TODAY’S GAME PLAN: from
the trading desk, this is not research
8:30ET Jobless Claims, Housing Starts, Philly Fed Manufacturing Index; 1:00ET 10-year TIPS $12b reopening
This morning’s initial jobless claims data is expected to show little improvement from the previous 884,000 total.
- Trump urged the GOP to “Go for the much higher numbers” in new coronavirus stimulus
- BoE Will Engage With Regulators On How To Implement Negative Rates
- Tesla Co-Founder Wins Amazon Funding For Electric Battery Project – FT
- MEADOWS is meeting airline CEOs today to talk about planned industry
- Euro zone banks get 73 billion euro ECB relief to withstand pandemic
Global stocks faded on Thursday after Federal Reserve Chair Jerome Powell’s downbeat assessment of the economic outlook hurt appetite for riskier
assets. The Federal Reserve kept interest rates at zero and signaled they would stay there for at least three years, though the central bank didn’t meet some analysts’ expectations for further stimulus measures. The Bank of England said today it was keeping
its benchmark interest rate at 0.1% and it left unchanged the size of its bond-buying program at 745 billion pounds ($966 billion).
EQUITIES: S&P and Russell rebalance tomorrow
US stock futures fell as investors braced for data likely to show persistently high levels of weekly jobless claims, adding to concerns about
an economic rebound a day after the Federal Reserve issued an underwhelming stimulus plan. Index futures futures pared some of their earlier drop, though remained weak in a signal that the underlying US stocks will extend their losses from Wednesday after
Powell highlighted uncertainty over the speed of the economic recovery. The Fed extended its ‘dot plot’ forecast of unchanged U.S. interest rates out to end-2023 and upgrading growth forecasts so that GDP is now seen reaching pre-pandemic levels next year
rather than in 2022. Technology stocks led the decline with Apple and Tesla falling 1.1% and 2.5% respectively in premarket trading.
December E-mini S&P futures -1.4%,
Nasdaq -2%, Russell 2000 futures -1.3%, Dow futures -1%. ES broke the 50dma
overnight before paring losses. A settle below the 50 day in SPX (3335) would likely signal continued downside momentum with the
the next big key.
After an 84% gain off the March lows we finally see a pullback in QQQ. Remains short term negative with settles below 281.63 and a settle below
could see further downside momentum shift going into the election… AMZN is down 2.2% in pre-market trade and remains negative short term below its
Small caps outperforming this week as IWM gets a bounce from the 200 day moving average
European stocks fell, ending their longest winning streak in a month, after Federal Reserve Chair Jerome Powell highlighted uncertainty about
the path of economic recovery. The Stoxx Europe 600 Index suffered declines across almost all industry groups, before clawing back half of the early losses ahead of the Bank of England’s rate decision where they left rates unchanged. Tech stocks slid as much
as 2% before paring some losses. The DAX is falling 0.5% with Adidas AG having the largest drop, falling 1.7%. CAC -0.95%, Stoxx 600 -0.9%, Banks -2.2%, Basic Resources -2%, Retail sector -0.5%
All markets in the region were down, with Hong Kong’s Hang Seng Index dropping 1.6% and Australia’s ASX 200 falling 1.2%. Hong Kong shares ended
lower, tracking weakness in other Asian markets, after the US Federal Reserve pledged to keep interest rate low but stopped short of offering fresh stimulus to boost the world’s largest economy. The Bank of Japan held interest rate and asset purchase policy
unchanged, while upgrading its domestic growth forecast. The Nikkei slipped 0.67%. The central banks of Indonesia and Taiwan also held rates unchanged. The Shanghai Composite Index retreated 0.4% with healthcare and consumer firms leading the losses amid sell-off
pressure after a wave of new listings, while weakness in hog-farming companies dragged agricultural stocks lower.
Treasuries have bull-flattened amid global equity market declines. Yields lower by 0.5bp to 4bp across the curve with long-end-led gains flattening
2s10s, 5s30s by ~1.5bp each. Wednesday saw Treasury curve steepen and spreads tighten after the FOMC decision as asset purchase duration extension positions were unwound. There is a 10-year TIPS $12b reopening at 1pm.
Gold slipped as much as 1%, disappointed by the lack of outlook or guidance from the US Federal Reserve on what to do to spur inflation. Early
dollar strength also weighed on gold and silver. Other precious metals also declined, with platinum leading the fall after a six-day rally. Car sales in Europe, a key consumer of the metal, dropped in August, suggesting the auto market in the region could
remain depressed through the year-end. China’s gold demand shows signs of recovering, with bullion shipments from Switzerland reaching 10 tons in August after five months of no reported exports, according to Swiss customs data.
Oil prices are steady as US producers in the Gulf of Mexico prepared to resume output following Hurricane Sally. Some parts of the coast were
inundated with more than two feet of rain, as the slow-moving storm flooded communities. An OPEC+ technical panel warned that a rise in coronavirus cases in some countries may curb oil demand despite signs of economic recovery and initial indications of a
decline in oil stocks.
In Nov Brent we are using the vwap from the April low as a closing pivot pt (resistance).
The US dollar erased early overnight gains as markets digested the US central bank’s policy statement. The dollar index rebounded across the
board in late Asian trade, posting its biggest daily rise in more than a week as dealers unwound short positions taken ahead of the Fed decision. The pound plunged after the Bank of England said that it will engage with regulators to implement negative rates.
Colors within the report:
is always the 200 period (day, week). Red is always 21,
Blue = 50,
100 *Stars have added importance
Equity movers in early trading, as of 7:35am ET:
- SRNE +26.9% (+$2.25); Sorrento Soars After FDA Nod for Phase 1 Covid Antibody Trial
- RIGL +16% (+$0.40)
- MLHR +13.4% (+$3.47); Herman Miller First Quarter Adjusted EPS Beats Highest Estimate
- IBIO +8.8% (+$0.19)
- SBE +7.5% (+$1)
- VXRT +7% (+$0.52)
- ALT +6.9% (+$0.96)
- RVP +6.9% (+$0.42)
- KODK +6.3% (+$0.54)
- APOG +4.9% (+$1.02); Apogee Enterprises 2Q Net Sales Beat Highest Est.
- ZI +4.4% (+$1.37); ZoomInfo Raised at JPMorgan on Valuation After Pullback
- MT +4.1% (+$0.53)
- CCXX +3% (+$0.34)
- BNTX +2.8% (+$1.88); BioNTech Buys German Factory to Boost Covid Vaccine Capacity
- NCLH -2% (-$0.35)
- DOCU -2% (-$4.01)
- GME -2.1% (-$0.18)
- LPSN -2.1% (-$0.99)
- WKHS -2.1% (-$0.57); Workhorse Group’s Furey Sells $1.19 Million of Shares
- FMCI -2.2% (-$0.55)
- AU -2.2% (-$0.64)
- BHP -2.2% (-$1.23)
- JD -2.2% (-$1.67);
- SBBP -16.1% (-$0.45); Strongbridge Biopharma Offering Prices 11.1m Shrs at $2.25/Shr
- NCNA -15.5% (-$0.88); NuCana Offering Prices 15.6m ADR at $4.50/ADR
- PLAY -12.5% (-$2.38)
- RRGB -8.6% (-$1.27)
- ETNB -6.5% (-$1.89); 89bio Prices Upsized Offering of Stock
- INO -6.4% (-$1.18)
- FSLR -5.9% (-$4.26); First Solar Offering by Holder Prices 8.65m Shares at $69/Share
- FROG -5.8% (-$3.79); Historic IPO Pop Highlights Debut by Software Duo: ECM Watch
- CHWY -5.2% (-$2.94); Chewy to Offer $275m Shares via Morgan Stanley
- Chewy to Offer Shares Said at $55-56/Share
- NNOX -4.9% (-$1.80)
- SNOW -4.8% (-$12.2); Snowflake Soars Into Tech Big Leagues With $70 Billion Value
- BEKE -4.4% (-$2.69)
- GSX -4% (-$4.17)
Cabrera Capital Markets, LLC