Thursday August 20, 2020 Trading Desk: (312) 236-8907
TODAY’S GAME PLAN: from the trading desk, this is not research
DATA/HEADLINES: 8:30ET Weekly Jobless Claims, Philly Fed Index; 10:00ET Leading Indicators; 1:00ET Fed Daly speaks
Data from the Labor Department is expected to show the number of Americans seeking jobless benefits dipped to 925,000. . San Francisco Fed President Mary Daly discusses the future of work at 1:00ET.
- China and the U.S. have agreed to hold a call soon to discuss the progress of their trade deal
- Iran announces locally made ballistic and cruise missiles amid U.S. tensions
- TikTok’s Chinese owner is proposing to settle consumer privacy litigation
- New York’s positive-test rate fell to the lowest since the virus began
- Apple is set to overtake the value of the entire FTSE 100
Stocks dropped in much of the world after the Federal Reserve signaled continued concern over the pandemic weighing on the world’s biggest economy. Equities in several continents are seeing fresh weakness as investors debate whether recent momentum can be sustained amid lofty valuations and uncertainties over further stimulus to counter the pandemic. Risk-off sentiment was also fueled as coronavirus infections flared in Europe, with France and Spain reporting their biggest case increases in months. China and the U.S. have agreed to hold a call soon to discuss the progress of their trade deal, although an exact date was not announced.
U.S. index futures declined as equity markets in much of the world retreated after the Federal Reserve signaled a long and hard recovery for the world’s largest economy. The July FOMC minutes fell short of laying out a path for rate liftoff and also suggested yield control isn’t in the offing. The FOMC’s grim view on the recovery has made investors reluctant to push valuations out further after record highs seen earlier in the week. US Congressional leaders hinted they were looking for a path toward reviving stalled talks on the next round of pandemic relief — even as both sides remain far from a deal. Any accord is still likely to wait until September
E-Mini S&P is down 0.4%, Nasdaq -0.1%, Russell 2000 futures -0.75%, Dow futures -0.5%. SPX has 3355 as initial key support, with potential for some downside momentum below it. ES has been unable to put in a new all-time high, with SPX posting just a marginal new one.