Friday August 14, 2020 Trading Desk: (312) 236-8907
TODAY’S GAME PLAN: from the trading desk, this is not research
DATA/HEADLINES: 8:30ET Retail Sales, Productivity and Labor Costs; 9:45ET Capacity Utilization; 10:00ET Consumer Sentiment, Fed’s Kaplan speaks at virtual event
Retail sales data is expected to show a slowdown in the consumer recovery with a 2.1% expansion, versus 7.5% in June and 18.2% in May.
- Israel and the United Arab Emirates forged a pact to begin normalizing relations
- Trump said he wouldn’t veto a stimulus bill that contains funding for the Postal Service
- Schumer is backing a bipartisan bill that would create a $120 billion fund for restaurants
- Joe Biden said U.S. governors should require masks for at least the next three months
Global markets were sluggish as China’s retail sales showed a surprise drop in July and amid renewed virus jitters. Germany recorded the highest number of new cases in more than three months, as infections also rose in France, Greece and Spain. The euro area reported its steepest drop in employment on record in the second quarter, another sign of the enormous damage the coronavirus has done to the economy. China’s July retail sales unexpectedly fell and factory output missed estimates, dampening investor sentiment globally. Investors are awaiting a meeting between top U.S. and Chinese trade officials on Saturday to review the first six months of their Phase 1 trade deal.
Futures on the main U.S. equity benchmarks slipped ahead of retail sales data for July which will offer clues about the health of the consumer recovery. Traders continue to bank on further fiscal stimulus to help the developing recovery, after U.S. and Asian stocks erased most of their pandemic-related losses. The S&P 500 failed once again to reach its record high from February.
E-Mini S&P is down 0.1%, Nasdaq +0.2%, Russell 2000 futures -0.55%, Dow futures -0.3%. SPX held the .382 retracement of the week yesterday around 3364. 3350 is the .618 and we would look for some pressure below this level if we get it.