Clarity for Investors will soon be here. The economic Calendar this week will focus on BLS data on Fridayy and the ADP private payrolls on Wednesday. ISM manufacturing and ISM services will lead off this week.
There is one other piece of news that we are all waiting to see. The Election Results. Remember that everything you are hearing in the news and read on a blog these days offers a prediction. I prefer to look at data-based research and not look at what pundits are saying. (though it is hard). Stories during this time are easy to write to get headlines but offer very little evidence on what is going on.
Facts that were revealed last week.
- Durable goods orders for September increased 1.9% beating expectations of 0.7% and August’s 0.4%.
- Personal income for September increased 0.9%, beating expectations of 0.3% and trouncing the prior decline of 2.5%.
- Personal spending increased 1.4% beating expectations for a 1% gain. 1% was also the August gain.
- Consumer confidence was slightly higher on the Michigan survey and slightly lower on the Conference Board version.
- Earnings results are setting records versus expectations. (FactSet). Forward earnings estimate also show strength. (Brian Gilmartin).
- A fiscal stimulus compromisewas not achieved.
- Coronavirus caseshave increased throughout the U.S. The rise is dramatic in some states and in parts of Europe, where lockdowns are either contemplated or already in place.
- Good earnings combined with a non-committal outlookhas not been a winning combination for stocks that have reported earnings.
Happy Monday. Good Luck out there this week.
Global Spotlight
The Nov. 3 U.S. election. No matter the outcome, the vote will have a significant impact on future U.S. foreign and domestic policy. Although former Vice President Joe Biden has a significant lead in polls, U.S. President Donald Trump still has a chance to return for a second term.
Moldovan presidential elections. The Nov. 1 vote will likely lead to a second round on Nov. 15 between the incumbent President Igor Dodon and the most popular opposition candidate, Maia Sandu.
Indian Prime Minister Narendra Modi and the Bharatiya Janata Party face their first electoral test since COVID-19 broke out. Bihar state elections began Oct. 28; voting also occurs Nov. 3 and Nov. 7.
The Algerian referendum on 73 proposed adjustments to its constitution. Achieving enough voter participation to give the plebiscite, and the relatively new government holding it, legitimacy is a key goal of President Abdelmajid Tebboune’s administration.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calen
dar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last week’s numbers here.
Here is the Jill Mislinski’s chart of the market week. Her approach combines several key variables in a single readable format.
Juan Luque provides us with some words of wisdom from the Incline trading desk:
The S&P 500 Index was down 5.64% this week with all sectors in the red. The increase in Coronavirus infections in the U.S. and in the world is affecting how investors feel about economic recovery and future performance of companies. The long-term trends remain with the same protagonists–Industrials in the leading quadrant, Consumer Staples, Financials, and Utilities strong in the improving sector, and Energy in the red. The Health Care sector has gained some momentum and has started to move towards the improving sector.
Earnings
Will return next week.
Of Note
I wanted to bring a bit of the commodity world to our readers. This week, I am focusing on Coffee. My family owned a coffee farm in Costa Rica for a while and during that time I became a Coffee enthusiast. I have followed the coffee market and have even apprenticed as a roaster with a few great small coffee roasters.
Today, I ran across a great post from Visual Capitalist about the economics of Coffee and thought I would share. Since the pandemic, the coffee industry has changed a bit in the retail side. $SBUX has reduced its stores and retail footprint. However, local coffee shops have continued to expand and do well due to the need for people to have the sweet caffeine of coffee. I hope you enjoy this post and hat tip to Visual Capitalist for putting this together.
From a trading perspective, the coffee supply is stacking up due to the worldwide harvest. At some point these supplies will start to dwindle, pushing the price of coffee beans upward. Coffee is very cyclical in nature and this cyclicality can be used to trade. Looking at the Coffee Options one could buy a Feb 125 coffee call for $175 for a trade. Risk down to $100.
