) 69.5). Bottom line, the data implies the global economic recovery is still on going.
On the vaccine front, headlines were more mixed as the resumption of the AZN trial in the U.S. isn’t expected until the middle of this week, at the earliest. But, markets still very much expect a vaccine to be approved by Election Day and distributed by year-end (and that remains a very optimistic assumption).
Today the looming Fed meeting (tomorrow) should keep the markets generally quiet, although we do get the September Empire Manufacturing Survey (E: 6.5), which is the first data point for September. If it’s stronger than expected, that will further confirm the U.S. economy remains resilient despite no more stimulus, and that will help support the early rally in futures.
“Let me be clear: The only reason we do not have a stimulus bill passed yet is because the economy and the markets are performing…” said Tom Essaye, founder of The Sevens Report. Click here to read the full article.
Investors are still expecting another stimulus package will eventually get passed: “The market still wants, and very much expects, an actual stimulus bill to be signed…” according to Tom Essaye, editor of the Sevens Report. Click here to read the full article.
What’s in Today’s Report:
S&P 500 futures are approaching record highs this morning amid news that Russia has approved a COVID-19 vaccine while investors remain optimistic for a U.S. stimulus deal.
In a televised meeting, Russian President, Vladimir Putin, stated that Moscow’s Gamaleya Institute successfully developed a “safe and effective” coronavirus vaccine ready to move to a Phase 3 trial, sparking risk-on money flows.
Economically, both the German ZEW Survey and the NFIB Small Business Optimism Index largely met estimates and importantly did not alter the narrative that the broader global economic recovery remains underway.
Today, there is one economic report: PPI (E: 0.3%) and one Fed official is scheduled to speak: Daly (12:00 p.m. ET) but neither should move markets as investors will be keenly focused on the details surrounding the Russian coronavirus vaccine as well as any new progress towards a deal on the next U.S. stimulus bill.
What’s in Today’s Report:
Futures are little changed as markets look past President Trump’s executive orders on economic stimulus following an otherwise quiet weekend.
With stimulus talks again at an impasse, President Trump issued several executive orders over the weekend to provide economic stimulus, including $300/week in federal unemployment and a payroll tax deferral.
But, for a multitude of reasons (legal and otherwise) none of these actions will have any immediate economic impact, so the market still expects a stimulus bill to be passed (but now in the coming weeks, not immediately).
Today there’s one labor market number, JOLTS (E: 5.288M), but that shouldn’t move markets, and instead focus will be on stimulus. Today, the key is that both the Democrats and Republicans signal they are going to continue negotiations on the stimulus bill. If the rhetoric implies the talks have stalled completely, that that will likely pressure stocks.
“The bottom line is that if we do see real disappointment in stimulus or the vaccine, then a 10% correction is the likely best-case scenario, and it’ll come…” said Tom Essaye of The Sevens Report, in a note. Click here to read the full article.
