Daily news and analysis

Wyllian Capucci

MentorTrader Professional

“I put aside years of success as a civil engineer to really build my capital without depending on the government or any company for that. My success came after I learned to read what the big banks are doing in the market and started to join them.”

21 de janeiro de 2021

21/01/2021 – What do you need to know for today?

Biden’s new pandemic approach, past due data and ECB decision day

Busy start

President-elect Joe Biden will begin his term today with at least 15 executive actions that will reverse some of President Donald Trump’s key policies. The United States will again join the Paris climate agreement and the World Health Organization, and will stop building the wall on the Mexican border. Biden will also end the travel ban against some predominantly Muslim countries and revoke the license for the Keystone XL pipeline. It will also present measures to reduce inequality and ease the burden of student debt. The opening, under strong security, will see Biden take the oath of office at noon today.

Claims

The pandemic that has seen more than 400,000 American deaths means that the Biden government will have only a brief honeymoon period. There will be another check on the damage being done to the economy at 10:30 am Eastern time this morning, when the latest unemployment benefit claim data is released. The number of people signing up for benefits is expected to remain high after last week’s surprising jump to close to 1 million. Continued claims could reach 5.3 million.

Earnings

Netflix Inc. skyrocketed more than 13% in the pre-market after the company announced that it had added more subscribers than expected and would no longer need to borrow money to build its entertainment empire. The technology sector also received a boost this morning with the reported results from chip maker ASML Holding NV. Morgan Stanley concludes what has been a season of big profits for the biggest banks on Wall Street when it announces before opening today.

Decision day

The European Central Bank is not expected to announce any changes to its ultra-long term policies when the last decision is announced at 9:45 am. President Christine Lagarde will face questions about the bank’s response to the pandemic at a press conference at 10:30 am. , while a series of new measures take action to stem the spread of the virus. German Chancellor Angela Merkel will give a press conference later, with the death toll rising to 50,000. Today, central banks in Japan, Norway and Turkey keep rates unchanged.

Markets rise

Global equities continue to move in one direction today, with the MSCI World Index hitting an intraday high earlier. Overnight, the MSCI Asia Pacific index added 0.8%, while Japan’s Topix index closed 0.6% above. In Europe, the Stoxx 600 Index gained 0.5% at 7:50 am, while investors were waiting for the last ECB decision. The S&P 500 futures pointed to a slight increase in openness, the 10-year Treasury yield was at 1.089%, oil fell and gold remained virtually unchanged.

Arriving

Initial US housing data for December is published at 10:30 am, with the Philadelphia Fed’s latest business forecast also at that time. The technology sector, which grew with earnings from Netflix Inc., will undergo another test today, when Intel Corp. and International Business Machines Corp. PPG Industries Inc., Baker Hughes Co. and Northern Trust Corp. are among the many other companies that have announced results.

20 de janeiro de 2021

20/01/2021 – What do you need to know for today?

Biden gets straight to the point, Republicans back off on stimulus and another big day for gains.

Unroll

President-elect Joe Biden will begin his term today with at least 15 executive actions that will reverse some of President Donald Trump’s key policies. The United States will again join the Paris climate agreement and the World Health Organization, and will stop building the wall on the Mexican border. Biden will also end the travel ban against some predominantly Muslim countries and revoke the license for the Keystone XL pipeline. It will also present measures to reduce inequality and ease the burden of student debt. The opening, under strong security, will see Biden take the oath of office at noon today.

Stimulus

While policy changes under Biden are certainly a change in tone towards the White House, investors are likely to be more concerned in the short term with the progress of a new stimulus package to help the economy still under pressure from the pandemic. Janet Yellen encountered Republican resistance to the $ 1.9 trillion relief plan during her confirmation hearing in the Senate yesterday. The Biden government will need 10 Republican senators to vote in favor of the package if it is to be quickly approved.

Earnings

Netflix Inc. skyrocketed more than 13% in the pre-market after the company announced that it had added more subscribers than expected and would no longer need to borrow money to build its entertainment empire. The technology sector also received a boost this morning with the reported results from chip maker ASML Holding NV. Morgan Stanley concludes what has been a season of big profits for the biggest banks on Wall Street when it announces before opening today.

Markets rise

While it is certainly a big day on the political front, global actions are relatively calm. Overnight, the MSCI Asia Pacific index rose 0.6%, while Japan’s Topix index fell 0.3%. In Europe, the Stoxx 600 Index was 0.6% higher at 7:50 am GMT, with luxury goods manufacturers seeing an increase with positive sales figures in China. The S&P 500 futures pointed to an opening gain, the 10-year Treasury yield was at 1.104%, oil was at $ 53.50 a barrel and gold was rising.

Arriving

Canada’s CPI reading in December will be at 10:30 am, followed by the BoC’s interest decision at 12pm, where Governor Tiff Macklem is expected to keep the policy unchanged. In addition to the inauguration of Joe Biden, Washington will also see the inauguration of the Democratic senators who won the runoff elections in Georgia. Procter & Gamble Co. and Kinder Morgan Inc. report profits.

19 de janeiro de 2021

19/01/2021 – What do you need to know for today?

Yellen’s pitch, Trump’s last day and another hectic day for earnings.

Tax chops

Former Fed Chairman Janet Yellen sets his new fiscal ceiling for the first time today, as she faces the Senate Finance Committee for its confirmation hearing as Treasury Secretary. Although Yellen is likely to be a “known quantity” for many senators, his role today will be to help sell President-elect Joe Biden’s $ 1.9 trillion stimulus plan. While many of the measures it contains can be passed with the minimum majority possible in the Senate, Biden’s preferred route is to obtain sufficient bipartisan support for the package to achieve the absolute majority of 60 votes required for rapid approval.

Hours left

President Donald Trump will leave Washington tomorrow morning, before Joe Biden takes office, to begin his life as a former president at his resort in Mar-a-Lago, Florida. While much is written about his legacy as a leader of the United States, what matters to the markets will be how many of his policies will survive the first weeks of the new government. Biden has already promised to re-join the Paris Agreement on global warming, close the Keystone XL pipeline and push for greater adoption of green technology. Spending on the border wall will stop, taxes will increase for those who earn more and for corporations, and it seems that the regulation of Wall Street will become more difficult.

Large banks

Speaking of Wall Street, the earnings season for big banks continues today, with Bank of America Corp. and Goldman Sachs Group Inc. reporting before the opening. Last week’s results from JPMorgan Chase & Co. have contributed in some way to tempering investor optimism about the sector, with the likelihood of further scrutiny under the Biden management possibly also weighing on any profit surprises today. State Street Corp. and Charles Schwab Corp. also report today.

Markets rise

American investors lost little during yesterday’s holiday, as news of strong economic data from China was met with a mixed reaction amid reports of new American measures against Chinese technology companies. Overnight, the MSCI Asia Pacific index added 1.2%, while Japan’s Topix index closed 0.6% above. In Europe, the Stoxx 600 Index gained 0.1% at 7:50 am Brasília time, before a crucial vote in the Italian parliament that will decide the fate of Prime Minister Giuseppe Conte’s government. The S&P 500 futures pointed to a lot of green at the opening, the 10-year Treasury yield was at 1,118%, oil was above $ 52 a barrel and gold won.

Arriving

Janet Yellen’s testimony in the Senate starts at 10 am. The US ICT flow data for November is published at 4pm. For oil investors, who already have the IEA’s demand alert this morning ringing in their ears, the Atlantic Council’s Global Energy Forum begins. Although Wall Street’s gains dominate the initial run, after the close Netflix Inc. will report. Investors will be looking at how the company, which has long dominated online video streaming, is doing well against a host of new competitors.

15 de janeiro de 2021

15/01/2021 – What do you need to know for today?

In Biden’s grand plan, Powell kills the candle and another dark landmark from Covid.

Fiscal stimulus

President-elect Joe Biden’s $ 1.9 trillion economic aid package includes proposals that are likely to be contested by many Republicans, which could lead to protracted negotiations before a deal is reached. While many of the elements of the plan can be approved by the Senate with a simple 50-50 party split, some, like state aid and health money, will likely need 60 votes in the House. The timing of President Donald Trump’s impeachment trial could add another obstacle to a swift deal on new stimuli. House Speaker Nancy Pelosi, at her weekly news conference later today, is expected to issue some guidance on when she plans to move the impeachment article to the Senate.

Monetary Stimulus

President-elect Joe Biden’s $ 1.9 trillion economic aid package includes proposals that are likely to be contested by many Republicans, which could lead to protracted negotiations before a deal is reached. While many of the elements of the plan can be approved by the Senate with a simple 50-50 party split, some, like state aid and health money, will likely need 60 votes in the House. The timing of President Donald Trump’s impeachment trial could add another obstacle to a swift deal on new stimuli. House Speaker Nancy Pelosi, at her weekly news conference later today, is expected to issue some guidance on when she plans to move the impeachment article to the Senate.

Two million

The global number of deaths caused by the coronavirus pandemic is about to reach 2 million, with little expectation that the rate of fatalities will decrease soon. Deaths in the United States are likely to reach 400,000 before the end of the month, as Joe Biden promises to speed up the vaccination effort he called “total failure”. In Germany, Angela Merkel is pushing to tighten the country’s block even further, as deaths in the country have increased by a record number in the past 24 hours. Clusters of the virus that have recently emerged in China are growing, with cases now in at least nine provinces.

Market slip

Investor reaction to Biden’s stimulus plan and Powell’s guarantee of the policy has been silenced so far, with equites registering declines. Overnight, the MSCI Asia Pacific index fell 0.5%, while Japan’s Topix index closed down 0.9%. In Europe, the Stoxx 600 Index was 0.5% lower at 5:50 am Eastern Time, with energy stocks under pressure. S & P 500 pointed to a small drop in the opening, the 10-year farm yield was at 1,114%, oil was lower and gold acquired.

Arriving

US data for December retail sales, PPI and January Empire Manufacturing are at 8:30 am industrial and industrial production for December is at 9:15 am and the latest University of Michigan sentiment figures are at 10:00 am It’s a big day profits for Wall Rua with JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., all reporting results.

14 de janeiro de 2021

13/01/2021 – What do you need to know for today?

The impeachment goes to the Senate, Biden will reveal the stimulus plan and due claim data.

Attempts

Senate majority leader Mitch McConnell will not allow President Donald Trump’s impeachment trial to begin before Joe Biden takes office on January 20. There are several complications after that date, with Democrats likely eager to start work on the new administration, although there is little to further indicate that Trump would actually be condemned. The president released a statement and a video yesterday in which he again seeks to distance himself from last week’s events and calls for an end to violent protests.

Stimulus

President-elect Joe Biden will present a Covid-19 stimulus package that could reach $ 2 trillion tonight. The plan will include direct payments of $ 2,000, extending unemployment benefits, money to the state and local government and tax credits, according to Congressional officials. Although Biden said he is seeking the support of Republican lawmakers to approve the package, Democratic control of all three branches of the legislature means that he does not require his plans to be approved.

Unemployment Insurance Claims

Economists expect initial claims for unemployment benefits to remain high when the data are released at 10:30 am Brasília time this morning. Nearly 800,000 new applicants registered last week, according to the median estimate of economists surveyed by Bloomberg, with Covid’s continued restrictions meaning that there are few signs of improvement in the near future. Fed Chairman Jerome Powell’s speech later and the readings on the economy will be closely watched when the bond market starts to think about reducing the Fed’s volume.

Markets rise

The expectation that Biden’s stimulus package will come close to $ 2 trillion is helping to lift global equities. Overnight, the MSCI Asia Pacific index added 0.3%, while Japan’s Topix index closed up 0.5%. In Europe, the Stoxx 600 Index was 0.3% higher at 7:50 am with automakers among the best performers. The S&P 500 futures pointed to a slight increase in the opening, the 10-year Treasury yield was at 1.11%, oil rose and gold fell.

Arriving

In addition to unemployment insurance data, US import and export price figures for December are released at 10:30 am. Atlanta Fed Chairman Raphael Bostic, Dallas Fed Chairman Robert Kaplan and Boston Fed Chairman Eric Rosengren join Powell on today’s list of monetary speakers. Blackrock Inc. and Delta Air Lines Inc. are among the companies that report profits.

13 de janeiro de 2021

13/01/2021 – What do you need to know for today?

Impeachment vote, talk of reduction and financial crisis alert.

The House

The House will begin debating the impeachment of President Donald Trump for the second time shortly after 11 am Eastern Time, with a vote likely to end by 7 pm. While Trump is almost certain to become the first president of the United States to face two charges, it is still unclear what happens to the Senate, with a very unlikely conviction before President-elect Joe Biden took office. The president continues to show no remorse for last week’s events, saying yesterday that his comments to his supporters were “entirely appropriate”.

Taper

Some Federal Reserve officials said they see the possibility of a strong economic recovery, driven by more fiscal support and vaccination numbers, which would set the stage for a discussion about reducing bond purchases before the end of the year. While others, such as St. Louis Fed President James Bullard, suggested that a “wait and see” approach was more prudent, the specter of a repeat of the 2013 rage means that investors are likely to be vigilant as they go. that yields continue to rise. There is less uncertainty in the euro area, with European Central Bank President Christine Lagarde saying this morning that continued monetary and fiscal support will be needed for the region’s economy.

Inflation

Speaking of the bond market, today’s inflation data is unlikely to do much to change the dial, with the headline number rising to 1.3% in December. The core reading is expected to remain at 1.6%, with data published at 10:30 am. World Bank Chief Economist Carmen Reinhart warned anyone looking for a quick recovery, saying the pandemic could overload the balance sheets, triggering a financial crisis. Governments around the world are introducing even more restrictions to slow the spread of the virus. The US saw Covid-19 fatalities rise to a record 4,610 yesterday.

Calm markets

There is little movement in global equities again this morning, while the outlook for the next round of U.S. stimulus will become clearer after the end of Trump’s presidency. Overnight, the MSCI Asia Pacific index added 0.5%, while Japan’s Topix index closed up 0.3%. In Europe, the Stoxx 600 Index changed little at 7:50 am. The S&P 500 futures pointed to a slightly lower opening, the 10-year Treasury yield was at 1.12%, oil rose and gold was stable.

Arriving

Investors seeking guidance on Fed policy have no less than five speakers today, and we look forward to the publication of the Beige Book at 2pm. The EIA updates U.S. oil inventory numbers at 12:30 pm and the December budget statement is at 4pm. CES continues and IHS Markit Ltd. reports earnings.

January 12, 2021

12/01/2021 – What do you need to know for today?

Democrats are impeaching, more companies are distancing themselves from the president and the Treasury bond market is getting interesting.

Demands

The House is expected to demand that Vice President Mike Pence invoke constitutional authority to oust President Donald Trump, a move that is likely to produce little results after the two agreed yesterday to work together until the end of their term. House Speaker Nancy Pelosi will vote on a single impeachment article as early as Wednesday, with her attention turned to the Senate, where it remains unclear whether the chamber will start working on the matter when it meets again or waits for 100 days to allow the next Biden administration to do the crucial work before getting back to the subject.

Fall

The reaction continues against President Trump and his group of supporters involved in the Washington DC riot. Deutsche Bank AG and Signature Bank are withdrawing from Trump, with the German lender saying it will no longer do business with the president and his company, while the signature announced it is closing two of his personal accounts and asked him to resign. Twitter Inc., which banned Trump from its platform last week, said it closed more than 70,000 accounts for spreading conspiracy theories associated with QAnon. The president is also losing more political allies, with Acting Homeland Security Secretary Chad Wolf abruptly resigning yesterday. The FBI is warning of new armed protests before Joe Biden’s inauguration on January 20.

Treasury test

With 10-year US Treasury yields rising nearly a quarter of a percent this year, reaching 1.16% this morning, today’s record auction of $ 38 billion 10-year bonds at 3 pm ET , will be closely watched. The beginning of 2021 also saw a rapid steepening of the yield curve, as the prospect of a unified Democratic government prompted investors to reprecise expectations for economic stimulus and debt issuance following the outcome of the Georgia runoff. Movements in the Treasury Bond market are raising concerns about the resilience of the market’s recovery, especially in emerging markets.

Market slip

Global equities stabilized this morning after yesterday’s losses, with the dollar’s bullish halt giving some scope for falling purchases. Overnight, the MSCI Asia Pacific index added 0.3%, while Japan’s Topix index closed 0.2% above. In Europe, the Stoxx 600 Index gained 0.1% at 7:50 am, with cyclical sectors recovering from yesterday’s decline. The S&P 500 futures pointed to some green at the opening, oil was at $ 53 a barrel and gold won.

Arriving

November JOLTS job vacancy data is at 12 noon. The DOE crude oil production forecast for January and the WASDE report are both at 2 pm Rosengren and George are accompanied by Minneapolis Fed Chairman Neel Kashkari at a separate event on racism and economics. CES continues and Jeffrey Gundlach holds his annual webcast.

January 11, 2021

11/01/2021 – What do you need to know for today?

Trump’s impeachment, Twitter shares plummet and China sees more cases of Covid.

Second time

House Speaker Nancy Pelosi said yesterday that the House would adopt a resolution to impeach President Donald Trump for the second time in less than two years, unless Vice President Mike Pence and the cabinet invoked the 25th Amendment this week. Although a House vote could take place as early as Wednesday, the Senate will not be in session until January 20, which would mean that an impeachment trial would delay all business for the next Biden government. If Trump is impeached after stepping down, that would prevent him from running for president again.

Diving

Twitter Inc.’s shares fell 7% in the pre-market after the platform permanently banned President Trump’s account on the site. The company said in a statement that the outgoing president’s tweets violated his policies by risking incitement to violence. The move followed by a similar suspension Facebook Inc. Parler, a social networking site focused on free speech, has been banned from app stores and seen its web hosting services cut by Amazon.com Inc. President Trump, who remains challenging in the face of social media bans and potential impeachment plans to travel to Texas this week to visit the border wall and is also preparing at least one more round of pardons.

Pandemic

China has reported a new cluster of the virus as the country sees outbreaks in the northeastern provinces. In Europe, Germany is calling on its citizens to further limit social contacts, after the death toll has surpassed 40,000. The drive to vaccinate continues to gain momentum, with Los Angeles turning the Dodgers stadium into a mass vaccination center. The number of shots fired rose to 25 million in 42 countries.

Market slip

Treasury stocks and bonds are retreating this morning as the dollar rises against all of its major peers. Overnight, the MSCI Asia Pacific index fell 0.2%, with Japan’s markets closed for a holiday. In Europe, the Stoxx 600 Index was 0.2% lower at 7:50 am GMT, after reaching a 10-month high last week. The S&P 500 futures pointed to a drop in the opening, the 10-year Treasury yield was at 1.107%, oil was trading below $ 52 a barrel and gold was higher.

Arriving

There are no economic data of note today. Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan speak later. Democratic House legislators are expected to reveal an impeachment article. CES, the annual fair organized by the Consumer Technology Association, runs until Thursday. Carnival Corp. is among the companies that report profits.

January 07, 2021

07/01/2021 – What do you need to know for today?

Biden’s certified victory, confirmed Democratic scan and due claim data.

Recognized

President Donald Trump’s challenges to the outcome of the November elections finally ended in the early hours of this morning, after Congress formally recognized Joe Biden as the next president of the United States. While certification of his victory should be delayed by challenges from Republican lawmakers, in the end the delay came after the Capitol was invaded by a crowd of Trump supporters, forcing lawmakers to flee to safety. The president saw many of his closest supporters and advisers abandon him after the scenes of violence in Washington.

To control

While the almost unbelievable events unfolded on Joe Biden’s certification, it was confirmed that Jon Ossoff had defeated Senator David Perdue in Georgia, meaning that Democrats will control the Senate for the next two years with Kamala Harris the decisive vote in the chamber. which will be divided into 50:50. In the short term, a new stimulus package is now likely with help from state and local governments and more stimulus checks for individuals.

Unemployment insurance claims

There will be another check on the state of the US labor market at 10:30 am, when weekly unemployment insurance claims are published, with 800,000 claims for expected benefits, a small increase from last week. Yesterday’s ADP number of private jobs showed a surprising drop in jobs for December, the first drop since April. Economists are divided over whether tomorrow’s payroll number will be positive or negative, as the economy remains under pressure from the pandemic.

Markets rise

Global equity investors have ignored the violence in Washington yesterday, while focusing on the likelihood of further economic stimulus. Overnight, the MSCI Asia Pacific index rose 0.8%, while Japan’s Topix index closed up 1.7%. In Europe, the Stoxx 600 Index gained 0.3% at 7:50 am, led by construction stocks, mining companies and energy companies. The S&P 500 futures pointed to a higher opening, the 10-year Treasury yield was at 1.044%, oil maintained its gains and gold fell.

Arriving

In addition to the unemployment insurance data, the US November trade balance is released at 10:30 am. December ISM services are at 12 noon. Regional Fed presidents Patrick Harker, Thomas Barkin, James Bullard, Charles Evans and Mary Daly, spoke at several events later. Bed Bath & Beyond Inc., Walgreens Boots Alliance Inc. and Constellation Brands Inc. report the results.

January 06, 2021

06/01/2021 – What do you need to know for today?

Democratic Senate control in the balance, Treasury yields soar and more gloomy news from Covid.

Fair

Democrat Raphael Warnock won the first of two runoff elections declared in Georgia, while Jon Ossoff holds a very small advantage over Republican Sen. David Perdue in the other race where the count continues. The narrow margin of victory in any case in this dispute will almost certainly generate legal challenges and recounts. If Democrats win both seats, the party will control the White House, the Senate and the House, giving President-elect Joe Biden more freedom to implement his political agenda.

1%

It is this political agenda that is at the forefront of investors’ minds this morning as they try to price Biden’s policies. Yield on 10-year Treasury bills rose above 1% for the first time since March, with a Democratic sweep being seen paving the way for more spending. There were also signs in the bond market that investors are expecting more inflation to come, with the spread between the yields of five- and 30-year bonds reaching the highest level since November 2016. The dollar index has dropped to almost the lowest value since 2018.

One in 30

The scale of the Covid crisis in the UK was revealed yesterday, when the government released data showing that one person in 50 in England has the virus, while one in 30 in London is infected. The new strain of the virus pushed the country’s health service close to the breaking point, with the expectation of worsening in the coming weeks. Governments around the world are under pressure to accelerate vaccine programs. In the US, the South is once again seeing a rapid increase in the number of cases, with more than 45% of Covid tests testing positive in Alabama in the past two weeks.

Mixed actions

Although the election in Georgia is dominating the bond market today, there are some significant stock moves as well. Overnight, the MSCI Asia Pacific index added 0.1%, while Japan’s Topix index closed up 0.2%. In Europe, the Stoxx 600 Index gained 0.9% at 7:50 am GMT, with banks rising and energy stocks adding gains in the wake of Saudi Arabia’s decision to cut oil production. While the S&P 500 futures pointed to a slight drop in the opening, the biggest moves were in the Nasdaq futures, which were under pressure because investors were concerned about Democratic policies toward big tech companies. Oil traded at more than $ 50 a barrel and gold contributed to recent gains.

Arriving

The ADP job change data for December is at 10:15 am, the service and composite PMIs are at 11:45 am and factory and durable goods orders are at 12 noon. Oil inventory data is at 12:30. The December Fed meeting is published at 4 pm. The biggest event of the day will be in Washington, where Congress will meet to certify the results of the November election, with dozens of Republican lawmakers ready to contest the count. President Donald Trump is also trying to pressure Vice President Mike Pence to reject some voters.

January 05, 2021

05/01/2021 – What do you need to know for today?

Georgia decides to vote, OPEC + disagrees and more virus blocks.

Voting

President Donald Trump and President-elect Joe Biden held campaign events in Georgia yesterday, ahead of the second round in the state that will decide which party has the majority in the U.S. Senate. There are signs that investors are preparing for a Democratic sweep of the two seats on offer, with shares that would benefit from that party’s policies outperforming yesterday, while market-derived inflation expectations have risen to the highest level since 2018. It is likely to take a few days before the voting results are known, with scores that are likely to face legal challenges that may further delay confirmation of the winners.

Retrying

Yesterday’s meeting of OPEC and its allies to adjust production levels for February ended with nothing more than a commitment to meet again today. The two big players in the alliance – Saudi Arabia and Russia – disagree on whether to continue with the production increase planned for next month, agreed in December. The Saudis argue that new coronavirus blocks mean that demand will be less than expected, while Russia’s oil minister wants to stick to the original plan. There are also difficulties caused by some members already pumping more oil than their quota. A barrel of West Texas Intermediate for February delivery was at $ 48 before negotiations resumed.

Lockdowns

The post-holiday wave of tightening restrictions is in full swing in Europe, with the United Kingdom entering a blockade, while Italy and Germany are looking to tighten restrictions. The US Food and Drug Administration has warned health officials to follow its vaccine administration guidelines after an official suggested cutting dose levels for Moderna Inc.’s injection as a way to immunize more people. The current case history in the United States may break records again, as the number of infections increases.

Mixed markets

Yesterday’s volatile start to the stock seems unlikely to repeat today, as global indicators are having a rather peaceful session. Overnight, the MSCI Asia Pacific index added 0.6%, while Japan’s Topix index closed down 0.2%. In Europe, the Stoxx 600 Index fell 0.1% at 7:50 am Brasília time. The S&P 500 futures pointed to the index’s potential to recover some of Monday’s losses and the 10-year Treasury yield was 0.933%. Gold was higher and Bitcoin held over $ 31,000.

Arriving

December’s ISM Manufacturing PMI is released at 12 noon. Total vehicle sales for December are published today. Chicago Fed Chairman Charles Evans and New York Fed Chairman John Williams speak later. Voting in the Georgia elections runs from 9 am to 9 pm. OPEC + negotiations are scheduled to resume at 11:30 am.

January 04, 2021

04/01/2021 – What do you need to know for today?

Georgia is on Trump’s mind, a holiday rally for Bitcoin fails and OPEC + plans the next move.

Wishes

President Donald Trump urged election officials in Georgia to “find 11,780 votes” (on a recorded call released by the Washington Post) to turn the state that President-elect Joe Biden won in the November election. There was a quick reaction after the recording of the call was launched, with Congressman Adam Schiff, chairman of the House Intelligence Committee, saying the president’s actions were “potentially criminal”. Georgia is holding a crucial second round tomorrow, which will decide which party holds the majority in the Senate. Elsewhere in the election news, Joe Biden’s certification as president on January 6 is expected to be challenged by a group of senators led by Ted Cruz, from Texas. While the measure has little effect, some Republican lawmakers are warning of the dangerous precedent it sets.

Volatile

Bitcoin’s big holiday hike – which has seen cryptocurrency rise more than $ 11,000 since Christmas Eve to trade above $ 34,000 yesterday – suffered a blow this morning. The digital token fell by more than $ 5,000 to trade close to $ 28,000. The 17% decline is the biggest intraday decline since March for volatile assets. While it is, as always, difficult to pinpoint the cause of Bitcoin’s latest price movements, the cryptocurrency gained more than 300% in 2020.

Choice of oil

Last year’s OPEC + decision to have monthly meetings to reach an agreement on production is having its first test today, when the group meets to decide whether to increase production in February. With Covid-19 cases rising globally, several member states are cautious about making any changes to production at the moment, according to delegates. The possibility of a delay in rising supplies combined with a falling dollar helped push a West Texas Intermediate barrel for February delivery close to $ 50 earlier this morning, before dropping to $ 48.88 at 7:50 am, Brasilia time.

Markets rise

Investors are starting the new year as they ended the previous year, pushing stocks higher as risk appetite remains high. Overnight, the MSCI Asia Pacific Index rose 0.9%, with Japan’s Topix index closing 0.5% below, with the yen appreciating against the dollar. In Europe, the Stoxx 600 Index gained 1.5% at 7:50 am, driven by strong euro area manufacturing data. The S&P 500 futures pointed to another record high at the opening, the 10-year Treasury yield was at 0.931% and gold rose.

Arriving

The US Manufacturing PMI final reading for December is at 11:45 am, with construction spending for November at 12 noon. Chicago Fed Chairman Charles Evans, Atlanta Fed Chairman Raphael Bostic and Cleveland Fed Chairman Loretta Mester kick off the year for monetary policy speeches. Both President Donald Trump and President-elect Joe Biden are campaigning in Georgia ahead of tomorrow’s vote.

December 18, 2020

What do you need to know for today? – 12/18/2020

The stimulus negotiations have not yet arrived, parliamentarians trying to reach an agreement with Brexit, and Moderna’s vaccine is approved.

Stimuli today?

The devil is definitely in the details of the US fiscal stimulus package, which continues to move slowly towards an agreement. The current tough spots are Democrats’ requests for federal funds to match 100% of FEMA’s pandemic-related disasters and Republican demands to end the Federal Reserve’s emergency loan program. With government funding about to end tonight, there is a small chance of a brief shutdown if a deal is not reached today. The majority leader in the House, Steny Hoyer, said the leaders will decide on Friday morning whether to present a draft bill for voting.

Moment of truth

If you are thinking that Congressional stimulus negotiations have been going on forever, take a look at Europe, where Brexit-related negotiations have been going on for years. The European Union’s main Brexit negotiator, Michel Barnier, told the regional parliament this morning that the negotiations are at the “moment of truth”, with only a few hours to reach an agreement. UK Prime Minister Boris Johnson said yesterday that the talks are in “serious shape” as an impasse over fishing rights continues to delay any agreement. Traders still expect more fireworks until the end of the year, when the current post-Brexit transition period ends.

Another vaccine passed

As expected, US Food and Drug Administration consultants supported Moderna Inc.’s vaccine for emergency use authorization. Despite some production difficulties, Moderna said it is still on track to supply 20 million doses this month and 85 to 100 million to the United States in the first quarter of next year. Measures to slow the spread of the pandemic are likely to remain in place until 2021, with the current situation in many countries remaining bleak.

Calm markets

Global stock markets are having a rather slow session on what is the last Friday of the year for most. Overnight, the MSCI Asia Pacific index fell 0.4%, while Japan’s Topix index closed less than 0.1% above. In Europe, the Stoxx 600 index gained 0.1% at 7:50 am Brasília time, while investors observed any progress in Brexit negotiations. The S&P 500 futures pointed to little change at the opening, the 10-year Treasury yield was at 0.943% and both oil and gold were slightly lower.

Arriving

The US current account in the third quarter is expected to show a deficit of $ 187 billion when the data are published at 10:30 am. Canadian retail sales in October will also be released on that occasion. The US Leaderboard Index is at 12:00 and the Baker Hughes platform count is at 15:00. Nike Inc. reports earnings today.


December 17, 2020

What do you need to know for today? 12/17/2020

The $ 900 billion stimulus package is approaching, the French president has Covid and claims for unemployment insurance are due.

Today?

Stop me if you’ve heard this before, but it looks like there may be a US fiscal stimulus package unveiled today. Talks between Congressional leaders came together around a $ 900 billion deal that would include payments to individuals while omitting help from state and local government, as well as responsibility for protecting lawsuits that have stalled negotiations for months. With government funding running out tomorrow night, the weather has become very tight. Senate majority leader Mitch McConnell warned Republican senators on a private call that they should be prepared to work over the weekend.

Covid French

President Emmanuel Macron has become the latest world leader to test positive for Covid-19, with his office announcing this morning that he has mild symptoms. The news comes as the pandemic continues to rage across Europe, with Germany reporting 45,000 new cases this morning, the biggest jump in its history. The US recorded a record 3,835 deaths from the virus yesterday, however, case growth is slowing, especially in the midwest. The scale of the task in delivering the vaccine is becoming clear, with some hiccups arising in the effort to send vaccines across the United States.

Unemployment insurance

There is not much hope that there will be much improvement over last week’s surprise surge in initial unemployment claims for 853,000, when the data are published at 10:30 am Eastern time. The average estimate by economists polled by Bloomberg is a modest decline to 815,000 and continuing claims fall only slightly. It is also worth keeping an eye on, before opening, the Bank of England’s last political decision of the year, after a meeting that would have been overshadowed by the ongoing uncertainty about trade negotiations with the EU.

Markets rise

Stimulus conversations, speed of vaccine delivery and the continued weakness of the dollar in the wake of yesterday’s Fed decision are the dominant themes in the markets. Overnight, the MSCI Asia Pacific index added 0.7%, while Japan’s Topix index closed 0.4% higher. In Europe, the Stoxx 600 Index gained 0.4% at 7:50 am, with miners among the best performers. The S&P 500 futures pointed to more green at the opening and the 10-year Treasury yield was at 0.925%, while oil and gold rose.

Arriving

US building and construction permit numbers begin and the Philadelphia Fed Business Outlook is at 10:30 am. Kansas City Fed manufacturing activity for December is at 1 pm. Banco de México’s fee decision is at 4 pm FedEx Corp., Accenture Plc and BlackBerry Ltd. are among the companies reporting earnings today.

December 16, 2020

What do you need to know for today? 12/16/2020

No stimulus deals yet, decision day at the Fed and a health check for the economy.

Today?

Leading congressional leaders from both parties met for several hours yesterday and then reported that they are making progress, although they have not yet reached an agreement. Even today, lawmakers are expected to unveil a $ 1.4 trillion general bill that is expected to pass by Friday to avoid a government shutdown. On the other side of the Atlantic, negotiations continue on a post-Brexit trade agreement between the United Kingdom and the European Union, with signs of cautious optimism on both sides that an agreement can be reached.

Decision day

The Federal Reserve is almost certain to announce that it is keeping interest rates unchanged when the latest monetary policy decision is released, at 4 pm ET. The statement will be accompanied by economic forecasts and 30 minutes after a press conference with President Jerome Powell. For investors, the most important will likely be any comments on the progress of the asset purchase program, currently at $ 120 billion a month. Analysts at Goldman Sachs Group Inc. said there was a possibility of a dovish surprise today that could further stimulate the dollar’s weakness.

PMI Day

The December Composite Purchasing Managers’ Index for the euro area published by IHS Markit stood at 49.8, just below the level that points to an expansion of the economy. The reading, well above economists’ expectations for 45.7, was driven by German industry and French services. The euro rose above $ 1.22 for the first time since 2018, after better-than-expected numbers. UK PMIs showed that the country grew again in December, as inventories boosted manufacturers. Markit’s figures for the US economy are released at 11:45 am

Markets rise

Stock investors who cling to stimulus optimism were rewarded this morning with economic data ahead of the Fed’s decision. Overnight, the MSCI Asia Pacific index added 0.8%, while Japan’s Topix index closed 0 , 3% above. In Europe, the Stoxx 600 Index gained 0.9% at 7:50 am with all sectors of the industry in the green. The S&P 500 futures pointed to a higher opening, the 10-year Treasury yield was 0.923% and gold went up.

Arriving

US retail sales data for November are released at 10:30 am, with expectations of a 0.3% contraction. The December NAHB housing market index is at 12 noon and oil traders are expecting an increase in oil stocks when the data are released at 12:30 pm. The Northeast is predicted to be hit by a storm that could cover the region in this afternoon’s snow.

December 15, 2020

12/15/2020 – What do you need to know for today?

Crucial day for stimulus impulse, more blockages approach and another oil alert.

Today?

With the Congressional session closing and a necessary government financing package by Friday, today looks likely to be the day when we will find out if lawmakers see a way to agree to a stimulus bill. Senate majority leader Mitch McConnell and minority leader Chuck Schumer will hold press conferences later, respectively, where both can indicate what they are willing to include and exclude from the coronavirus relief bill. Some senior Democrats are already in favor of moving forward with the $ 748 billion proposal, which leaves out the most controversial elements.

Harsh winter

Before the vaccine was launched, restrictions introduced to prevent the spread of the virus are intensifying again. London is entering the most difficult level of the government’s three-tier system as of tomorrow, as cases increase in the city. Restrictions are being tightened across Europe, with Germany entering a lockdown tomorrow, the Netherlands following a similar path and Italy hoping to follow suit. New York Governor Andrew Cuomo said the state was on its way to a second total blockade. The total number of deaths caused by the virus in the USA surpassed 300,000 yesterday.

Demand warning

The International Energy Agency cut its forecasts for global fuel consumption, warning that the market remains fragile after a new wave of virus restrictions. The IEA said it hoped that OPEC +’s tight rein on supplies would help eliminate swollen global stocks in the next 12 months. The West Texas Intermediate barrel for delivery in January was trading at more than $ 47 this morning, as positive news about the recovery in China helped offset the worsening IEA outlook.

Mixed markets

Stock investors are seeing the glass “half full” this morning, as they focus on the vaccine launch and positive corporate news. Overnight, the MSCI Asia Pacific index fell 0.4%, while Japan’s Topix index closed down 0.5%. In Europe, the Stoxx 600 Index was 0.2% higher at 7:50 am EST, with Volkswagen AG recovering strongly after the board supported the CEO. The S&P 500 futures pointed to an opening gain, the 10-year Treasury yield was at 0.9% and gold was rising.

Arriving

November US and November import and export price indices are published at 10:30 am. November industrial production data is published at 11:15 am October ICT flows are at 6 pm The FOMC meeting begins. Brexit negotiations continue in Brussels.

In the photo, the balance sheet of the main aggregated central banks in the world, with the estimate for the year 2021.

It means that the BC’s will continue to increase their balance sheet even further, expanding asset purchase programs, to stabilize the markets and not let stocks fall.

It is the famous nationalization of markets.

December 14, 2020

12/14/2020 – What do you need to know for today?

The bipartisan stimulus plan is coming, vaccine delivery is starting and Brexit negotiations continue beyond the deadline.

This week

After President Donald Trump signed the interim spending bill on Friday, Congress has a week to agree to a $ 1.4 trillion year-long bill combined with Covid-19 relief. A bipartisan group of lawmakers plans to unveil a $ 908 billion stimulus plan today. They will also present a smaller package of $ 748 billion, which does not include state and local aid provisions and liability protections for employers, which have proven to be the biggest obstacles in the negotiations so far. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin plan to speak again today, while Senate majority leader Mitch McConnell has suggested that Congress move forward with the smaller bill.

Get up

The first shipments of Pfizer Inc.-BioNTech SE vaccines to the U.S. are scheduled to arrive this morning, with doses in all 50 states by Wednesday, according to Gustave Perna, the army general who serves as chief of operations. of Operation Warp Speed. He expects 40 million doses to be available by the end of the month if Moderna Inc.’s vaccine is authorized for emergency use later this week. While the rapid speed of launch is great news for 2021, restrictions remain in effect for now, with London poised to return to the most restricted level in the coming days, and the number of cases remains high in the U.S.

Extra Mile

To the surprise of almost anyone, Sunday’s Brexit negotiation deadline passed without an agreement and without an end to the negotiations. UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen said they would “go further” to reach an agreement, raising hopes that a deal could be struck. While the British pound rose more than 1.5% this morning, continued uncertainty about the outcome of the negotiations, the relative cost of insuring against a fall against the euro in the next three weeks remains close to the highest level since 2016.

Falling markets

The continued hope of some kind of Washington stimulus package and pictures of American vaccines in delivery trucks is helping to lift investors’ spirits. Overnight, the MSCI Asia Pacific index added 0.2%, while Japan’s Topix index closed 0.6% above. In Europe, the Stoxx 600 Index gained 0.9% at 7:50 am Brasília time, with bank shares having the best performance. The S&P 500 futures pointed to quite green at the opening and the 10-year Treasury yield was 0.916%. Oil rose again after the oil tanker exploded in the Middle East and gold fell.

Election ended?

Today is the day when the electoral college meets to officially elect Joe Biden. Some Republican lawmakers said this should be the end of President Trump’s attempts to overturn the election result, with Senator Lamar Alexander of Tennessee saying yesterday that he expects the president to “put the country first” and congratulate Biden. Congress will officially count the votes of the Electoral College and declare the winner on January 6.

12/13/2020 – EDF, BoJ and BoE Week – Decisions interest and PMI’s dominate the economic calendar

The central banks of the USA, Japan and the United Kingdom will decide on monetary policy in next week while the PMI flash searches for the USA, UK, UK Euro, Japan and Australia will give an insight into the state of the economic recovery global. Other important launches to follow include industrial production and sales in the US and China retail; Canada and UK inflation and retail trade data United; Japan’s tankan and inflation research; Employment numbers in Australia; and prices to the consumer and wholesale in India.

COT report

  • ES COT: -18.3k (Last week: -11k) (Week before: -52k)
  • COT NQ: + 31.7k (Last week: 170) (Week before: -6.3k)
  • EURO COT: + 16.5k (Last week: + 1.6k) (Week before: -1.33k)
  • COT LIBRA: + 13.6k (Last week: + 9.2k) (Week before: + 2.6k)
  • GOLD COT: + 8.9k (Last week: + 16.4k) (Week before: + 7.35k)
  • COT DXY: -3.4k (Last week: -321) (Week before: -1.78k)

ECONOMIC CALENDAR

Monday

Tuesday

Wednesday

Thursday

Friday

The US Federal Reserve is expected to keep the target range for the federal funds rate stable at 0- 0.25 percent at the end of its two-day meeting on Wednesday, with investors focusing on President Jerome Powell’s press conference looking for clues about how much time the bank will continue to buy bonds. In September, the central bank anchored expectations that it will keep interest rates close to zero until full employment returns, and the inflation to rise to 2% and is expected to moderately exceed 2% for some time. With respect to economic data, Markit’s PMI survey is likely to show that the sector’s economy US private sector expanded at a robust pace in December, albeit slower in compared to November. Other notable publications are retail sales, industrial production, building permits and housing initiation, producer prices and foreign trade.

Elsewhere in America, central banks in Mexico and Colombia are likely to leave interest rates at current levels when they meet next week. The main data to be following include Canada’s inflation rate, retail sales and housing data; Checking account of Brazil and consumer morale; Monthly figures for Peru’s GDP and unemployment rate; and GDP of Argentina’s third quarter, unemployment rate and consumer prices.

On the other side of the Atlantic, Britain and the EU continue post-Brexit trade negotiations, amid pessimism on both sides that an agreement can be reached. Meanwhile, investors turn their attention to the Bank of England meeting, in which lawmakers should leave monetary policy unchanged after increasing the size of the purchase program of bonds at £ 150 billion last month. The UK’s economic calendar also contains important updates on inflation data, retail sales, market indicators work, consumer confidence and CBI factory orders. In addition, rapid research Markit PMI will likely show that Britain’s private sector has grown again in December, after the government lifted England’s national blockade.

Elsewhere in Europe, euro zone Markit flash PMIs should point to a new contraction in the bloc’s private sector production, as several countries in the region extended restrictions due to the increase in coronavirus cases. Other important releases include eurozone industrial production and trade balance; Business research in Germany and France; Foreign trade data from Spain and Switzerland; Employment growth in Poland; and industrial production in Turkey. In addition, the central banks of Switzerland, Norway, Russia and Hungary will decide on monetary policy.

In Asia, the Bank of Japan is expected to maintain its policy interest rate at -0.1% and the target yield of 10-year Japanese government bonds at around zero when making a policy meeting on 17 and 18 December. In addition, the quarterly survey of sentiment the bank’s tankan business should show an improvement in the confidence of the big manufacturers Japanese. Data on foreign trade and inflation rate will also be monitored with attention. Elsewhere, all eyes are on industrial production, retail sales, China’s unemployment rate, investment in fixed assets and property price index for November.

The Reserve Bank of Australia will release the minutes of its last monetary policy meeting. The Australia investors will also focus on job numbers and flash PMIs December Markit. Other highlights for the Asia-Pacific region include: GDP and current account of the New Zealand’s third quarter; Consumer and wholesale prices in India; Trade balance of Indonesia; and unemployment rates in South Korea and Hong Kong. Central banks of the Indonesia, the Philippines and Taiwan will decide on interest rates.

December 11, 2020

12/11/2020 – What do you need to know for today?

No stimulus deals yet, no likely Brexit deals, and experts agree with Pfizer’s vaccine.

Even roadblock

Just when it was beginning to look like a deal could be made in Washington, negotiations between Democrats and Republicans were suspended again on issues of corporate responsibility and state aid. The progress of the past few days, in which negotiations between the two sides have gathered around US $ 900 billion, has generated optimism that a deal could be reached next week. Now Senate majority leader Mitch McConnell wants lawmakers to move forward with a smaller bill that does not include state government assistance and protection of corporate responsibility. In addition to aggravating fiscal problems, the Senate yesterday postponed the vote on a provisional one-week bill that would keep government funding beyond today.

No likely agreement

weekend sees the final, final, definitive deadline, no return, no extension of the deadline for negotiations between the European Union and the United Kingdom to reach a post-Brexit trade agreement. UK Prime Minister Boris Johnson has warned companies and the public to prepare to leave the European Union’s single market without a deal and EU leaders only discussed the issue for 10 minutes at its night-long summit. every Thursday. The negotiators have returned to work and have until Sunday night to reach an agreement.

Approval

A committee of independent vaccine experts in the United States supported the vaccine Pfizer Inc. and BioNTech SE, a move that is likely to lead to the Food and Drug Administration’s authorization for emergency use. The shot may not be fast enough for Americans who are experiencing new outbreaks at previous critical points and thousands of deaths a day due to the pandemic. The increase in cases and deaths in Germany also continues, with another day of record deaths increasing the chances of a forced blockade during the holiday period.

Falling markets

With the optimism of the US stimulus evaporating rapidly and all the signs pointing to a pandemic worsening before it gets better, equity investors see a good reason to reduce their risk exposure. Overnight, the MSCI Asia Pacific added 0.3% Japan index while the Topix index closed 0.3% above. In Europe, the Stoxx 600 Index fell 1.2% at 7:55 am Eastern time. The S&P 500 futures pointed to a lot of red at the opening, the 10-year Treasury yield was 0.89% and gold was slightly lower.

Arriving

US producer price data for November is at 10:30, with University of Michigan consumer opinion numbers for December at 12:00. What has been a strong week for oil ends with the Baker Hughes platform counting at 3pm. Kansas City Fed President Esther George and Fed Supervisory Vice President Randal Quarles speak later.

December 10, 2020

10/12/2020 – What do you need to know for today?

Covid’s deaths increase again, unemployment benefit claims are due and it is a decision day at the ECB.

Not talking yet

Senate majority leader Mitch McConnell and House Speaker Nancy Pelosi have yet to engage in direct negotiations over the composition of a new fiscal stimulus bill. Although the $ 916 billion package favored by McConnell and the $ 908 billion bipartisan plan seen as the way forward by Pelosi are quite similar in first-tier spending, significant differences remain over the content of the account over time. running out. Meanwhile, the pandemic continues to take a heavy toll in the United States. Daily deaths exceeded 3,000 for the first time yesterday, with more than 221,000 reports of infections reported.

Claims, inflation

The initial number of today’s unemployment claims at 10:30 am will give some indication as to whether the larger than expected drop in the number of claimants was the start of a positive trend or just an anomaly caused by the Thanksgiving holiday. The economists polled by Bloomberg appear to be in the second field, with the median expectation that the number will rise to 725,000 today. Also at 10:30 am, November’s inflation data are released, with annual rates for both core inflation and core expected to slow slightly, as the economic recovery is still far away.

More attenuation

The European Central Bank is ready to deliver another round of monetary stimulus when it announces its last decision at 9:45 am this morning. Lawmakers are expected to add 500 billion euros ($ 605 billion) to their emergency bond purchase program, which can be extended to the end of next year. There may also be another round of ultra-cheap loans to banks. Economists expect no change in interest rates and will contact the press conference with President Christine Lagarde at 10:30 am to hear the bank’s latest economic projections.

Arriving

The US Food and Drug Administration could release the Pfizer Inc.- BioNTech SE vaccine for emergency use after meeting external consultants today. Airbnb Inc. makes its market debut today, and while it is unlikely to exceed 92% pop from DoorDash Inc.’s first day, it priced the IPO above the range traded at $ 68 per share. The US WASDE report is at 2 pm, with the November monthly budget statement at 4 pm. Adobe Inc., Oracle Corp., Broadcom Inc. and Costco Wholesale Corp. are among the companies that report the results.

ECB increases Quantitative Easing by another € 500 billion

December 09, 2020

09/12/2020 – What do you need to know for today?

The White House joins stimulus talks, Germany sees a record number of deaths and Brexit talks continue over dinner.

Mnuchin pitch

Treasury Secretary Steven Mnuchin’s proposal for a $ 916 billion pandemic relief package is seen by some as an increase in the chances of reaching an agreement. It is the Trump administration’s first move since election day, and comes a week after Democratic leaders in Congress withdrew their demands from a multi-trillion-dollar package. House Speaker Nancy Pelosi and Democratic Senate leader Chuck Schumer saw this as progress, but seemed to prefer to focus on the ongoing bipartisan negotiations. There is a possibility of movement over the latter, with Senate majority leader Mitch McConnell, suggesting for the first time that he would be willing to put aside his demands for protecting corporate responsibility.

Record deaths

Germany had the highest number of daily deaths from the coronavirus yesterday, bringing the death toll in the country to more than 20,000 and leading to an appeal by Chancellor Angela Merkel in parliament to do more to stop the virus from spreading. In the USA, coastal states have again become the hot spots, with midwestern states such as North Dakota and Minnesota registering a drop in numbers. The UK vaccination program continues, and a report by the US Food and Drug Administration staff said there are no safety concerns that would prevent the Pfizer Inc.-BioNTech SE vaccine from receiving emergency use authorization before tomorrow’s meeting with external consultants.

Dinner time

UK Prime Minister Boris Johnson will travel to Brussels today to have dinner with European Commission President Ursula von der Leyen, while both sides are trying to find some way to move forward in Brexit trade negotiations. Although official statements from both sides point to the hope of reaching an agreement, significant differences remain on the main issues. The pressure to seal a deal is high, with the current transition period ending in three weeks, and UK-based companies are already beginning to feel the tightening of Brexit preparations as they struggle to deal with the pandemic at the same time.

Markets rise

Markets are gaining ground today as the White House’s entry into stimulus negotiations has increased optimism for a deal. Overnight, the MSCI Asia Pacific index gained 0.8%, while Japan’s Topix index closed 1.1% above. In Europe, the Stoxx 600 Index rose 0.6% at 7:50 am Brasília time, with almost all sectors of the industry in the green. The S&P 500 futures pointed to a slightly higher opening and the 10-year Treasury yield was 0.944%. Oil rose after attacks on Iraqi facilities and gold fell.

Arriving

The Bank of Canada is expected to keep fees, asset purchases and guidance unchanged when announcing its last policy decision at 12:00. US wholesale sales and inventory data for October and the number of job openings for the month will also be at 12:00. At 3 pm, the US sells $ 38 billion in 10-year notes. DoorDash Inc. has its commercial debut. Designer Brands Inc. and Campbell Soup Co. are among the companies that report profits.

December 08, 2020

12/08/2020 – What do you need to know today?

McConnell remains a stimulus obstacle, the election is almost over and Brexit negotiations fail.

Holding

Optimism for a stimulus deal by the end of the year is easing somewhat as Senate majority leader Mitch McConnell continues to push his own plan and maintain a hard line to introduce federal limits on Covid-19 lawsuits against companies. There is little time left to reach an agreement. The House is expected to vote on a continuing resolution on Wednesday to keep the federal government running for another week to resolve the wrinkles of a comprehensive bus project that could cover stimulus spending.

Safe Harbor

Today is the deadline for states to certify their voters to the Electoral College. After that, there is little chance that any legal challenge will overturn the November 3 election result. Despite spending $ 8.8 million on efforts to reverse the result of the count, President Donald Trump has failed to make any progress. President-elect Joe Biden continues to build his office, with people familiar with the matter saying he plans to appoint retired Army general Lloyd Austin as secretary of defense.

Difficult

UK Prime Minister Boris Johnson said that negotiations with the European Union are “very complicated”, but he still hopes to reach an agreement. He is due to meet European Commission President Ursula von der Leyen in Brussels this week after telephone calls between the pair in the past few days and new negotiations have produced no progress. Investors were taken aback by a deteriorating business outlook, as a deal seemed closed last week. Johnson had a reason to celebrate, as the UK today became the first western country to start vaccinating its population against Covid-19.

Market slip

The lack of progress in suspending stimuli and the worsening of the pandemic that is causing more restrictions worldwide are weighing on sentiment. Overnight, the MSCI Asia Pacific index fell 0.1%, while Japan’s Topix index closed down 0.1%. In Europe, the Stoxx 600 Index fell 0.3% at 7:50 am GMT, with travel-related stocks among the biggest losers. The S&P 500 futures pointed to a similar drop in openness and the 10-year Treasury yield was 0.936%. Oil has decreased somewhat and gold has hardly changed.

Arriving

U.S. third quarter non-farm productivity and unit labor cost data is at 10:30 am. The Federal Communications Commission of the United States initiates an auction of the so-called C band frequencies, which will increase the spectrum for 5G wireless networks. President Donald Trump is scheduled to hold a “vaccine summit” at the White House. H&R Block Inc. AutoZone Inc. and GameStop Corp. are among the companies that reported results.

December 07, 2020

12/07/2020 – What do you need to know for today?

The stimulus agreement is approaching, Brexit close to the edge of the cliff and Covid gets worse before it gets better.

Details

More details about the $ 908 billion bipartisan stimulus package are expected to be revealed later today, with a Republican senator supporting the proposal saying he is confident that Senate majority leader Mitch McConnell and President Donald Trump will participate. Markets are increasingly expecting a deal to be struck, with last week’s disappointing unemployment data seen as helping to force GOP restraints to support the plan.

11th hour

While it may seem that Brexit negotiations have only taken a few hours to collapse in the past four years, today can really be a time of crisis. The telephone conversation between UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen led to the resumption of negotiations over the weekend, with both sides saying “significant differences” remain. Leaders are expected to speak again later today to see if any further progress has been made in the negotiations that were originally scheduled to end on October 15. The pound sterling extended its drop to 1.6% this morning, after The Sun newspaper in London reported that Johnson was ready to exit the negotiations.

Worse

United States Chief of Health and Human Services Alex Azar said that all Americans who want to get a vaccine in the second quarter of next year, with the Food and Drug Administration meeting on granting emergency authorization for an injection developed by Pfizer Inc. and BioNTech SE on Thursday. Until vaccines spread, the virus will continue to spread, with all signs pointing to a worsening situation in the short term. Scott Gottlieb, a former FDA commissioner and board member of Pfizer, said he sees the United States potentially reaching 400,000 deaths from the virus by the end of January.

Market slip

Global equities are generally weaker this morning after US markets closed higher on Friday due to the stimulus’ optimism. Overnight, the MSCI Asia Pacific index fell 0.3%, while Japan’s Topix index closed down 0.9%. In Europe, the Stoxx 600 Index fell 0.4% at 7:50 am GMT, with London’s FTSE 100 gaining from the pound’s decline. The S&P 500 futures pointed to some losses at the opening and the 10-year Treasury yield was 0.943%. Oil fell from a nine-month high and gold was lower.

Arriving

It is a very quiet start to the week when it comes to economic data, with consumer credit figures for October due at 5 pm being the only noteworthy figure in the US. Today is the last day to register to vote in the Georgia Senate runoff vote, an election that will decide the balance of power in the U.S. Senate. Coupa Software Inc. and Toll Brothers Inc. are among the companies that report profits.

Weekly Analysis12/06/2020 – Week full of economic indicators, with monetary policy of ECB, BoC and Bacen

The status of coronavirus and the introduction of vaccines worldwide will continue to dominate the headlines this week as well as peace over a deal post-Brexit trade. Elsewhere, monetary policy meetings in the Euro, Brazil and Canada will be carefully monitored, as well as the numbers of GDP in Japan, the Eurozone, the United Kingdom, Russia and South Africa. Important publications include information data from the USA and China; Feeling do consumer in the USA and Australia; UK and China foreign trade; Production Germany and India; and Japan’s current account and machine orders.

COT report

  • COT ES: -11k (Last week: -52k) (Week before: + 1k)
  • COT NQ: -170 (Last week: -6.3k) (Week before: -1.2k)
  • EURO COT: + 1.6k (Last week: -1.33k) (Week before: -5.1k)
  • GOLD COT: + 16.4k (Last week: + 7.37k) (Week before: + 11.5k)
  • COT DXY: -321 (Last week: -1.78k) (Week before: +154)

ECONOMIC CALENDAR

Monday

Tuesday

Wednesday

Thursday

Friday

In the US, the consumer price report for November is likely to show the rate of inflation falling even more in relation to the six-month high of September and remaining well below the Federal Reserve’s 2 percent target amid pent-up demand due to the Coronavirus crisis. At the same time, the preliminary estimate of the consumer’s feeling of Michigan for December is likely to show a slight deterioration in morale amid growing COVID-19 cases and new restrictive measures across the country. Other publications notable include producer prices, job vacancies at JOLT, budget statement government and the final readings of wholesale stocks and non-agricultural productivity of the third quarter.

Elsewhere in America, central banks in Canada and Brazil are likely to they will keep interest rates at record low levels when they meet on Wednesday. Important data to follow includes Canada Ivey PMI; Inflation rate and industrial production in the Mexico, and retail trade in Brazil and consumer prices.

Abroad, the EU and the UK continue post-Brexit trade negotiations with officials on both sides sending mixed signals about progress in the negotiations. The negotiators are tied to differences in fisheries, state aid to companies and rules for resolving disputes. Meanwhile, ONS will publish monthly GDP data, along with with industrial production, construction production and trade balance, and Halifax will be disclosing its house price index.

In other parts of Europe, the ECB will issue its latest monetary policy decision, with the investors expecting an extension of the pandemic bond purchase program by six months and an expansion of the size of the stimulus package. An extension of nine or twelve months or a larger increase in the size of the bond program would support markets. In the economic calendar, investors will keep an eye on the final eurozone estimate for GDP and employment in the third quarter; Germany industrial production, trade investor’s morale and morale; Industrial production figures for France, Spain and Italy; inflation rates in the Netherlands, Sweden and Ireland; Final GDP data for the third quarter of Russia; and unemployment rates in Switzerland and Turkey.

In Asia, China will publish consumer and producer prices for November, with markets pointing to a deceleration in the inflation rate to the lowest since 2009, while producer deflation is likely to decrease slightly. In addition, the numbers trade will provide a vision of the post-pandemic economic recovery, with the exports and imports growing sharply in November.

Elsewhere, Japan’s main data includes the final GDP reading of the third quarter, current account, machinery orders, household expenses, producer prices, index Reuters Tankan and Eco Watchers Survey. Australian investors will turn their attention for NAB business confidence, Westpac consumer confidence, the Service Index Ai Group and house prices in the third quarter.

Other highlights include: industrial production in India; GDP data for the third quarter of South Africa and inflation rate; New Zealand Business NZ PMI.

December 03, 2020

03/12/2020 – What do you need to know for today?

Democrats make a stimulus offer, Covid’s deadliest day, and OPEC + responds.

New offer

House Speaker Nancy Pelosi and Democratic Senate leader Chuck Schumer said a $ 908 billion proposal from a bipartisan group of lawmakers should serve as the basis for negotiations with Congressional Republicans and the White House. It is the first real break with entrenched divisions and pressures Senate majority leader Mitch McConnell to negotiate a deal that could be included in the year’s spending account.

Covid

Rapid progress in vaccines to combat the spread of the pandemic is great news, but even with the best goodwill in the world, it will be next year before the spread is under control. Until then, the restrictions are likely to remain in place, increasing when necessary to control a wave like in Los Angeles, where Mayor Eric Garcetti issued an order to stay at home. The fatalities announced by Covid reached 2,700 yesterday, the most lethal day of the disease in the country, with the total number of deaths caused by the virus probably surpassing 300,000 in the next two weeks.

Commitment

The delay in the OPEC and its allies meeting begins today, with delegates suggesting that the cartel is closing a deal to cut production after days of behind-the-scenes negotiations. The proposal at the table is to extend current production levels by one month beyond the end of January 1 of the current agreement and then gradually reduce production restrictions over several months. West Texas Intermediate and Brent crude futures for the first month fell slightly this morning, ahead of the meeting.

Arriving

Today’s initial 10:30 am unemployment insurance claims come with a health alert, as the data may not be reliable around vacation periods, according to Bloomberg Economics. The expectation is 775,000 new applicants. November Markit services from the U.S. and composite PMIs are at 11:45 am, with the non-manufacturing ISM at 12:00 pm. Companies that reported earnings include Dollar General Corp., Michaels Cos Inc. and Toronto-Dominion Bank.

December 02, 2020

02/12/2020 – What do you need to know for today?

Stimulus optimism, UK approves vaccine and Biden is not ready for a restart in China.

Yields spike

Investors divested Treasury bonds yesterday amid an explosion of optimism about the chances of a stimulus package. A bipartisan group of lawmakers submitted a $ 908 billion proposal yesterday and House Speaker Nancy Pelosi and Senate majority leader Mitch McConnell are also making further attempts to break the deadlock. The upward movement in Treasury yields, accompanied by an increasingly steep yield curve, will have some side effects in the stock, currency and credit markets.

Approval

The coronavirus vaccine developed by Pfizer Inc. and BioNTech SE will be available in the UK from the next week after the injection has received emergency clearance. The country has ordered enough doses of the vaccine to immunize 20 million of its 67 million population, with the very elderly and those living in homes being the first in line for vaccination. The Food and Drug Administration meets on December 10 to discuss approval of Pfizer’s treatment. For now, the pandemic continues to have an impact, with deaths in Germany peaking at seven months and hospitalizations increasing in the United States.

No change

A quick restart of US-China relations seems unlikely after the change of occupant in the White House after President-elect Joe Biden told the New York Times that he would leave the first-stage trade agreement in place while doing a thorough review of US policies in compared to its Asian rival. The outgoing government had a new headache when it was revealed that prosecutors are investigating whether several individuals have offered political contributions in exchange for presidential pardons. President Donald Trump said the alleged irregularities revealed in unsealed court documents were “fake news”.

Mixed markets

After reaching record highs in the US yesterday, today is a more moderate day for global equity, with investors looking for new catalysts after setting prices with all the optimism they can muster. Overnight, the MSCI Asia Pacific index added 0.2%, while Japan’s Topix index closed up 0.2%. In Europe, the Stoxx 600 index fell 0.2% at 6:55 am Eastern time, with traders favoring defensive actions. The S & P500 futures pointed to a drop in the opening, oil remained stable ahead of tomorrow’s OPEC + meeting and gold continued to gain ground.

Arriving

A busy week for work data starts with the ADP job change number at 10:15. The crude oil stock numbers are released at 12:30. The Fed’s last Beige book is published at 4pm. Fed Chairman Jerome Powell appears on the 12 am Finance Panel and New York Fed Chairman John Williams speaks later. Negotiations on the UK’s post-Brexit relationship with the EU appear to be peaking in London, with pound sterling traders increasingly sensitive to trading updates as the deadline approaches.

December 01, 2020

12/01/2020 – What do you need to know for today?

More vaccine progress, Powell and Mnuchin testify, and OPEC + negotiations postponed.

Coming soon

Pfizer Inc. and partner BioNTech SE sought regulatory authorization for their Covid-19 vaccine in Europe, following a similar move by Moderna Inc. yesterday. This puts vaccines on track for approval before the end of the year. Vice President Mike Pence signaled a quick response from US regulators, saying that the distribution of a vaccine could begin as early as the third week of December. Separately, there is new evidence that Covid-19 was in the U.S. earlier than previously recognized, with a study that found infections in blood samples collected in late 2019.

Powell’s Testimony

The prepared testimony of Fed chairman Jerome Powell, released before he appeared before the Senate Banking Committee this morning, shows him in the classic economist way. On the one hand, he welcomes the rapid development of the vaccine, on the other hand, he warns that the current increase in cases of Covid in the USA may be a challenge in the coming months. Treasury Secretary Steven Mnuchin will also appear on the committee today and is likely to be asked about the recent dispute between his department and the Fed.

No agreement

Despite a pre-meeting meeting of ministers on Sunday and a meeting of OPEC members yesterday, there is still no consensus between cartel members and their allies on production levels as current restrictions expire in January. This means that the planned OPEC + meeting for today to finalize an agreement has been postponed until Thursday to allow more time to reach an agreement. While the oil market is no stranger to long and difficult OPEC meetings, the stalemate is unsettling traders, with oil having another volatile session today, with futures oscillating between gains and losses.

Markets rise

Global stock traders are starting the month on a positive note, with strong factory data from Asia increasing optimism about vaccines. Overnight, the MSCI Asia Pacific index increased 1%, while Japan’s Topix index closed 0.8% above. In Europe, the Stoxx 600 Index gained 0.8% at 7:55 am Brasília time, with mining companies and banks among the best performers. The S&P 500 futures pointed to a lot of green at the opening, the 10-year Treasury yield was 0.837% and gold recovered some ground.

Arriving

Canada’s GDP in the third quarter is at 10:30 am, with economists expecting annualized growth to be close to 50%. November’s Markit manufacturing PMI for the U.S. is at 11:45 am. November vending data is published today. At 12:00, Powell and Mnuchin appear before the Senate Banking Committee. Fed Governor Lael Brainard, San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans speak later. Salesforce.com Inc. is among the companies that report results.

November 30, 2020

11/30/2020 – What do you need to know for today?

Congress faces deadlines, OPEC does not reach an agreement before the meeting and a huge acquisition.

Stimulus, spending, Shelton Time is running out in Washington for Congress to agree on a new round of financing for government spending, while the chances are slim for Judy Shelton’s confirmation to the Federal Reserve Council and another round of stimulus. With work on bills that will prevent the December 11 shutdown as a priority completed, the $ 2 billion for President Donald Trump’s border wall in the Senate version is likely to be a critical point for Democrats again. Trump also threatened to veto the annual defense authorization bill on language that would force the military to rename the bases currently named in honor of Confederate leaders.

No agreement Ministers from OPEC countries and their allies failed to make progress yesterday in extending cuts in oil production that expire in January. This meeting was a pre-meeting, with the main event starting today with OPEC oil ministers, who will be meeting tomorrow by non-OPEC members. A barrel of West Texas Intermediate for January delivery dropped to less than $ 45 this morning, as certainty about future global production remains uncertain.

Corporate update S&P Global Inc. is in advanced negotiations to buy IHS Markit Ltd. for about $ 39 billion in what could be the second largest acquisition in the world this year, with a possible announcement today. The Wall Street Journal, which first reported on the negotiations, said the deal would be an all-share transaction. Elsewhere, Airbnb Inc. and DoorDash Inc. will release higher-than-expected valuation ranges for their initial public offerings this week, according to people familiar with the matter. There was more bad news for Jack Ma’s Ant Group Co., which now seems unlikely to complete its stalled public offering next year.

Mixed markets There are some signs of a reversal in the rotation that has taken stocks to historic levels, possibly with investors recording profits for the month. Overnight, the MSCI Asia Pacific index fell 1.6%, while Japan’s Topix index closed down 1.8%. In Europe, the Stoxx 600 Index was 0.1% higher at 7:50 am Brasília time, with banks lagging behind. The S&P 500 futures pointed to a decline in openness, the 10-year Treasury yield was at 0.844% and gold fell further below $ 1,800 an ounce.

Arriving… The Chicago PMI is at 11:45 am with the October US home sale pending at 12 noon. Arizona must certify that Joe Biden won the state electoral college votes today. Richmond Fed President Thomas Barkin speaks later. Zoom Video Communications Inc., a darling of investors in the year of working at home, reports the results. It’s Cyber ​​Monday, with US online shoppers expecting record spending.

November 29, 2020

11/29/2020 – First week of December, we will have several important economic indicators, highlighting the Manufacturing PMI’s, OPEC + Meeting and the US Payroll to finish on Friday. Fed Chairman Jerome Powell gives testimony at the congress:

All eyes are on Fed Chairman Powell’s testimony to Congress next week, as well as Friday’s US Payroll, which is likely to point to a further slowdown in the labor market recovery. In other countries, GDP data from Brazil, Australia, Turkey and Canada will be highlighted, as well as surveys of manufacturing and services PMI worldwide and monetary policy actions by RBA and RBI. Other releases include commercial data for the US and Canada, factory orders for the US and Germany, industrial production and retail sales for Japan and South Korea.

November 25, 2020

11/25/2020 – What do you need to know for today?

With dumping of US economic data, lawmakers agree to avoid closing and more record numbers of cases before Thanksgiving.

Dice

Tomorrow’s Thanksgiving holiday in the US means that Thursday’s economic data list has been postponed to today. Initial claims for unemployment benefits at 10:30 am Eastern time are expected to reach 730,000, just below last week, with continued claims dropping to 6 million. The second reading of the third quarter’s GDP and orders for durable goods are also in the moment. Data on income and personal expenses, sales of new homes and central PCE – all for October – are at 12:00. At 4:00 pm, the minutes of the Federal Reserve meeting on November 5 are published.

Progress

President-elect Joe Biden continues to nominate senior officials who will join his next government. While the reaction to his choice of Treasury, Janet Yellen, was almost universally positive, Treasury Secretary Steven Mnuchin may have already undermined his spending discretion, putting the $ 455 billion in unspent Cares Act funds recovered from the Federal Reserve into an account that lawmakers will control. There was good news for both current and incoming administrations, with Democratic and Republican lawmakers agreeing on the annual spending bill needed to prevent government shutdown on December 11.

Record cases

The Thanksgiving holiday season is expected to be very different this year, as the pandemic continues to occur almost unchecked in the United States. Texas reported a record number of cases yesterday, while California’s top health official warned that daily deaths from the virus could reach a new record by Christmas. Federal authorities are working to reduce the quarantine period required for people who can test negative. In Europe, German Chancellor Angela Merkel is proposing further tightening of restrictions on the country, while French President Emmanuel Macron said he will gradually lift the national blockade from Saturday.

Mixed markets

After yesterday’s record-breaking session, global equity markets are a little calmer this morning, as investors await a series of economic news. Overnight, the MSCI Asia Pacific index remained largely unchanged, while Japan’s Topix index closed 0.2% above. In Europe, the Stoxx 600 index fell 0.3% at 7:50 am, with banks among the worst performers. The S&P 500 futures pointed to a small drop in the opening, the 10-year Treasury yield was 0.87%, the oil recovery continued and gold remained above $ 1,800 an ounce.

ECB Alert

The underperformance of eurozone banks today may be linked to a review of the European Central Bank’s financial stability published this morning, which said that creditors in the region are likely to have to set aside more money for loan defaults. The central bank also echoed earlier warnings from the Federal Reserve and the International Monetary Fund that the worsening pandemic could lead to a sudden drop in “stretched” valuations of some asset prices. The ECB said Brexit’s risks to financial stability are “largely contained” after the European Commission allowed temporary access to essential derivatives clearing houses in London after 31 December.

Durable goods orders rising, Q3 GDP unchanged and Initial claims for unemployment insurance rising by second consecutive week

Due to the Thanksgiving holiday in the US this Thursday, some news that would be released on Thursday, will pass today, making this a SUPER WEDNESDAY!

Durable Goods Orders

Durable Goods Orders US durable goods orders are expected to slow their growth in data October preliminary results, but instead increased more than expected, with an increase of 1.3% MoM (vs + 0.8% exp). However, despite the crash, orders for durable goods continue with a drop of 1.1% in the annual index.

After the collapse of March and April, orders for durable goods increased by 6 months consecutive.

Shipments of essential capital goods, used to form investment estimates in business equipment within the government’s gross domestic product report, increased 2.3% MoM (well above the expected + 0.4% MoM).

3rd Quarter GDP (GDP) (2nd Revision) Some traders are already looking beyond the fourth quarter’s GDP to the first quarter of 2021, in which some banks are already expecting a double fall with a forecast of -1.0% contraction. Therefore, the data released by BEA today were not so much importance.

The Commerce Department announced that, in the third quarter, GDP rose 33.1% annualized, unchanged from the first estimate released in October, and over the consensus expectations.

It is worth mentioning that personal consumption grew 40.6% in the 3Q after falling 33.2% in the quarter previous year, and ended up missing the estimate of 40.9%. Although the general change in GDP has not revised in relation to the anticipated estimate, upward revisions for investment investment, housing investment and exports were offset by downward revisions in state and local government spending, investment in inventory and consumer spending. Imports have been revised upwards.

Specifically:

  • Personal consumption was revised modestly from 25.27% in the original estimate for 25.22%
  • Fixed Investment went from 4.96% to 5.23%
  • The variation in private stocks fell from 6.62% in the original estimate to 6.55%
  • Net exports hurt -3.17% of GDP, modestly more than -3.09% of the original estimate
  • Government consumption subtracted -0.76% from the final figure, compared to -0.68% in the initial estimate

BEA also calculated that profits increased a record 27.1% at a rate quarterly in the third quarter, after decreasing 10.3% in the second quarter. The profits corporate customers increased 3.3% in the third quarter compared to the previous year. The profits were impacted by provisions of the Check Protection Program. More details:

  • Profits of domestic non-financial corporations increased 43.8%, after decreasing 12.9%.
  • Profits of domestic financial corporations increased 5.4% after an increase of 6.1%.
  • Profits for the rest of the world increased 10.3% after decreasing 18.9%.

Finally, for inflation watchers, the GDP price index rose 3.6% in the 3Q, after drop 1.8% in the previous quarter; has not changed from the original estimate. The core of the PCE rose 3.5%, also in line with expectations, after falling 0.8% in the quarter previous.

Initial Claims for Unemployment Insurance

For the second week in a row, the number of Americans filing insurance claims unemployment for the first time increased (printing at 778k vs 730k exp and 742k before).

Illinois, Michigan, Washington and California (all run by Democrats) were the states that experienced the biggest increase in initial claims, while Louisiana and Massachusetts recorded the biggest drop in claims.

But as continuing claims fall – but worse than expected – pandemic emergency claims are increasing as Americans decrease standard unemployment benefits.

Worse, the aggregate number of Americans receiving unemployment insurance has increased more from 130,000 last week to well over 20 million. This is the first increase since September 11

And that is before the more generalized blocks start to happen again.

November 24, 2020

11/24/2020 – What do you need to know for today?

The presidential transition begins, WHO sees restrictions on viruses in 2021 and Bitcoin rally.

Cooperation

It has been three weeks since the election and President-elect Joe Biden finally gained access to government agencies and officials after the General Services Administration recognized him as the apparent winner of the vote. The GSA move came after Michigan certified Biden as the winner, President Donald Trump underwent new legal setbacks and increased pressure from Republican senators to get the process going. The big news from the Biden camp yesterday was the choice of former Fed chairman Janet Yellen as secretary of the Treasury, a move seen as a sign that he plans to grow with the stimulus.

Vaccines, but

The chief scientist at the World Health Organization said that people will need to take precautions next year as countries need time to vaccinate their populations. Meanwhile, the global travel industry is pushing for so-called Covid passports, which would allow travelers to demonstrate their virus-free status. The UK is preparing to end its current blockade in early December, while Greater Los Angeles reintroduces additional measures starting tomorrow night as the cases increase. Bloomberg launched its Covid Resilience Ranking showing the best and worst places to be in the pandemic era.

Bitcoin rally, gold fall

Bitcoin’s rapid rise continued this morning, rising from $ 19,000 for the first time since 2017. The recovery was accompanied by the usual collection of new price increases, with Tom Fitzpatrick, strategist at Citigroup Inc., saying earlier this month that the token could potentially reach $ 318,000. There is less good news for lovers of more traditional petty economic games, with gold falling for the second day, trading at $ 1,815 an ounce at 7:50 am Brasília time.

Markets rise

Equity investors are welcoming the start of the transition and news that Yellen will head the Treasury Department. Overnight, the MSCI Asia Pacific index added 1%, while Japan’s Topix index closed 2% above. In Europe, the Stoxx 600 Index gained 0.5% at 7:50 am, with oil stocks faring the best performers. The S&P 500 futures pointed to more green at the opening, the 10-year Treasury yield was at 0.862% and oil was at $ 43.50 a barrel.

Arriving

US property price data for September is at 11 am, with Consumer Confidence and Richmond Fed Manufacturing from November at 12 noon. The US sells $ 56 billion in 7-year notes at 3 pm. St. Louis Fed President James Bullard and New York Fed President John Williams speak later. It’s a great day for profits with Dell Technologies Inc., Best Buy Co., Inc. and Tiffany & Co. among the many companies reporting today.

November 23, 2020

11/23/2020 – What do you need to know for today?

Another advance of the vaccine increases the pressure on Trump to grant, and it’s PMI day.

Third way

A vaccine developed by the University of Oxford and AstraZeneca Plc prevented an average of 70% of participants in a large trial from becoming ill. Although the effectiveness falls short of the headline numbers for Pfizer Inc. and Moderna Inc., the initial analysis of the results showed that 90% effectiveness can be achieved by changing the dosage regimen. The vaccine will be much cheaper than the others previously announced and can be stored in a regular refrigerator. The United States plans to start using the Pfizer vaccine in mid-December, as the number of cases, hospitalizations and deaths continues to increase rapidly.

Transition

Republican pressure on President Donald Trump is growing for him to concede defeat in the election or, at least, allow the transition process to begin. With states like Michigan and Pennsylvania preparing to certify their electoral results today, their legal challenges are not gaining ground and even their legal team is separating, Trump’s ways of nullifying the election are quickly closing. President-elect Joe Biden plans to appoint longtime adviser Antony Blinken as secretary of state, according to people familiar with the matter as he continues to prepare for the presidency.

Another contraction

The new blocks pushed the euro area into another contraction, with the IHS Markit composite Purchasing Managers’ Index falling to 45.1 in November from 50 the previous month. The strong performance of the manufacturing sector helped Germany to keep expanding for the month, while France and the United Kingdom saw production shrink. The US is expected to experience continued growth when the economy’s PMIs are published at 11:45 am Eastern Time.

Markets rise

The announcement of the AstraZeneca vaccine added to the risky climate that is pushing stocks to new records and the dollar to the 2018 lows. Overnight, the MSCI Asia Pacific ex-Japan index added 0.8%, with the index South Korean kospi reaching the all-time high. In Europe, the Stoxx 600 Index gained 0.4% at 7:50 am, with better performing bank and energy stocks. The S&P 500 futures pointed to a higher opening, the 10-year Treasury yield was 0.854%, oil traded above $ 43 a barrel and gold fell.

Arriving

The Chicago Fed National Activity Index for October is at 9:30 am. The US sells $ 56 billion in 2-year notes and $ 57 billion in 5-year notes today. Richmond Fed President Thomas Barkin, San Francisco Fed President Mary Daly and Chicago Fed President Charles Evans spoke later. The White House may publish a list of 89 Chinese technology companies denied access to U.S. technology. Urban Outfitters Inc. and Warner Music Group Corp. are among the companies that reported results.

Service and manufacturing PMI’s well above expectations in the USA!

BREAKING: The US stock markets are suddenly melting after a statement by the Biden administration suggests a lack of management involvement in the strategy and no sign of any commitment from the left in any hope of short-term stimulus.

Politico’s Jake Sherman reports that Biden’s spokesman Andrew Bates reports that the Biden administration does not support reducing Democratic demands in Covid’s bailout negotiations.

“This is incorrect. The president-elect fully supports the president and leader in his negotiations ”.

The result is a sudden drop in shares, led by Nasdaq, erasing all overnight gains, as this suggests that there will be no short-term stimulus agreement.

Is the dollar soaring, pricing for less deficit?

And with the peak of the dollar, gold was hit hard:

November 20, 2020

11/20/2020 – What do you need to know for today?

Biden beats Georgia again, Mnuchin and Powell disagree and governments are rushing to issue vaccine approvals.

Outrageous

President-elect Joe Biden said President Donald Trump “would go down in history as one of the most irresponsible presidents” as he becomes increasingly frustrated by the Trump administration’s lack of cooperation in the transition. While the president’s team continues to use legal means to contest the election, a manual recount in Georgia showed that Biden maintained the lead. The president-elect, who turns 78 today, said he chose the Treasury secretary and will soon announce who he is.

Fiscal Domain

A disagreement arose between Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell over the preservation of emergency lending programs designed to strengthen the economy. Mnuchin wrote to the Fed demanding a return of the money the government provides to the central bank for loans to certain markets. The Fed issued a statement saying the “complete set” of measures needs to be maintained. While Mnuchin said he is merely complying with the law prescribed by the Cares Act, markets have reacted nervously to signs of disagreement between the two main US economic policy makers.

Vaccine race

The European Union could pay more than $ 10 billion to buy doses of Pfizer Inc and BioNTech SE vaccines, while the bloc is preparing to approve vaccines in the second half of next month. American hospitalizations have reached a record high of almost 80,000, while the country’s medical system is under pressure due to the growing pandemic. California imposed a 10 pm curfew for the vast majority of residents. Both Hong Kong and Japan are seeing an increase in cases.

Mixed markets

While the disagreement between Mnuchin and Powell shook America’s futures, investors cling to optimism about the vaccine’s progress. Overnight, the MSCI Asia Pacific index added 0.3%, while Japan’s Topix index closed up 0.1%. In Europe, the Stoxx 600 Index gained 0.7% at 7:50 am, Brasília time, with the best performing energy and mining stocks. The S&P 500 futures pointed to little change at the opening, the 10-year Treasury yield was 0.842%, oil traded above $ 42 a barrel and gold remained largely unchanged.

Arriving

Trump participa de uma cúpula virtual de Cooperação Econômica Ásia-Pacífico esta manhã. O presidente do Fed de Dallas, Robert Kaplan, o presidente do Fed de Richmond, Thomas Barkin, o chefe do Fed de Atlanta, Raphael Bostic, e o presidente do Fed de Kansas City, Esther George, falam depois. A contagem mais recente de plataformas Baker Hughes é às 15h. A Foot Locker Inc. está entre as empresas que relatam os resultados.

November 19, 2020

11/19/2020 – What do you need to know for today?

Unemployment data set to signal a very slow recovery, news about more positive vaccines and a big increase in interest rates.

Claims

Weekly unemployment insurance claims are likely to have remained close to 700,000, and continued claims are expected to fall further. The data, published at 10:30 am Eastern Time, is likely to point to a continued very slow recovery in the economy. Adding to concerns about the outlook is the end of a series of pandemic support programs later in the year, with little sign that Congress has agreed to a new stimulus package to help prevent another slowdown.

Virus

There was more positive news about vaccines with the University of Oxford, confirming that the one that is developing with AstraZeneca Plc has produced strong immune responses in older adults. The production of the vaccine by Moderna Inc. is already being prepared, with European production expected to start later this month. The need for a successful vaccine as soon as possible remains very clear, with the United States experiencing 250,000 deaths from the virus and hospitalizations continuing to rise across the country.

Turkey Season

Turkey’s newly appointed central bank governor, Naci Agbal, raised rates by a whopping 475 basis points this morning. The lira, which had been the worst performing currency among emerging market peers this year, rose in the wake of the decision – adding to a recovery that began with the replacement of the central bank president and the economy minister earlier this year. month. Elsewhere, European Central Bank President Christine Lagarde promised a strong monetary stimulus package in December and again urged governments to do more to alleviate the pandemic.

Market slip

This morning, global equity investors appear to be more concerned with blocking measures to prevent the virus from spreading than hopeful about the prospects for a vaccine. Overnight, the MSCI Asia Pacific index fell 0.5%, while Japan’s Topix index closed up 0.3%. In Europe, the Stoxx 600 index fell 0.8% at 7:50 am, with traders opting for defensive stocks. The S&P 500 futures pointed to a small drop in the opening, the 10-year Treasury yield was 0.855%, oil was lower and gold was also down.

Arriving

October’s Leading Index and existing home sales data is at 12pm. There are three Fed speakers scheduled today, with Christine Lagarde also speaking later. European leaders meet for a summit and President-elect Joe Biden is expected to hold virtual meetings with governors. Workday Inc., NetEase Inc. and Macy’s Inc. are among the companies that reported. The last day of the Bloomberg New Economy Forum focuses on health.

Initial claims for unemployment insurance increase from last month and come above analysts’ expectations by 35k.

Continuous orders decreased from 6.8 million to 6.36m (and below expectations of 6.47m).

ATTENTION: For my students in the American Market course (Shares and Futures), this week’s class (and the next ones) will be every Thursday, at 20h. We moved from Wednesday to Thursday due to student requests.

November 17, 2020

11/17/2020 – Retail sales disappoint in October, as stimuli disappear

On a year-over-year basis, growth in retail sales of goods and services decelerated, but remains relatively high

After the surprise increase in retail sales in September, analysts had expected a significant slowdown in growth in October, but the data was even worse with US core retail sales rising just 0.3% MoM (vs + 0, 5% MoM) and last month’s increase was remarkably revised downwards (from + 1.9% MoM to + 1.6% MoM).

On the numbers, Furniture, clothing and sporting goods had a notable drop in sales, as non-physical retailers (online / Amazon) increased.

Finally, the data from the Control Group – used for GDP calculations – were even worse, rising only 0.1% MoM.

It looks like Washington needs to send more money for free or the Americans will have to face reality.

November 16, 2020

11/16/2020 – What do you need to know for today?

Trump refuses to budge, the new block is lifted and Biden to announce recovery plans.

He won

President Donald Trump started a tweet with the words “He won” yesterday, raising expectations that Trump may be ready to grant the election. As he followed the post saying that he did not grant anything, people close to the president say that he is increasingly aware that he cannot overturn the vote. Trump’s bragging about the election is unlikely to interrupt a series of indecent political measures, including new measures against China, the sale of oil exploration rights in the Alaskan desert and care for the long-standing shower problem.

Without Lockdown

Two advisers to President-elect Joe Biden’s coronavirus say they oppose a national blockade and are instead in favor of targeted measures to contain the pandemic. The number of cases in the U.S. has surpassed 11 million, with 1 million reported last week. British Prime Minister Boris Johnson is isolating himself after contacting a colleague whose test was positive. German Chancellor Angela Merkel plans more restrictions on public and private meetings. Moderna Inc. and AstraZeneca Plc are expected to report vaccine test data soon, while Johnson & Johnson, Novavax Inc., Sanofi and CureVac NV continue to work on their candidates.

Recovery

Joe Biden will outline his team’s post-Covid recovery plan today, with the program set to promote the notion that the unemployed need jobs, not new skills. The approach implies a large round of government spending, something that makes Georgia’s runoff run critical to success, as this election will decide Senate control. Morgan Stanley analysts are optimistic about the outlook for the economy, saying that a vaccine and increased fiscal support means that investors must “trust the recovery”.

Markets rise

The cheerful mood among investors was helped by the signing of the Asian regional trade agreement, good economic news from China and signs that Biden will not close the US economy. Overnight, the MSCI Asia Pacific index increased 1.5%, while Japan’s Topix index closed up 1.7%. In Europe, the Stoxx 600 Index gained 0.6% at 7:55 am. The S&P 500 futures pointed to a strong opening, the 10-year Treasury yield was at 0.883%, oil was rising and gold was higher.

Arriving

November’s Empire Manufacturing is at 10:30 am. Biden and Vice President-elect Kamala Harris talk about economics at 3:45 pm. San Francisco Fed President Mary Daly and Fed Vice President Richard Clarida are today’s monetary policy speakers. This is the deadline for submitting the 13F to hedge funds. The Bloomberg New Economy Forum begins. Tyson Foods Inc., Baidu Inc. and Palo Alto Networks Inc. are among the companies that reported results.

Price action well defined with the vaccine news guys .. Bloomberg released this headline about the vaccine from Moderna Inc.

STUDY OF MODERN INC-PHASE 3 MEET STATISTICAL CRITERIA WITH 94.5% VACCINE EFFECTIVENESS.

At the same time came the rotation of sectors:

  • Selling at techs
  • Rise in other sectors (which causes nasdaq to de-correlate with s & p and others)
  • Fall in gold (hedge deleveraging)
  • Rise in oil (anticipated pricing for increased consumption)

Last Monday, the same thing happened … but with the news of the Pfizer vaccine. The daily price action was all down on the Nasdaq:

And at S&P despite rising with the news of the Pfizer vaccine, it ended up being pulled by the nasdaq afterwards .. and closing almost without gain.

November 06, 2020

06/11/2020 – What do you need to know for today?

Biden remains on the verge of victory, it is day of jobs and cases of virus increase again.

Almost

Joe Biden was ahead of President Donald Trump in Georgia, as the count is almost complete. The Democratic candidate only needs to claim a key state between Georgia, Pennsylvania, Nevada or North Carolina to reach 270 electoral votes to win a presidency. Trump has unleashed a flood of lawsuits that have so far struggled to gain momentum. In an incoherent speech last night, Trump said his allegations of electoral fraud “would end up in the country’s highest court”.

Payroll

The US labor market is expected to have extended its recovery last month, with the average estimate of economists polled by Bloomberg projecting that there were 593,000 jobs added in October. The unemployment rate must have dropped to 7.6% when the data are released at 10:30 am Eastern Time. Yesterday, Federal Reserve chairman Jerome Powell said the economy may need more fiscal and monetary support, as rising Covid-19 infections hamper prospects.

Covid cases

The United States yesterday became the first country to register more than 100,000 cases in one day, according to data compiled by Johns Hopkins University and Bloomberg. The increase in hospitalizations may force more blockages before Thanksgiving, according to a policy analyst. There are still little signs that the outbreak in Europe is under control, with France registering a record number of new cases and Austria having the highest number of daily deaths. Other restrictions were announced in Denmark as a mutation of the virus that began in the country’s mink population has spread beyond the region in which it was discovered.

Market slide

This week’s recovery is taking a break today, with investors relaxing part of the rise in asset prices while they wait for the final results of the US elections and concerns about the pandemic rising again. Overnight, the MSCI Asia Pacific index added 0.6%, while Japan’s Topix index closed above 0.6%. In Europe, the Stoxx 600 Index was 0.5% lower at 7:50 am, with cyclical stocks leading the losses. The S&P 500 futures pointed to a drop in the gap, the 10-year Treasury yield was at 0.775% and gold maintained its gains to trade above $ 1,950 an ounce.

Coming

Canada also publishes its October employment report at 10:30 am this morning, with an expected 75,000 job increase. September wholesale inventories in the United States are at 12pm and Baker Hughes’ latest probe count is at 3pm. CVS Health Corp., ViacomCBS Inc. and Marriott International Inc. are among the companies reporting today. Warren Buffett’s Berkshire Hathaway Inc. reports tomorrow.

November 02, 2020

Last day of the election campaign, deadly week of the pandemic, and oil is hit.

Biden ahead in the polls

A series of polls released yesterday show that Democratic candidate Joe Biden leads President Donald Trump both nationally and in battle states, although some state disputes remain extremely fierce. Trump took part in a rally tour of crucial states and now speaks in North Carolina, Pennsylvania, Michigan and Wisconsin. With a very high number of mailing ballots to process, there are already signs that the count in battlefield states may not be complete until several days after the vote.

Deadly week:

Covid-19’s deaths reached 1.2 million, after the highest number of deaths from the virus since April was reported last week. England will enter a second blockade this week after cases have increased there, following similar movements across much of Europe. World Health Organization director Tedros Adhanom Ghebreyesus said he was quarantined. There were more than 78,000 new infections in the US and 826 deaths of people reported yesterday.

Crude low:

Oil fell to a five-month low, while the market is gearing up for another double demand and supply shock. A barrel of West Texas Intermediate for December delivery was trading below $ 35 this morning, with the market digesting Libyan production, which is growing rapidly to 1 million barrels a day. Although the market has already learned what blockages can do for demand this year, the head of Asia at Vitol Group, the world’s largest independent oil trader, doubts whether the new blocks will lead to a significant drop in prices.

Markets rise:

It’s a huge week for investors, with the election, a Fed decision and due October payrolls, and they’re starting on a positive note. Overnight, the MSCI Asia Pacific index added 1%, while Japan’s Topix index closed up 1.9% above. In Europe, the Stoxx 600 Index gained 1.2% at 7:50 am, after technical difficulties led to a delay in starting prices. The S&P 500 futures pointed to a recovery in the opening, the 10-year Treasury yield was at 0.864% and gold was higher.

Arriving:

The Canadian-made PMI for October is at 11:30 am, with the final reading of the US number at 11:45 am. ISM Manufacturing is at 12 noon. Joe Biden hosts events in Cleveland and Pennsylvania. Lumber Liquidators Holdings Inc., Mondelez International Inc., Skyworks Solutions Inc. and Clorox Co. are among the many companies that have reported results.

Polls on voting for US Congress and Senates show Democrats ahead (in both):

In all Congressional polls, Democrats have a wide advantage (ranging from 5 to 11%), as expected.

The surprise comes in the Senate:

How do these House and Senate elections work?

All deputies in the house “get up” and will have to be reelected or new congressmen placed. In the Senate, 1/3 of the seats “stand up” to try for re-election or to put in new ones. Of the total number of senators who will run again, there are 23 Republicans and 12 Democrats.

If Democrats win the Senate majority as well, there is no worse scenario for Trump (governing without a majority in any home).

An algorithm that makes thousands of combinations of probabilities, according to polling data, shows that the chances of Democrats getting a majority in the Senate as well, are now 76%.

At the end of it all, I want to analyze which sources of research were right and which were wrong. We know about the possible manipulations that exist, that’s why the FiveThirtyEight website is so cool .. it takes all the available research and plays in a probabilistic model. It is much more difficult for dozens of different searches to be all wrong.

October 29, 2020

Complaints and GDP data, ECB decision day and a mass of technology gains due.

Eco check

Initial weekly unemployment insurance claims at 9:30 am Eastern time are expected to be slightly below last week’s 787,000. Continuing claims are seen to drop to less than 8 million. At the same time, the first reading of GDP for the third quarter is published, and the forecast is that it will be a record with annualized growth of more than 30% in the three months until the end of September, with the reopening of the United States economy after the pandemic blockade.

Decision day

The European Central Bank announces its last policy decision at 9:45 am this morning, followed by a press conference with Christine Lagarde at 10:30 am. Until recently, this meeting was expected to be little more than a pattern of waiting until further measures were announced in December, but Covid’s rapidly deteriorating situation in Europe could accelerate a change in the central bank. Both France and Germany announced new lockdowns yesterday, while Spain and Italy are considering new measures.

Earnings

There was a mix of corporate results in Europe, with Royal Dutch Shell Plc showing a higher than expected profit, while the profits of Credit Suisse Group AG lost estimates. Lloyds Banking Group Plc made a profit of more than £ 1 billion ($ 1.3 billion) and Volkswagen AG’s quarter was driven by strong demand from China. In the US, almost all tech giants are on the rise today, with results from Twitter Inc., Facebook Inc., Google, Alphabet Inc., Apple Inc. and Amazon.com Inc.

Markets rise

The shares are recovering some of the ground lost in yesterday’s defeat, which saw the S&P 500 index drop 3.5%. Overnight, the MSCI Asia Pacific index fell 0.3%, while Japan’s Topix index closed down 0.1%. In Europe, the Stoxx 600 Index was 0.5% higher at 6:50 am, while investors awaited the ECB’s latest decision. The S&P 500 futures pointed to a 1% gain at the opening, the 10-year Treasury yield was at 0.781% and gold has hardly changed.

Electoral update

Joe Biden continues to maintain a solid lead over President Donald Trump in the latest polls, with just a few days left to vote. The United States Supreme Court has not ruled in favor of Republicans in two cases brought in to force North Carolina and Pennsylvania to stop counting votes by mail on November 3. The very high level of early voting in Texas means that Democrats are now beginning to hope that they can turn the state around. Trump holds rallies in Florida and North Carolina today.

US GDP soars at record 33.1% in the third quarter, crushing expectations

Everything that falls is expected to rise, and a quarter after the collapse of US GDP in a record annualized drop of 31.4%, moments ago the BEA reported that in the third quarter the US economy rebounded by a similar record high of 33 , 1%, the biggest annualized increase in history.

And although on a YoY basis the recovery was not as impressive, with the U.S. economy still showing a 2.9% decline compared to a year ago, after trillions of stimuli … one can be sure that Trump will parade with this “blockbuster” number for the next 4 days.

Looking at the data breakdown, the increase in real GDP in the third quarter reflected increases in consumer spending, investment in inventory, exports, business investment and investment in housing that were partially offset by a reduction in government spending. Imports, subtracting from the GDP calculation, increased.

The increase in consumer spending reflected increases in services (with emphasis on health) and goods (with emphasis on motor vehicles and parts).

The increase in investment in inventory reflected an increase in retail trade inventories (led by car dealers). The reduction in government spending occurred in the federal, state and local governments.

A more detailed analysis of the final contributions reveals the following:

  • Personal consumption expenses were the bulk, or 25.27% of the 33.08% increase in GDP, strongly above a decrease of -24.01% in the 2nd quarter;
  • Fixed investment added 4.96% after subtracting -5.27% in the 2nd quarter;
  • Private stocks recovered strongly, adding 6.62% in the 3rd quarter after subtracting -3.50% in the 2nd quarter;
  • Net exports subtracted -3.09% from the final impression after adding a modest 0.62% in the 2Q;
  • Government consumption also pulled from GDP, reducing the bottom line by -0.68, after adding 0.77% in the second quarter.

Summing up some of the main contributions to financial results, while PCE added 25.27% to the final impression of the third quarter, government spending removed 0.68%.

October 28, 2020

Bloomberg: Covid’s dangerous moment, almost all hope of lost pre-election stimulus and China’s growth plan.

Infection Log:

The US added more than 85,000 coronavirus infections on Sunday, a new record breaking the previous day’s record. Vice President Mike Pence’s chief of staff tested positive for the disease, and President Donald Trump’s chief of staff admitted that the United States “will not control” the pandemic. The director-general of the World Health Organization said that some countries in the northern hemisphere are facing a “dangerous moment” with the spread of Covid-19 showing little sign of slowing down in Europe or the United States. There was some positive news on the vaccine front, with the Financial Times reporting that the AstraZeneca shot produced a robust immune response in older people.

Pessimism:

Any hope of a stimulus deal ahead of the election was largely extinguished by the lack of progress over the weekend. House Speaker Nancy Pelosi said she is waiting for another counter offer from Treasury Secretary Steven Mnuchin today, while both sides are trapped in the blame game for lack of progress. The Senate is expected to leave Washington today after voting on confirmation of Supreme Court nominee Amy Coney Barrett, and the House has already withdrawn. Although both could be called up again 24 hours in advance, it is unlikely during the last week of the campaign before the elections.

China Plan:

President Xi Jinping spoke at a meeting in Beijing dedicated to mapping the country’s 14th five-year plan. The project will focus on technological innovation, economic self-sufficiency and a cleaner environment. If China maintains the growth trajectory of recent years, it should become the largest economy in the world, surpassing the United States in the next decade. The country also announced that it will impose unspecified sanctions on Boeing Co.’s defense unit, Lockheed Martin Corp. and Raytheon Technologies Corp. after the US approval of $ 1.8 billion in arms sales to Taiwan.

Market drop:

Investors are showing signs of becoming increasingly concerned about the growth of Covid infections, as hopes for a stimulus package fade. Overnight, the MSCI Asia Pacific index fell 0.2%, while Japan’s Topix index closed down 0.4%. In Europe, the Stoxx 600 Index fell 0.7% at 6:50 am, with Germany’s DAX hit by a 20% drop in the shares of SAP SE software giants. The S&P 500 futures pointed to a drop in the opening, the 10-year Treasury yield was 0.808% and oil was below $ 39 a barrel.

Arriving:

The September Fed National Activity Index for September is at 9:30 am, with new home sales for that month at 11 am and the Dallas Fed Manufacturing Activity for October at 11:30 am. This week sees decisions by the European Central Bank, the Bank of Japan and the Bank of Canada, with the Federal Reserve and the Bank of England next week. Hasbro Inc. and Twilio Inc. are among the companies that reported results. In merger and acquisition news, Dunkin ‘Brands Group, Inc. is in negotiations to be closed by Inspire Brands, and Bayer AG has agreed to acquire US biotech company Asklepios BioPharmaceutical Inc. for up to $ 4 billion.

October 26, 2020

Bloomberg: Covid’s dangerous moment, almost all hope of lost pre-election stimulus and China’s growth plan.

Infection log:

The US added more than 85,000 coronavirus infections on Sunday, a new record breaking the previous day’s record. Vice President Mike Pence’s chief of staff tested positive for the disease, and President Donald Trump’s chief of staff admitted that the United States “will not control” the pandemic. The director-general of the World Health Organization said that some countries in the northern hemisphere are facing a “dangerous moment” with the spread of Covid-19 showing little sign of slowing down in Europe or the United States. There was some positive news on the vaccine front, with the Financial Times reporting that the AstraZeneca shot produced a robust immune response in older people.

Pessimism:

Any hope of a stimulus deal before the election was largely extinguished by the lack of progress over the weekend. House Speaker Nancy Pelosi said she is waiting for another counter offer from Treasury Secretary Steven Mnuchin today, while both sides are trapped in the blame game for lack of progress. The Senate is expected to leave Washington today after voting on confirmation of Supreme Court nominee Amy Coney Barrett, and the House has already withdrawn. Although both could be called up again 24 hours in advance, it is unlikely during the last week of the campaign before the elections.

China Plan:

President Xi Jinping spoke at a meeting in Beijing dedicated to mapping the country’s 14th five-year plan. The project will focus on technological innovation, economic self-sufficiency and a cleaner environment. If China maintains the growth trajectory of recent years, it should become the largest economy in the world, surpassing the United States in the next decade. The country also announced that it will impose unspecified sanctions on Boeing Co.’s defense unit, Lockheed Martin Corp. and Raytheon Technologies Corp. after the US approval of $ 1.8 billion in arms sales to Taiwan.

Market drop:

Investors are showing signs of becoming increasingly concerned about the growth of Covid infections, as hopes for a stimulus package fade. Overnight, the MSCI Asia Pacific index fell 0.2%, while Japan’s Topix index closed down 0.4%. In Europe, the Stoxx 600 Index fell 0.7% at 6:50 am, with Germany’s DAX hit by a 20% drop in the shares of SAP SE software giants. The S&P 500 futures pointed to a drop in the opening, the 10-year Treasury yield was 0.808% and oil was below $ 39 a barrel.

Arriving:

The September Fed National Activity Index for September is at 9:30 am, with new home sales for that month at 11 am and the Dallas Fed Manufacturing Activity for October at 11:30 am. This week sees decisions by the European Central Bank, the Bank of Japan and the Bank of Canada, with the Federal Reserve and the Bank of England next week. Hasbro Inc. and Twilio Inc. are among the companies that reported results. In merger and acquisition news, Dunkin ‘Brands Group, Inc. is in negotiations to be closed by Inspire Brands, and Bayer AG has agreed to acquire US biotech company Asklepios BioPharmaceutical Inc. for up to $ 4 billion.

October 23 ,2020

ATTENTION: About the TRUMP x BIDEN debate

Thursday night’s debate started with the two candidates behaving, more or less, until the two became involved in several fights over the Hunter Biden scandal (candidate Joe Biden’s son), which quickly dissipated.

For a quick summary of how the candidates fared:

  • COVID-19 – Tight, both clung to well-used discussion points
  • American families – Trump with the advantage due to a moment about “children in cages”. “Who built them?”;
  • Race in America – Trump ran over Biden over the 1994 crime and inaction law, and Biden had a very important moment;
  • Climate Change – Trump, who managed to get Biden to admit he would “take” the country away from oil;
  • National Security – Tie, as the matter was moved to Hunter Biden’s laptop, however Biden defended Trump’s attempts to portray him as a corrupt politician – hammering on Trump’s tax returns and bank account in China ;
  • Leadership – Biden, who argued that he would represent all Americans;

Overall, the two candidates were much calmer and better organized than they were during the first debate – although Biden seemed quite nervous for most of the debate. I doubt anyone will change their mind after tonight.

Moderator Kristen Welker, who – by asking several questions charged against Trump, allowed each candidate to follow the questions more than once. That said, she interrupted Trump 30 times and Biden twice.

The first question in the debate was about COVID-19:

Trump defended his government’s response, saying that “while 2.2 million people have been ‘modeled to die’, that ‘we are fighting against it and a lot’. Trump spoke of his personal experience with the disease and said he improved very quickly thanks to the treatment. Trump added that a vaccine will be ‘announced in weeks’.

Biden went into attack mode in his turn to speak – blaming President Trump for 220,000 deaths in the U.S. and suggesting that he does not deserve to remain president because of it.

When asked about the vaccine in ‘two weeks’, Trump said it is not a guarantee, but that Moderna, Pfizer and Johnson & Johnson were very close, and would be here “by the end of the year”.

Trump disse no final: “Não podemos nos trancar em um porão como Joe faz. Ele tem a capacidade de se trancar. Não sei, mas acho que ele ganhou muito dinheiro de algum lugar com isso.”

On the topic of National Security – second subject

Biden said that foreign nations that meddle in the US elections will ‘pay the price’, noting that “Russia is involved, China is involved to some degree and Iran is involved”.

“We are in a situation where we have foreign countries trying to meddle in the outcome of the election”

Trump accused Biden of receiving money from Russia and that he owed an explanation to the American people

Biden replied, “I didn’t take a single penny from any country” before declaring that Trump has a “secret bank account in China”. Biden then said that, having released “22 years of my tax returns”, he is clearly clean.

Trump: “I don’t make money from China, you do. I don’t make money from Ukraine, you do. I don’t make money from Russia, you do.”

When asked about Hunter’s position on the board of Ukrainian energy giant Burisma, Biden said he had no business with the company.

“I did my job impeccably,” he said, adding that there is no evidence that his son did anything wrong in Ukraine and that no one claimed he did it.

Then, the issue turned to American families – in particular, health.

Biden said he supports private insurance and will pass “Bidencare” – which he described as Obamacare with yet another public option. He then stated that he will reduce policies and drug prices.

“He wants to socialize medicine,” said Trump, adding that Vice President Kamala Harris also wants socialized medicine.

Then the subject went to the coronavirus stimulus package – with President Trump blaming Nancy Pelosi for not wanting to make a deal before the election, and Biden blaming Republicans for not accepting Democrats’ HEROES Act in the summer – which President Trump says “rescues poorly managed Democratic cities and states.”

Biden said that Trump brought “malarkey” (meaningless conversations) about the alleged corruption of the Biden family because the president does not want to discuss substantive issues affecting the country.

Regarding the minimum wage, President Trump said it should be a state option, while Biden insisted that the federal minimum wage should be at least $ 15 an hour.

In border security, Trump and Biden debated over the child separation policy – which Biden blamed Trump for separating the children from their parents. Trump replied, “Who built the cages?” referring to the Obama-Biden administration.

Race in America was the next topic:

Biden said his daughter, a social worker, works in African American areas, which we think makes Biden non-racist. Trump said Obama and Biden ‘never wanted criminal justice reform’.

“It’s all talk and no action,” said Trump of Biden, whom he criticized for having done “nothing in 47 years except passing the crime bill that was harmful to black Americans.”

“No one has done more for the black community than me,” said Trump, with the possible exception of Abraham Lincoln.

Biden then seemed to have a prominent moment, calling Abraham Lincoln a racist.

The debate then turned to Climate Change:

Trump discussed the “trillion tree program” after saying that he loves the environment and that the United States has incredibly low carbon emissions. He added that he did not hear Biden use the term, because he was not sure if ‘Biden knows what it means’.

Trump said that China, Russia and India are “dirty” compared to the US, and that he pulled the country out of the Paris agreement because it is not willing to sacrifice jobs because of the agreement – especially when China’s obligations do not go into action until 2030 and Russia “‘goes to a lower standard”. (because they are considered emerging economies)

Biden then stated that he never opposed hydraulic fracturing, challenging President Trump to play a tape of him saying yes. Biden said that global warming is an “existential threat” to humanity, which has a “moral obligation” to resolve it. Biden says that we have 8 to 10 years to reach the point of no return.

The last topic of the debate was leadership:

When asked what each candidate would say on the day of inauguration to the losing side, President Trump said “before the virus arrived, I was getting calls” from Democrats about the booming economy. He noted that unemployment among blacks, women and other groups was at record levels.

Trump says we have to rebuild the country to where it was before the ‘plague of China’ hit – and warned that if Biden is elected we will have a depression like we have never seen, and that ‘401 (k) will go to hell. “

Biden replied that he will be an American president who will represent all Americans – even those who did not vote for him. He expects voters to choose ‘hope and science over fiction, while dealing with systemic racism and creating millions of jobs in the clean energy sector’.

“What is in the vote is the character of the country,” said Biden.

October 22 ,2020

Bloomberg: The stimulus talks remain unfinished, it is a day for presidential debate and little improvement is expected in claims for unemployment benefits.

Not yet:

Deadlines have passed, negotiations have started and stopped and started again, and now with only 12 days to go before the election, there is still no agreement. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will have more discussions today with the aim of resolving any open questions in the deal, which White House chief of staff Mark Meadows says will total $ 1.9 trillion. The main blockade continues in the Senate, where Republicans hesitate about the size of the spending account and where there is resistance to holding a vote before the election, and even this year.

Debate:

Talking about the imminence of the election, the second presidential debate begins at 10:00 pm, Brasília time, tonight in Nashville. Both candidates will seek to improve their performance from the first spiteful presentation. In an effort to improve the quality of the 90-minute confrontation, the Presidential Debate Committee will silence the candidates’ microphones, in turn, to allow two uninterrupted minutes of speaking at the beginning of each segment of the debate. In other election news, the White House accused Iran of trying to intimidate voters.

Claims:

The average estimate of economists consulted by Bloomberg shows that weekly unemployment insurance claims will be 870,000, slightly improved from 898,000 last week. Continuous claims are expected to drop below 10 million. The data is released at a time when Fed lawmakers continue to warn that failure to agree on the stimulus is the biggest risk to the economy, in addition to the coronavirus itself. The pandemic, however, continues to reach a record number of new daily infections in Europe, while hospitalizations in the United States because of the virus have reached a maximum of two months.

Market slip:

No breakthrough in the stimulus and the growing number of Covid cases are preventing any chance of market optimism this morning. Overnight, the MSCI Asia Pacific index fell 0.6%, while Japan’s Topix index closed down 1.1%. In Europe, the Stoxx 600 Index is down 0.5% at 6:50 am, as the earnings season has so far failed to reassure investors. The S&P 500 futures pointed to a slight drop in the opening, the 10-year Treasury yield was at 0.811% and gold declined.

Arriving:

US home sales data is at 11 am, with the Kansas City Fed manufacturing at 12 noon. There are only three Fed speakers on today’s calendar. The Senate Judiciary Committee is expected to vote on Amy Coney Barrett’s confirmation to the Supreme Court, with a full Senate vote expected early next week. Southwest Airlines Co., Coca-Cola Co., AT&T Inc. and Kimberly-Clark Corp. are among the long list of companies that report profits.

Initial US unemployment insurance claims:

After the disappointing resurgence of the previous week in the initial claims for unemployment benefits, this week the number of Americans who filed for unemployment insurance for the first time dropped to 787,000 (870,000 exp) – the lowest since the blockades began. pandemic.

Continued claims were also better than expected, dropping below 9 million for the first time since March

However, not everything went smoothly – while federal / state claims dropped, the number of pandemic emergency claims skyrocketed

More than half a million additional complaints in this group in each of the past two weeks

Finally, keep in mind that California has ended its pause in processing initial claims and has resumed reporting actual unemployment insurance claims data based on its weekly claims activity. This press release reflects the actual California counts for the current week and the revisions from the previous two weeks … which meant a big drop in California.

October 21 ,2020

Bloomberg: Still talking about stimuli, the bond market is saying something, and Brexit is negotiating optimism

New Term:

House Speaker Nancy Pelosi said she hopes for a stimulus deal this week, despite her self-imposed deadline yesterday having passed without a deal. White House chief of staff Mark Meadows said that everyone is “working hard” to reach an agreement by the weekend, adding that there are still pending issues. Senate majority leader Mitch McConnell warned the Trump administration not to agree with anything like Pelosi’s proposal before the election. McConnell plans to vote for the reduced Republican package in the Senate today.

Bond Moves:

Progress on a stimulus package is helping to push the yield on 10-year US Treasury bonds to the highest level in four months, with the spread between five and 30-year bonds reaching the highest in four years. Many investors hope that a Democratic sweep of the Presidency and both houses of Congress will pave the way for more spending, raising yields and making the curve more steep. One thing that bond investors are not evaluating is a major volatility event surrounding the election, with options betting against significant moves in the weeks after the vote.

Tactics:

In Europe, negotiations between the EU and the United Kingdom over a post-Brexit trade agreement are also running out. With only 10 weeks to go before a new trade agreement is reached, EU chief negotiator Michel Barnier said that an agreement is still within reach. The view on the European side is that British Prime Minister Boris Johnson’s warnings that he would abandon negotiations were mainly for a domestic audience. Formal discussions are expected to resume in the next few days, with EU officials hoping that a deal will be struck in mid-November.

Mixed Markets:

With no major new catalysts for investors, global equities are having a mixed session as corporate earnings remain the primary focus. Overnight, the MSCI Asia Pacific index increased 0.7%, while Japan’s Topix index closed 0.7% above. In Europe, the Stoxx 600 Index was 0.7% lower at 6:50 am, with construction and real estate companies being the hardest hit. S&P 500 futures fluctuated before the opening, oil fell and gold went up.

Arriving:

United States crude oil inventories may show an increase in inventories when the data are released at 11:30 am. The Federal Reserve publishes the Beige Book at 3 pm. Five regional Fed presidents and the Fed’s vice president for oversight, Randal Quarles, speak at various events. It’s another gigantic day for earnings, with Tesla Inc., Verizon Communications Inc., Biogen Inc., Chipotle Mexican Grill Inc., Baker Hughes Co. and Abbott Laboratories among the many, many companies that report.

October 20 ,2020

Bloomberg: End of the game, for stimuli, mixed news for banks End of stimulus game, mixed news for banks, and Europe struggles to control Covid

Today:

Deadline by House Speaker Nancy Pelosi for an agreement in principle on a new stimulus package that could be approved before the election expires today. Negotiations with Treasury Secretary Steven Mnuchin are expected to continue later with neither side signaling that a deal is made. Even if there is an advance, the thorny issue of the Senate’s Republican support remains, with this group set to proceed with a vote in part on a smaller package today.

All right, profit:

Goldman Sachs Group Inc. reached a long-awaited agreement with the US Department of Justice to resolve an investigation into the bank’s role in the 1MDB scandal. Goldman will pay more than $ 2 billion to avoid a criminal conviction, according to people familiar with the matter. The agreement follows an earlier $ 2.5 billion agreement with Malaysia to withdraw fees in connection with its work in raising money for the country’s development fund. There was better news for UBS Group AG, which reported third-quarter earnings that exceeded expectations for higher transaction-based earnings.

Voltage:

European leaders are moving to impose even stricter restrictions as the Covid outbreak appears to be completely out of control in the region. Ireland and Wales have announced complete blockages, while daily cases in Germany have broken new records. In the US, battlefield states are seeing outbreaks of infections, adding another dimension to electoral calculations ahead of the election in two weeks.

Mixed markets:

The mix of minuscule hopes for a stimulus deal, strong corporate results and restrictions due to the increase in cases of the virus means that markets are being pulled in different directions. Overnight, the MSCI Asia Pacific Index fell 0.3%, while the Japanese Topix index closed 0.7% lower. In Europe, the Stoxx 600 Index was largely unchanged at 6:50 am, as investors digested a series of company results. S&P 500 futures pointed to an opening gain, the 10-year Treasury yield was 0.779% and both oil and gold were slightly higher.

October 06 ,2020

According to data released by BEA today, the US deficit rises to a maximum of 14 years

It looks like the lockdowns destroyed the US trade war plan.

The United States trade balance fell to its largest deficit since August 2006 of $ 67.1 billion.

It came worse than the expectation of US $ 66.2 billion, as total imports increased 3.2%, to US $ 239 billion, while exports increased 2.2% in relation to the previous month, to US $ 171, 9 billion.

The additional increase in imports suggests that companies responded to stronger domestic demand amid scarce stocks.

The country’s surplus in services has dropped to the lowest since 2012, with the goods deficit reaching a record low

Interestingly, the US trade balance with China improved significantly in August

This information gives us greater clarity as to why the dollar is under strong pressure in the last 2 weeks

October 05 ,2020

Service PMI from Markit and ISM show divergence in the sector

After a mixed (albeit uniformly disappointing) picture in last week’s manufacturing surveys, analysts had expected US services surveys to show further deterioration from the post-COVID recovery peak. Markit US Services: 54.6 vs 54.6 flash vs 54.6 exp vs 55.0 previous ISM US Service: 57.8 vs 56.2 exp vs 56.9 previous So, we see that in the Markit survey, PMI fell and ISM rose in September – the market “bought”!

under 

Under ISM Services numbers:

– Business activity increased to 63.0 against 62.4 in the previous month

– New orders increased to 61.5 against 56.8

– Employment increased to 51.8 against 47.9; the highest since February

– Supplier deliveries dropped to 54.9 against 60.5; the lowest level since February

  • The stock change increased to 48.8 against 45.8
  • Prices paid fell to 59.0 vs 64.2
  • The order backlog dropped to 50.1 against 56.6
  • New export orders fell to 52.6 against 55.8
  • Imports fell to 46.6 vs 50.8
  • Stock opinion increased to 55.4 against 52.5

ISM respondents were mainly optimistic:

“Business was quite stable over the summer; however, there is still a great deal of uncertainty as we move into autumn and winter [and] how our sales volume will be ”. (Agriculture, Forestry, Fishing and Hunting).

“Our industry is facing a bleak outlook, as Hollywood studios have removed almost all of their content from October and November and moved it over to next year. Along with the state health mandates that restrict our service, we expect to operate at a loss in 2020 and 2021. ”(Arts, Entertainment and Recreation).

“Service orders are improving rapidly. The lack of available labor is having a significant impact on our ability to fulfill orders. ”(Construction).

“The insurance industry will experience some impact of property damage related to weather and protests and business disruption.” (Finance and Insurance).

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

“The US economy continued to recover in September from the deep contraction seen at the height of the Covid-19 pandemic, with business activity growing in both industry and services to close the strongest quarter since the beginning of 2019.”

“Covid-19’s concerns and social detachment have continued to impact many companies, however, especially in consumer-driven sectors, where demand for services has dropped yet again. However, the business and financial services, health and housing sectors did well as the economy continued to recover, and service exports also increased as other countries continued to open their economies.”

“Encouragingly, new service orders grew at a high rate in September, putting additional pressure on operational capacity and fueling another robust increase in employment. A further increase in work delays bodes well for robust employment growth to be sustained until October.”

However, the slowdown in the Composite Index suggests that this may be as good as possible for the recovery of US economic growth

“Sentiment about the outlook for the coming year has significantly darkened, however, linked to growing concerns about the number of viruses, uncertainties about the presidential election and fears that the economy is likely to weaken, unless more support measures are taken. be implemented soon. ”

September 10 ,2020

ECB unchanged interest rates and maintenance of the pandemic emergency purchase (PEPP) at 1.35 trillion. Largarde comments on the Euro exchange rate.

(1) The interest rate on the main refinancing operations and the interest rates on the facility liquidity-providing facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50%, respectively.

The Governing Council expects the ECB’s interest rates to remain at their current levels or until the outlook for inflation converges robustly to a lower level. sufficiently close to, but less than, 2% within its projection horizon, and that convergence has been consistently reflected in the underlying dynamics of inflation.

(2) The Governing Council will continue its purchases under the Program for the Purchase of Pandemic Emergency (PEPP), with a total envelope of € 1.350 billion

These purchases help to soften the overall monetary policy stance, thereby helping offset the downward impact of the pandemic on the projected inflation path

Purchases will continue to be conducted flexibly over time, between classes of between jurisdictions.

This allows the Governing Council to effectively prevent risks to the smooth transmission of monetary policy.


The Governing Council of the ECB will make purchases of liquid assets under the PEPP until at least the end June 2021 and, in any case, until it deems that the coronavirus crisis phase finished.

The Governing Council of the ECB will reinvest payments on the principal of purchased securities under the PEPP until at least the end of 2022.

Shortly after the declaration, ECB President Christine Lagarde gave her declaration of press. Below the headlines:

LAGARDE: DATA, RESEARCH POINTS FOR STRONG 3Q GDP RECOVERY

LAGARDE: THE ECB WILL CAREFULLY ASSESS THE EURO’S EFFECT ON INFLATION

LAGARDE SAYS IT IS VERY LIKELY THAT TOTAL PEPP PACKAGE IS USED

LAGARDE: “THE ECB DISCUSSED THE APPRECIATION OF THE EURO”

LAGARDE: “THE ECB HAS NO TARGET FOR THE EXCHANGE RATE

“In the current environment of high uncertainty, the government council will assess carefully received information, including exchange rate developments ”, Lagarde told a news conference after the monetary policy decision.”

This probably means that any expectation of an impending currency war between USA and Europe can be suspended.

The euro rose to a new high on the day, reaching 1.1900, after Lagarde’s comments

The rise in the euro pushed European stocks down, while the Bunds extended falls, with the German 10-year yield rising 3 basis points to -0.44%

September 4, 2020

Another “cinematographic” job report: the Unemployment rate in the US drops unexpectedly, as payrolls exceed expectations

Amid a wide range of estimates that were either too high or too low, moments ago the BLS reported that in August, the number of payrolls was in line with consensus expectations: according to the jobs report of August, about 1,371 million payrolls were created.

But if Establishment research was strong, Domestic Research was an impression highly successful, where a whopping 3.8 million newly employed workers were discovered, with the total rising from 143.5 million to 147.3 million.

This was clearly a better than expected report (putting the whole context together), where some expected a substantial slowdown in August due to an increase in in cases of viruses in the Sunbelt states, and the recovery of the labor market for USA extended for the fourth month in August, giving hope that the economy can continue to recover – and that Trump may parade with a strong job market over the next two months – despite Washington’s standoff over more aid government for unemployed Americans and small businesses.

That said, a quarter of all job gains were thanks to government jobs (contracting the Census), so we are confident that we may encounter problems with the report. Also noteworthy, a quarter of employed people worked in August.

The change in total non-farm payroll employment for June has been revised down by 10,000, from +4,791,000 to +4,781,000, and the move to July was revised downwards by 29,000, from +1,763,000 to +1,734,000. With these reviews, the combined June and July employment was 39,000 less than reported previously (little significant change in the current context).

In the series followed by all, the number of unemployed “temporarily” surprised to drop by more than 3 million to just 6.2 million, from 9.2 million in the last month. As usual, the debate over what defines unemployment “temporary” remains in the foreground.

Did the end of the $ 600 weekly contribute to this decline?

This was offset by the number of people in the U.S. seeing job losses which increased by around half a million to 3.4 million, the lowest level high since 2013. “This points to company closings, bankruptcies and cuts in ongoing investments across the country. “, Katia Dimitrieva of BBG said.

Meanwhile, the percentage of the workforce unemployed for more than 15 weeks: jumped to 5.1%, the highest since the financial crisis.

Average hourly earnings also showed a general impression online, rising 4.7% in August, unchanged from the previous month, and above the 4.5% expected.

According to the BLS, the average hourly wage for all employees has increased by 11 cents to $ 29.47. Average hourly earnings from private sector production and unsupervised employees increased 18 cents to $ 24.81 after a reduction of 10 cents in the previous month. As the BLS notes, large fluctuations in employment in recent months – especially in industries with workers with lower wages – complicate the analysis of recent trends in average earnings per hour.

Also noteworthy is that the average workweek for all employees in private non-farm payrolls increased 0.1 hour to 34.6 hours in August. In manufacturing, the workweek increased by 0.3 hours to 40.0 hours and overtime increased 0.1 hour to 3.0 hours. The average working week for production employees and non-supervisors on non-agricultural private payrolls remained unchanged at 34.0 hours.

The labor force participation rate increased modestly, from 61.4 to 61.7, while the Civil Labor Force increased by 1 million to 160.8 million in August, while the population increased by only 200K to 260.558MM.

Where there was a surprise was the unemployment rate, which unexpectedly fell from 10.2% in July to 8.4%, breaking expectations of an impression of 9.8%. It seems that Trump wants to go to the November elections with a rate of unemployment of 7% or less.

Despite all the superlatives, we must not forget that in August, employment non-agricultural activity was below the February level of 11.5 million, or 7.6%. Analyzing the sector breakdown, public employment increased in August, as expected, reflecting temporary hires for the 2020 Census. Employment gains Notable developments have also occurred in retail trade, professional services and business, leisure and hospitality and education and health.

Some more details:

  • Government employment increased by 344,000 in August, accounting for a quarter of the monthly gain in total jobs non-agricultural. A federal government job gain (+251,000) reflected hiring 238,000 temporary workers from the 2020 Census. local government employment increased by 95,000 in the month. Overall, employment government is 831,000 below the February level.
  • Retail trade added 249,000 jobs in August, with almost half of the growth occurring in general merchandise stores (+116,000). Notable gains also occurred in automotive vehicles and parts (+22,000), electronics stores and household appliances (+21,000) and retailers in various stores (+17,000). THE retail trade employment is 655,000 less than in February.
  • Employment in professional and commercial services increased by 197,000. More than half of the gain occurred in temporary aid services (+107,000). Architectural and engineering services (+14,000), business support (+13,000) and design of computer systems and services (+13,000) also created jobs during the month. The job in professional and commercial services is 1.5 million below the level of February.
  • Leisure and hospitality employment increased by 174,000 in August, with about three quarters of the gain occurring in food and drinking places (+134,000). Despite job gains totaling 3.6 million in the last 4 months, employment in 2.5 million food and drinking places since February.
  • Employment in education and health services increased by 147,000, but it’s 1.5 million below February’s level. Employment in the area of health increased by 75,000 in the month, with gains in doctor’s offices (+27,000), dentists’ offices (+22,000), hospitals (+14,000) and home health services (+12,000). Elsewhere in the healthcare field, job losses continued in wards and care facilities residential (-14,000). Employment in private education increased by 57,000 in month.
  • Transport and storage employment grew by 78,000 in August, with gains in warehousing and storage (+34,000), transit and ground transportation of passengers (+11,000) and transport by truck (+10,000). Transport and storage employment has fallen by 381,000 since February.
  • The other service industry added 74,000 jobs in August, reflecting gains in associations and organizations (+31,000), repairs and maintenance (+29,000) and personal and laundry services (+14,000). THE employment in other services is 531,000 less than in February.
  • Financial activities created 36,000 jobs in August, with the most of the growth in real estate and rent and leasing (+23,000). THE employment in financial activities has fallen by 191,000 since February.
  • Employment in industry increased by 29,000, with gains concentrated in the non-durable goods component (+27,000). Despite gains in recent months, employment in industry is 720,000 below the February level.
  • Employment in wholesale trade increased by 14,000 in August, reflecting an increase of 9,000 in the non-durable goods component. THE wholesale trade employment has decreased by 328,000 since February.
  • Employment has changed little in mining, construction and information.

The end result, like Tony Bedikian, head of global markets at Citizens Bank, summed up: “We are still in the right direction and the pace of job recovery seems to have accelerated, but it still looks like it will take a while and probably a vaccine before we get back close to where we were earlier this year. We continue optimists that the economy has turned and that we will continue to see progress constant. “

September 3, 2020

ISM service research weakens in August on in the midst of a “highly uncertain path ahead”

After US manufacturing soft surveys showed more progress in “V-shaped” recovery, today’s data from the US Services should confirm this recovery.

  • Markit US Manufacturing PMI: 53.1 – best search since January 2019.
  • ISM US Manufacturing: 56.0 – best survey since November 2018.
  • Markit US Services PMI: 55.0 (vs 54.7 exp) – best search since March 2019.
  • ISM US Services: 56.9 (vs 57.0 exp) – below the 58.1 of July.

And now? ISM falling, Markit rising.

Markit Services data increased from the flash print of 54.8, as both Markit measures (Services and Composite) increased while data US macro in general “slipped” …

In the sub-indices of ISM Services, we saw a noticeable weakening in the new orders and activities.

Adding all this up, the US composite index posted 54.6 in August, down from 50.3 in the beginning of the third quarter, to signal a strong recovery in activity business.

Sentiment about production in the next year, however, fell slightly in in relation to the 15-month high in July. The uncertainty surrounding the future impact of pandemic in the economy continued to weigh on manufacturers’ confidence, contrasting with the improvement of optimism among service providers.

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

“The increase in the entry of new businesses helped to boost the activity of the services sector in August, with the sector growing at its fastest rate in almost a year and a half. Companies often struggled to meet demand and, despite hiring extra staff at a pace not seen for more than six years, pending incomplete work has accumulated at a rate higher than anything recorded since 2009. The increase in backlogs of work bodes well for robust production growth must persist in September.”

“Combined with the stronger picture emerging from manufacturing in August, the better performance of the vast service sector adds signs that the third quarter will see an impressive recovery in the economy from the collapse seen in the second quarter.”

However, Williamson also notes that the survey also highlights how the recovery is very uneven and the recovery path remains highly uncertain:

“August growth was driven by financial services and as well as by technology companies, but the sectors focused on consumer, such as travel, tourism and recreation, remained in decline due to the need for continuous social detachment.”

“Companies across the board are also still concerned about the resurgence of virus infections and the durability of demand in the coming years months after the initial recovery potentially weakens, with uncertainty on the presidential election adding more risks to the prospects for many companies.”

So something there for everyone – good news (but not enough to justify any Fed retracement), bad news (but not enough to justify any buyback stonks) … it all depends on which side of the boat you are on.

September 2, 2020

US manufacturing storms ahead: ISM exceeds expectations while new orders reach a maximum of 16 years.

After further recoveries in soft manufacturing survey data in Europe and Asia (and Latin America – the Brazilian Manufacturing PMI exploded to a record high in July), ISM and Markit measures on US manufacturing sentiment should continue their V-shaped recovery, and they did just that, when Markit PMI first printed at 53.1, the highest level since January 2019, followed by ISM Manufacturing, which broke expectations by printing at 56, 0, the highest level since November 2018.

As with last month, the increase in ISM was driven largely by New Orders, which shot up from 61.5 to 67.6, the highest level since January 2004, and while employment continued to rise, from 44.3 for 46.4, it remains in contraction territory.

Looking through the data, virtually all ISM components have improved, with the exception of inventories that have dropped for producers and customers, a sign that “destocking” is taking place and that it is actually optimistic for even more future demand.

At ISM, President Timothy Fiore said that “The August PMI registered 56 percent, 1.8 percentage points above the July reading of 54.2 percent. This figure indicates expansion in the general economy for the fourth consecutive month, after a contraction in April, which ended a period of 131 consecutive months of growth. The New Orders index registered 67.6 percent, an increase of 6.1 percentage points from the July reading of 61.5 percent. Production registered 63.3 percent, an increase of 1.2 percentage points compared to the July reading of 62.1 percent The backlog index recorded 54.6 percent, an increase of 2.8 percentage points compared to the July reading of 51.8 percent.The Employment Index registered 46.4 percent, an increase of 2.1 percentage points from the July reading of 44.3 percent. Supplier Deliveries registered 58.2 percent, 2.4 percentage points above the July figure of 55.8 porcent.

And while the Fed is desperate to raise average inflation, the ISM confirmed that, at the commodity level, just about everything was more expensive:

At ISM, President Timothy Fiore said that “The August PMI registered 56 percent, 1.8 percentage points above the July reading of 54.2 percent. This figure indicates expansion in the general economy for the fourth consecutive month, after a contraction in April, which ended a period of 131 consecutive months of growth. The New Orders index registered 67.6 percent, an increase of 6.1 percentage points from the July reading of 61.5 percent. Production recorded 63.3 percent, an increase of 1.2 percentage points compared to the July reading of 62.1 percent The backlog index recorded 54.6 percent, an increase of 2.8 percentage points compared to the July reading of 51.8 percent.The Employment Index registered 46.4 percent, an increase of 2.1 percentage points from the July reading of 44.3 percent. Supplier Deliveries registered 58.2 percent, 2.4 percentage points above the July figure of 55.8 po r cent. And while the Fed is desperate to raise average inflation, the ISM confirmed that, at the commodity level, practically everything was more expensive: Meanwhile, unlike last month, when the Markit PMI failed unexpectedly, this time there was convergence between the two series, with Markit noting that the strongest manufacturing PMI since January 2019 “was supported by stronger growth in new orders, as exports increased at the fastest pace for four years.”

ISM respondents were mixed, although optimism about the future seemed to prevail (except for airlines), although some expressed concerns about the ongoing hidden crisis, while others noted that some weakness is beginning to emerge:

  • “Looking at COVID-19 situations in Mexico, Brazil, Philippines [and] Hong Kong. High COVID-19 outbreak rates. Supply lines are no longer affected by events related to COVID-19 today.” (Computer and electronic products).
  • “Business is very good. Production cannot keep up with demand. Some upstream supply chains are starting to have problems with raw materials and / or transportation availability.” (Chemicals).
  • “The aviation industry remains under great pressure.” (Transport equipment).
  • “Current sales to domestic markets are substantially stronger than expected. We expected a recession, but it was not so. Retail markets and commercial customers are very strong and creating a shortage of raw material suppliers, increasing orders from customers. Providers.” (Manufactured metal products).
  • “The construction companies’ business remains robust, with month-on-month gains continuing since May. Business remains favorable and will only be retained by supply problems across the industry.” (Wood products).
  • “We are seeing a solid improvement in orders month by month in all manufacturing sectors, such as electrical, automotive and industrial goods. Looking to add some factory operators.” (Plastics and rubber products).
  • “Forecasts of continuous production are increasing every week compared to the previous forecast.” (Primary Metals).
  • “[Increasing production] has been a struggle. We started and stopped lines several times in all 18 of our factories due to problems with COVID-19. Surprisingly, our direct suppliers did an excellent job in shipping ingredients and packaging in Time.” (Food, beverages and tobacco products).
  • “Strong demand from existing and new customers for our products, stable or decreasing input costs for our operations and record numbers of new business opportunities for potential customer reconditioning measures. All trends have continued since the first quarter of the fiscal year of 2017. ” (Electrical equipment, appliances and components).
  • “New capital equipment orders have decreased again. Quotations are active. Many customers are waiting for the fourth quarter to make any commitment.” (Machinery).
  • We are starting to see parts of our business recovering in August, while other parts have remained weak. Part of our export business has returned for the first time since COVID-19 began; however, domestic portfolios remain mixed.” (Paper products).

About PMI, Chris Williamson, chief business economist at IHS Markit notes, made an interesting observation: while new export orders have increased;

“new orders and export sales from smaller manufacturers have continued to fall, highlighting an unbalanced recovery in for larger companies.”

“The recovery of the industrial sector gained more ground in August, adding indications that the third quarter should have a strong recovery in production in relation to the sharp decline suffered in the second quarter.”

“It is encouraging that the flow of new orders has improved significantly, overtaking production and leaving many companies struggling to produce enough goods to meet demand, often due to a lack of operational capacity. As a result, backlogs for incomplete work have increased at the fastest rate since the first months of 2019, encouraging an increasing number of companies to hire more employees.”

“The key to recovery was a jump in new export orders, which increased at the fastest rate in four years, reflecting improved demand in many foreign markets and benefiting larger companies in particular. Unfortunately, new orders and export sales from smaller manufacturers continued to fall, highlighting an unbalanced recovery in favor of larger companies.

Overall, a strong report for the month of August, which could end up being a problem for the economy in general, as it eliminates the need for urgent Congressional intervention to restart fiscal spending that expired on July 31.

September 1, 2020

Change in the monetary policy of the FED. What happens now?

Today during the Jackson Hole virtual symposium, the president of the central bank of the United States of America, Jerome Powell, made a major change in his monetary policy related to the central bank’s stance towards inflation..

The bond, currency, gold and stock indices markets swung strongly

The general context that explains this strong activity is inflation. We will talk here in this article about several approaches, analyzing today’s FED decision.

Decision:

Discussions to unpin the 2% inflation target had been going on since 2019 and today have become reality. The FED now it works with an average inflation rate of around 2%. In addition, Powell communicated to the market that low interest rates will continue for quite some time and that a policy strategy review monetary policy will happen ‘approximately’ every five years. Powell called the changes “an update robust ”.

After these statements (even though the FED “warned in advance”) the markets balance, driven mainly by bond sales.

But first of all, we need to understand the reasons for such changes and how they will impact in inflation.

By allowing inflation to exceed the 2% limit (and to work above that), the Fed sends an important message: that it will accept higher inflation (and consequently a possible devaluation of its currency) in exchange for creating more jobs, keeping interest rates at current levels for the next few years:

“The Fed will be highly focused on promoting a strong labor market,” said Powell. “Some sectors of economies that are more sensitive to coronavirus outages, were more affected. However, if we can keep the virus transmission rate low, we can recover these sectors in a few years ”, he concluded.

The announcement comes at a time when the U.S. features:

  • Unemployment Rate above 2 digits (10.20%):
  • and GDP at the lowest historical level (since it started to be registered), at -31.7% (in the 2nd quarter / 20):

Analyzing the past:

In 2017 and 2018, the arguments for a monetary policy conducted primarily by the former Fed chairman, Janet Yellen, and then Powell, were inflation above the 2% target and the strong labor market, with unemployment rates at historic lows. This “combination” was responsible for the “rate hikes”, which took away the interest rate – after a long period of 7 years – stagnated between the range of 0% and 0.50%, to 2.5% per year.

USA inflation rate

USA unemployment rate

So now, when the Fed tells the market that the 2% target is not the worst problem and that, in fact, the focus now is on job recovery, we have some problems to take into account.

According to Joseph Carson, former chief economist at AllianceBernstein, this new policy of “average” inflation in Federal Reserve is a big mistake. The compromise today is between inflation and financial stability. Buying more inflation will, if not yet, create financial imbalances that will trigger an economic collapse. A parallel to these measures are the wrong monetary policies of the 1970’s. At that time, lawmakers found that buying more jobs with a little more inflation it worked.

Powell’s argument for policy change is that consumer inflation has been consistently below your 2% target. According to Carson, low and sustained inflation readings may, over time, lower inflation expectations, which can create “inflation and lower and lower inflation expectations”. The Current evidence does not support these arguments.

The Federal Government’s statistical branches publish two measures of consumer price inflation. The Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI) and the Bureau of Economic Analysis (BEA) publishes Personal Consumption Expenses (PCE).

In the past 4 years, the central CPI has been above the Fed’s 2% target. The only year out of the last 5 in which the CPI was below 2% in 2017, when it reached 1.8%. This small deficit is not statistically significant and certainly does not justify a fundamental change in policy.

In addition, Powell’s argument that “low reported inflation is undermining inflation expectations consumer ”is not supported by the facts. Consumer inflation expectations from the University of Michigan sentiment (UMich Consumer Sentiment) shows that inflation expectations of people have consistently exceeded reported inflation and the 2% target.

In the past two decades, the only time consumer inflation expectations have dropped below 2% has been during 9/11 and the Great Financial Crisis of 2008. And each drop in expectations was short-lived time. Consumer inflation expectations are currently at 3%.

In addition, actual CPI inflation is currently below 2% because these measures ignore the real estate prices, employers’ costs of health, education and stock market bubbles.

The Federal Reserve has three main charges: maximum employment, price stability and stability financial. Financial stability is often overlooked or ignored. The last two recessions were triggered not by very high or very low inflation, but by real and financial asset price very high. Current asset macro-valuations now exceed the upper limits of the last two bubbles asset.

Changes in monetary policy often have unintended consequences. Trying to “buy” more inflation is a mistake, according to Carson.

“It is a policy error because real inflation is above the target. But the biggest problem is that the new policy will trigger more speculation and risks in finance at a time when the values of assets are already at bloody levels. ”

“The wrong policies of the 1970s ended in an economic meltdown. Will it be different this time? I have my doubts. This is because the exuberance in finance or the economy creates imbalances that correct naturally. The big difference today compared to the 1970s is that the United States has no political defenses – with official rates at zero and budget deficits in the trillions – to cushion the fall.”

In conclusion, there is no economic benefit from increasing inflation, but there are winners and losers.The winners are those who have first access to money, namely banks and the already wealthy.

The FED complains about income and wealth inequality, but they are the main source.

BIS did a historical study and found that routine price deflation was no problem at all.“Deflation can even boost production. Lower prices increase real income and wealth. And also can make export products more competitive, ”says the study.

It is the deflation of the asset bubble that is harmful. When asset bubbles burst, the result is deflation of debt.

It is the deflation of the asset bubble that is harmful. When asset bubbles burst, the result is deflation of debt.

“The problem is not deflation, it is the Fed’s mistaken attempts to avoid it.”

Bonds and the dollar

Perhaps we have seen today one of the financial imbalances that Carson mentioned, in the bond market (in which the movements of yields consecutively end up pulling the dollar).

Inflation has a very negative impact on fixed income assets when it results in lower interest rates tall. Central banks usually raise interest rates when inflation starts to cross the threshold wanted. As interest payments on existing fixed income assets become less competitive in terms of In relation to new higher-rate fixed income instruments (new issues), bond prices normally fall. In other words, there is an inverse relationship between interest rates and asset prices.
fixed income. High inflation can also hurt returns on strategies that rely on payments fixed.

Now, how to explain a selloff on these bonds today (and the yields increase) when the Fed says it will keep rates unchanged for years to come?

This is the divergence. Several times we have seen the Fed’s forecasts fail and interest rate changes happen for reasons of “fighting inflation”.

When the Fed brings a new strategy to play, buying purposefully more inflation with accommodative policy for long periods, we have this distrust of the market, that large levels of inflation are coming in the future. With the stock market renewing historic maxims day after day (mainly resulting from stimulus policies), why keep capital in bonds whose yields are will depreciate more and more with inflation?

This scenario forces investors to reallocate their exposure to the dollar, which in the short term benefits from higher yields and a falling differential, but in the medium / long term, it may come to have a great devaluation as inflation starts knocking on the door.

August 27, 2020

Record drop in American GDP contracting 31.7% in the second quarter.

A month after the worst GDP impression in US history revealed that in the 2nd quarter the US economy contracted by -32.9%, moments ago the BEA revealed in its first GDP review that the slowdown was only modestly better than than expected, reaching -31.7%, exceeding the expectations of a number of -32.5%.

Remembering, BEA publishes GDP numbers once a month and makes a preliminary review before the closing announcement (in the 3rd month). The closing (final number) will be released next month.

The decrease in real GDP reflected decreases in consumer spending, exports, business investment, investment in inventory and investment in housing that were partially offset by an increase in government spending. Imports, a subtraction in the calculation of GDP, decreased.

The decrease in consumption expenditure reflected the decrease in spending on services (with emphasis on health care) and goods (with emphasis on clothing and footwear). The drop in exports mainly reflected a drop in goods (led by capital goods). The decrease in business investment mainly reflected a decrease in equipment (led by transportation equipment). The decrease in investment in inventory mainly reflected a decrease in retail (led by motor vehicle dealers). The decrease in residential investment mainly reflected a decrease in new single-family homes. The increase in government spending reflected an increase in federal spending related to payments made to banks to process and manage loan applications under the Payment Protection Program.

Looking at the 1.2% improvement in the GDP estimate compared to the original print, it was the result of an increase in government spending that reflected an increase in federal spending related to payments made to banks for processing and managing loan applications from the Payroll Protection Program.

Some Details:

  • The decline in personal consumption was revised upward from -25.05% to -24.76%.
  • The drop in fixed investment was revised from -5.38% to -5.20%; Non-residential fixed investment, that is, expenses with equipment, structures and intellectual property fell 26% in 2Q.
  • Drop in the variation of private stocks was revised from -3.98% to -3.46%.
  • The increase in net trade was revised from 0.68% to 0.90%.
  • Government contribution was unchanged at 0.82%.

For those who are maintaining the inflation table, the GDP price index fell 2% in the 2Q after rising 1.4% in the previous quarter; core PCE q / t fell -1% in the 2Q after an increase of 1.6% in the previous quarter.

In the first analysis of corporate profits, BEA estimates that profits from current production decreased by 11.1% at a quarterly rate. In the second quarter, after decreasing 12.0% in the first quarter. Corporate profits decreased 20.1% in the second quarter compared to the previous year.

Domestic non-financial corporations’ profits decreased 15% after decreasing 14.4%. Domestic financial companies’ profits increased 9.2% after decreasing 8.9%. Profits in the rest of the world decreased by 20.3% after decreasing by 8.4%.

The general, although still historical, the number GDP was widely expected within a margin of error, and the question is even how much GDP recovered in the third quarter, whose first analysis we will have a few days before the presidential elections on November 3rd.

August 26,2020

US durable goods orders break expectations in July thanks to the ‘war’

After its initial peak in May, the recovery of durable goods orders has slowed and the ‘V’ deceleration was expected to continue in preliminary July data today, but instead we saw a resurgence, rising 11.2% MoM (well above expectations of 4.7%).

Compared to the previous year, orders for durable goods continue to decline 5.0%, but the “V” is filling up quickly.

The headline was driven by an increase in orders from the defense sector and the continuous resumption of demand for automobiles.

In addition, the main orders for capital goods, a category that excludes aircraft and military equipment and is seen as a barometer of investment business, increased 1.9%, slightly more than expected.