It's All About the Stimulus

October 1, 2020 07:56 AM
Potential fiscal measures and bullish tailwinds
Jobless Claims this morning and NFP tomorrow
Goldman plans job cuts
Stock Market Update for Traders

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Wednesday's Close

E-mini S&P 500 (December): Settled at 3352, up 18.25

E-mini Nasdaq-100 (December): Settled at 11,407.25, up 69.50

Hopes of fresh fiscal measures out of Washington have brought a bullish tailwind to U.S. benchmarks. Despite lower price action after the presidential debate, House Speaker Nancy Pelosi renewed a glimmer of hope early yesterday ahead of a self-imposed deadline tomorrow. Mixed reviews of a meeting between U.S. Treasury Secretary Mnuchin and Pelosi yesterday jockeyed the tape upon the quarter-end close. Senate Majority Leader McConnell didn’t help adding that, “It’s safe to say the two sides are far apart.” The House postponed their vote on a $2.2 trillion Covid-19 aid bill set for today as the White House increased its counterproposal to more than $1.5 trillion. With the two sides converging, the market wants to believe a deal will get done.

Jobs are in focus with Nonfarm Payrolls tomorrow and Jobless Claims this morning. Both American Airlines and United Airlines plan to cut a combined 32,000 jobs. However, they are willing to hold back if Washington can come together and bring support to the airlines within a new fiscal package. Goldman Sachs is also in the news adding to planned job cuts. This comes on the heels of Disney and Shell yesterday. 

Elsewhere on the economic calendar, we look to the Core PCE Index at 7:30 a.m. CT. The Fed’s preferred inflation indicator is accompanied by Personal Spending and Income data. The final September Manufacturing PMI is due at 8:45 a.m. CT and the more closely watched ISM Manufacturing follows at 9:00 a.m. CT. Philadelphia Fed President Patrick Harker speaks at 8:30 a.m. CT, New York Fed President John Williams follows at 10:00 a.m. CT, and San Francisco Fed President MichelleBowman is at 2:00 p.m. CT.

Traders should also continue to keep a pulse on comments out of Europe on Brexit, central bank policy, its relief fund and currency fluctuations; European Central Bank Executive Board Member Phlllip Lane speaks at 10:45 a.m. CT. 

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