A Deluge of Fed Speak

Fed's Williams, Brainard, and Kashkari speak
Fed Chair Powell testifies this morning
China passed the Hong Kong National Security Law
Stock Market Update for Traders

Stock Market Update for Traders

Monday's Close

E-mini S&P 500 Futures (September): Settled at 3047.75, up 40.75

E-mini Nasdaq-100 Futures (September):  Settled at 9973.75, up 108.25

The week heats up. Last night, China passed the Hong Kong National Security Law and the U.S. responded by removing the region’s special status. The legislation comes in part as a response to the city’s pro-democracy battles, but also as China tightens its grip on the region. More than anything else, it is important to understand China wants power and world domination, they are exerting many strategic influences on Asia broadly and the world; some we may see clear, like this legislation, and others go largely under the radar to the general public. The U.S.-China trade war, though uncomfortable, is agreed across political ideologies as a necessary step to rein in this growing superpower and overall reduce the U.S.’s dependence on the communist nation. With this legislation’s highest punishment being life in prison, it’s proof that China will lie, cheat, and steal to get what they want. 

The news also comes as Manufacturing PMI from China last night beat expectations at 50.9. Remember though, this 4th marginal monthly expansion in a row is from the record low of 35.7. Still, it’s clear the economic data from China and around the world is improving from lockdown, zero demand conditions.

From the U.S. today, we had the Case Shiller Home Price Indicies at 8:00 a.m. CT. This comes on the heels of a massive recovery in Pending Home Sales yesterday at +44.3% MoM. Again, this was after dropping 21.8% in April. Conference Board Consumer Confidence from June was out 9:00 a.m. CT and improved from May.

Today also brings a deluge of Fed speak. NY Fed President Williams Is at 10:00 a.m. CT, Fed Governor Brainard follows at 10:05 and Minneapolis Fed President Kashkari speaks at 1:00 p.m. CT. All are 2020 voters, but none will be more important than Fed Chair Powell and U.S. Treasury Secretary Mnuchin who testify before the House Financial Services Committee at 11:30 am CT and address the drastic stimulus measures used to keep the economy afloat during the pandemic and the path of the U.S. economy. Speaking of measures, yesterday the Federal Reserve’s corporate debt window provided a tailwind for the late rally in risk-assets.

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