Monday's Market Minute: Clock Is Ticking On Stimulus

This week the focus will shift from retailers reporting earnings to coronavirus vaccine rollout, economic data, and central bank activity. The week begins kind of slow for us here in the U.S. in terms of numbers scheduled for release, but things pick up at a rapid rate starting Tuesday. Keep an eye on Import and Export Prices, Industrial Production, Retail Sales, Jobless Claims, and we have some housing numbers due out this week as well.

In addition to the numbers mentioned, we also have central bankers meeting this week; the BOE, the BOJ, and the FOMC all are expected to leave rates unchanged and at historic lows, but we could hear about tweaks to bond-buying programs – central bank rate decisions always have potential to move markets. With indices at or near all-time highs and holidays headed our way, keep an eye on the U.S. dollar. I say that for a couple reasons.

One, we have ongoing Brexit negotiations which could bring some volatility into currency markets this week and into the end of the year. Two, the weaker dollar has been supportive of the bid we’ve been seeing in the indices, and while rates inched up a bit last week – the TNX back to near 1% -- the U.S. dollar at multi-year lows is still signaling rates are expected to remain lower for longer.

Keep in mind it’s not just the indices that a weak dollar supports, you also have copper and crude oil on the move higher, helped by dollar weakness. Last but not least, stimulus headline news could move markets as well. Investors have long been waiting for lawmakers to come together to provide stimulus, and with Congress breaking for the holidays, this week seems to be critical: the clock is ticking.

Photo by Louis Velazquez on Unsplash