Wednesday August 19, 2020 Trading Desk: (312) 236-8907
TODAY’S GAME PLAN: from the trading desk, this is not research
DATA/HEADLINES: 8:30ET Canada July CPI; 1:00ET U.S. to sell $25 billion 20-year bonds; 2:00ET Fed Minutes; 3:00ET Fed’s Barkin speaks / OPEC+ ministers meet online
The White House sees a chance Republicans and Democrats can agree on a smaller stimulus of $500 billion that would omit key areas of disagreement. They may accept USPS funding, aid to schools and more money for businesses but are far apart on stimulus checks and help for local governments. Nancy Pelosi is willing to drop her proposal to $2 trillion and hinted at a further compromise.
- California escaped another bout of blackouts but faces a new crisis: dry lightning and extreme heat that ignited 155 fires in 24 hours and risk setting off more.
- Ocasio-Cortez formally nominates Sanders, then endorses Biden
- The State Department is asking colleges and universities to divest from Chinese holdings in their endowments to get ahead of a “wholesale de-listing” from U.S. exchanges on tighter standards
- China’s military said the latest U.S. navy sailing near Chinese-claimed Taiwan was “extremely dangerous”
Investors searching for fresh catalysts to risk assets are keeping watch on U.S. fiscal stimulus talks while preparing for the Fed minutes. While stock markets are at records, governments continue to sound the alarm over the course of the pandemic. Ireland is tightening restrictions on gatherings and New Zealand is increasing the military presence at its border as it battles a new outbreak. Germany’s Chancellor Angela Merkel ruled out any further loosening of virus measures. Global virus cases topped 22 million, with the U.S., Brazil and India accounting for more than half the total.
EQUITIES: Retail earnings are in focus again / Earnings include ADI, LB, NVDA, TJX, TGT, PGR, LOW
U.S. futures nudged up from yesterday’s record and before today’s FOMC minutes. In a positive signal for equities, House Speaker Pelosi suggested that Democrats might be willing to make more cuts to their stimulus proposal to seal a deal with Republicans and speed Covid-19 relief, then come back after the November elections with additional agenda items. hey may accept USPS funding, aid to schools and more money for businesses but are far apart on stimulus checks and help for local governments. Retail earnings are in focus again. Target reported second-quarter sales that trounced analysts’ expectations as comparable sales rose 24% in the last three months, the fastest pace in the retailer’s 58-year history.
E-Mini S&P is up 0.1%, Nasdaq -0.1%, Russell 2000 futures -0.15%, Dow futures +0.1%. E-Mini S&P failed to reach a new high and SPY put in only a 2 cent new high yesterday, while SPX reached a marginal new all-time high.