E-mini S&P 500 Futures (September): Settled at 4482.50, up 7.00
E-mini Nasdaq-100 Futures (September): Settled at 15,355.50, up 51.00
U.S. benchmarks are clinging to elevated levels maintained through a quiet but buoyant session yesterday. President Biden’s spending plans gathered steam in the House late yesterday after Democrats came together to approve a blueprint for the $3.5 trillion budget and half-trillion infrastructure bill.
Treasuries have traded lower on the news and in anticipation of the added supply via today’s $61 billion in 5-Year Notes being auctioned. In our opinion, this could just be a start. However, this massive budget is geared towards social programs and ignores the debt ceiling. Democrats plan to pass it via the reconciliation process, leaving Republicans bitter.
The August recess overshadows the end of the week and Congress isn’t expected to return until mid-September. With commitments due October 1st hanging in the balance and House Speaker Pelosi’s hopes of passing the budget plan by September 27th, this leaves a large agenda to complete in a very short period. As we’ve previously noted, in case the debt ceiling gets amended, we’re set to see tremendous Treasury supply hit the market in the coming months; $698 billion in Treasury issuance is earmarked for the remainder of Q3 and an additional $703 billion in net issuance through Q4.
Jackson Hole kicks off Friday with Fed Chair Jerome Powell’s highly anticipated speech. Today, Durable Goods Orders came in better than expected. Tomorrow, we look to Minutes from the ECB’s most recent meeting, the Fed’s preferred inflation indicator, the second look at Q2 GDP, and weekly Jobless Claims.
On the earnings front, we look forward to Salesforce after the bell. It's one of Blue Line Capital’s largest single holdings and Bill Baruch spoke with CNBC about it on Monday.
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