E-mini S&P 500 Futures (September): Settled at 4282, up 1.50
E-mini Nasdaq-100 Futures (September): Settled at 14,563, up 50.50
The S&P and Nasdaq are holding at record highs as we head into the data-heavy latter half of the week. At the onset, we noted that a quiet news flow will allow the Delta variant to dominate headlines. This came as the White House began making a push to reach their July 4th vaccination goal, and fewer people are seeking to be vaccinated.
This narrative shook the reopening trade. Travel stocks, Financials, Industrials, and Energy have all suffered. However, we see the potential for a strong rebound in these sectors upon steady to slightly better economic data heading into the July 4th holiday. Not only is July a seasonally favorable month for stocks, but Goldilocks economic growth should bring a tailwind to risk assets.
Last night, Chinese Manufacturing PMI for June was a tenth better than expected at 50.9 versus 50.8, but it did expand at a slower pace than May’s 51.0. Today brings the first look at June jobs. The private ADP survey printed a firm 692,000 jobs added in June, versus expectations of 600,000. Analysts are looking for 700,000 on Friday’s report.
Overall, we continue to hold a belief that managers and traders must manage the risk of either hot jobs or inflation data in fear that it would speed up the Federal Reserve’s timeline to tapering. Therefore, if data is firm but contained, it should bring a green light to risk assets. With all of that said, today is the last day of the month and such can bring wonky price action.
Chicago PMI came due at 8:45 a.m. CT, Pending Home Sales is due at 9:00 a.m. CT, and EIA Inventory data at 9:30 a.m. CT. Philadelphia Fed President Harker, a 2023 voter, speaks at noon CT. The Caixin China Manufacturing PMI is due tonight at 8:45 p.m. CT. Tomorrow, we look to ISM Manufacturing and Friday, of course, brings Nonfarm Payroll.
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