Happy Monday. Good Luck out there this week.
Global Spotlight
Another election in Israel? Israel’s unity government is wobbling as its primary leaders, Defense Minister Benny Gantz of Blue and White and Prime Minister Benjamin Netanyahu of Likud, negotiate an unlikely last-minute compromise on the national budget that would avoid another round of elections.
A first COVID-19 vaccine seeks Food and Drug Administration approval. The U.S. FDA is set to review the Emergency Use Authorization application for Pfizer-BioNTech’s COVID-19 vaccine on Dec. 10. Pfizer has already moved the first shipments of vaccines to distribution locations around the country in anticipation of approval.
The Brexit endgame arrives. EU-U.K. trade negotiations have entered a critical stage, with the make-or-break moment expected to arrive in a matter of days. While the two sides say a deal is possible, issues like fishing rights and British alignment with single market rules — which have been obstacles to a deal since the negotiations began in March — remain problematic.
A tense European Council. EU leaders will meet Dec. 10-11 for a European Council summit with several hot topics on the agenda. If there is a Brexit deal, the leaders will vote on it.
The European Central Bank’s Governing Council’s expected extraordinary liquidity support extension. On Dec. 10, the council is expected to extend the support by six months to end-2021, and to add 500 billion euros (about $600 billion) to its 1.35 trillion euro emergency bond-buying program.
U.S. fiscal stimulus negotiations continue. The prospects a compromise package of $908 billion will pass Congress next week have improved. House Democrats have dropped demands for a $2 trillion-plus package and a bipartisan group of senators backs a deal.
Venezuelan National Assembly elections. A majority of Venezuela’s opposition parties and the interim government led by Juan Guaido have boycotted the Dec. 6 vote. Most of the countries that recognize Guaido as Venezuela’s leader, including the United States and members of the European Union, have also indicated they will not recognize the legitimacy of the results.
Stratfor.com
Economic Calendar
Briefing.com has a good U.S. economic calendar for the week. Here are the main U.S. releases.
Briefing.com
Last Weeks Numbers
Review Last weeks numbers here.
Once again, Juan Luque provides us with some words of wisdom from the Incline trading desk:
The S&P 500 was up 1.67% this week with all sectors positive except Consumer Discretionary and Utilities. Energy continues to be the big winner in the past weeks with almost a 5% return this week. Real Estate, Consumer Staples, and Industrials have lost momentum and are moving towards the lagging and weakening quadrants. The Financials sector is strengthening and is approaching the leading quadrant. The Communication Services is rotating rapidly and moving straight towards the leading quadrant too. With the prospects of Covid-19 vaccine news and possible additional stimulus, investor’s sentiment is bullish as we navigate markets at all-time highs.
Earnings
Source I/B/E/S data from Refinitiv
Aggregate Estimates and Revisions
- 20Q3 earnings are expected to be -6.1% from 19Q3. Excluding the energy sector, the earnings growth estimate is -1.9%.
- Of the 496 companies in the S&P 500 that have reported earnings to date for 20Q3, 84.5% have reported earnings above analyst expectations. This compares to a long-term average of 65% and prior four quarter average of 73%.
- 20Q3 revenue is expected to be -0.9% from 19Q3. Excluding the energy sector, the growth estimate is 2.4%.
- During the week of Dec. 7, seven S&P 500 companies are expected to report quarterly earnings.
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