Another stock stock record looks a high order for Tuesday, with futures leaning lower after stimulus expectations and the rise in the price of oil that sent equities earlier in the week.
While the momentum has slowed somewhat, this largely unstoppable market tends to let little get in the way of new highs. So, a break to cool off?
As for what could derail the stock market, ours call of the day hand in hand with global equity strategist Andrew Garthwaite and a Credit Suisse team, it offers a shortlist of red and yellow flags.
“We have kept up with overweight stocks thanks to a highly supportive policy, a high ERP [equity risk premium], the start of a stock exchange swap and huge excess liquidity, while tactical indicators are yet to send a sell signal, ”strategists say.
For example, right now they are not too worried about the “exuberance” of the market, as they say retail flows are off and there is little systemic risk or sell signals of other indicators.
Regarding your concerns:
-
Disappointing growth in Europe: medium risk and increase. It is worrying a slow deployment of the COVID-19 vaccine and fiscal plans and a fiscal policy that seem less generous than the first time. Unlike the United States, European banks are currently granting corporate loans and bankruptcies are being suppressed through moratoriums. “We see it as a problem of European equity, not global equity, with European GDP [gross domestic product] being 16% of world GDP, although a tactically stronger USD could be a consequence, ”the team says.
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Less depleted Federal Reserve: high risk in the second half of 2021. This lies amid the potential for stronger U.S. growth amid simpler fiscal policy, accumulated pandemic demand, and economic reopening. “If this happens at a time when inflation is up 2.5%, wage growth is higher than expected and there are concerns about asset bubbles, the Fed could become less obvious,” Garthwaite and the team. Also watch for 10-year Treasury yields TMUBMUSD10Y,
1.155%
above 1.7% or with a sharp increase in yields on TIPS (Treasury inflation-protected securities), they say. -
China slowdown: low to medium risk. The latest tightening of policy is nothing to work on too much, but China’s current account could deteriorate further as the world economy reopens. Watch for real estate market indicators, some of which point to a sharp slowdown. If that happens, “excess leverage would start to fall apart,” Credit Suisse says.
Elsewhere: “We see the possibility of vaccines not working against low-risk mutations, especially because modifications can be implemented in 3-6 months. Other low-risk events include fiscal stagnation in the U.S. Senate and policy errors (with the exceptions of UK fiscal policy and French development, which we see as a higher risk), ”the team says.
Read: The stock market is echoing 2009-10, which means a setback could approach, analysts warn
The markets
ES00 stock futures,
YM00,
NQ00,
are modestly lower, with European equity SXXP,
in red. Asian markets rose after the record session on Wall Street. Brent Oil BRNJ21,
it’s busting fresh highs above $ 61 a barrel.
Bitcoin BTCUSD,
continued to climb, hitting $ 48,000 at one point, after electric car maker Tesla TSLA,
revealed a $ 1.5 billion investment in the cryptocurrency and indicated it would accept bitcoin as future payments.
The tweet
Meanwhile, apparently, Tesla has not been as generous with employee retirement plans.
The buzz
Canadian cannabis company Canopy CGC,
reported a larger-than-expected loss, but revenues exceeded estimates and stocks are rising. Materials and Chemicals Giant DuPont DD,
reported higher-than-expected earnings and sales. Twitter TWTR social media messaging service,
(see preview) and the Cisco CSCO technology conglomerate,
will report after closing.
Democrats unveiled Monday their plan to raise more incentive money for families, raising the current children’s tax credit from $ 1,000 a year to $ 3,000 and slightly higher for families with more children. small.
The parents of a Robinhood trader who committed suicide in the face of a massive negative balance sued the runner online for unjustified death.
A small business confidence index shows that optimism has been the lowest since the pandemic began last spring. There are also job opportunities.
The World Health Organization says COVID-19 probably jumped from an animal to a human and not from a Chinese lab.
Expeditionary trial of former President Donald Trump begins Tuesday.
Random readings
Free ice cream and Russian vaccine shots COVID-19? Another prediction from “The Simpsons” comes true.
A Redditor asks how everyone is doing with pandemic depression, exhaustion, and fatigue; he receives more than 3,000 mostly miserable responses.
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