The holiday abbreviated week should be quiet amid the pandemic and more restrictive lockdowns. While economic growth has slowed, risks of a double-dip recession have declined measurably now that vaccines are realities. Wall Street is ending the year on better footing than was expected in the spring thanks to a massive fiscal and monetary stimulus that helped limit the damage from the shuttering of the globe. Treasury yields have also been on the rise although the FOMC is committed to maintaining an accommodative stance for years to come. (Excerpt from Advisor Market Report – Click For Free Trial)
We remain very bullish for US equities as a whole and as we head into the holidays for the above-mentioned reasons. The S&P 500 chart above continues to show a strong bull trend. There is still a substantial risk of a market dip is retail sales show bad numbers along with unemployment. The dip will most likely be less than 5% and bounce back on because of Congress’s willingness to take action.
- Vaccine rollouts provide optimism for 2021 after a tough 2020
- Christmas holidays to shutter most of the globe into the weekend
- Brexit going down to the wire; U.S. stimulus negotiations continue
- U.S. data on consumer confidence, home sales, durable orders, jobless claims
- Canada October and Q3 GDP reports awaited, along with building permits
- Japan services PPI, Tokyo CPI, unemployment data slated
- Thailand’s BoT expected to maintain an unchanged 0.50% policy rate
- Eurozone and German consumer confidence likely hit by virus and lockdowns
There are plenty of data reports on this week’s condensed calendar though none will change the outlook as we look toward 2021. Thursday is a shortened session in the markets ahead of the Christmas holiday Friday. The government will also be closed on Thursday and Friday. The focus will be on Washington in hopes that a relief bill soon will be passed.
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The data slate has just the November Chicago Fed national activity index. The Treasury will auction $24.0 bln of reopened 20-year bonds. For Fedspeak, Brainard is on deck. It will be a very crowded Tuesday and Wednesday, however, with the calendar condensed by the holidays. Also on tap this week are consumer confidence, home sales, durable orders, income, consumption, revised GDP, and jobless claims.