E-mini S&P 500 Futures (March): Settled at 3718.25, up 26.00
E-mini Nasdaq-100 Futures (March): Settled at 12,793.50, up 108
U.S. benchmarks are very mixed after Democrats confidently secured 1 of 2 Senate races in Georgia and hold a strong lead in the other. Although there are votes yet to be counted and we may not have an answer until the end of the week, many of those votes are believed to come from Democrat-heavy precincts, as well as military and overseas ballots. Markets have begun pricing in a blue sweep, where Democrats control all 3 branches of government.
At the time of this writing, the Nasdaq is down by 1.5% and Russell 2000 up 2.5%. The S&P is staying close to unchanged despite battling overnight selling. As we’ve discussed many times before, markets don’t like uncertainty, and this certainly adds a layer. Yes, there’s a cleaner path to added stimulus measures, which markets love, but it also introduces tremendous uncertainties for corporations, especially Big Tech, and this can be seen through the Nasdaq’s early reaction.
The first week of the new year always invites added volatility as traders and investors rebalance their narratives and plan for not only a new quarter, but a fresh 12 months. With that said, throw in the drastic shift to what we may see from Washington and it certainly begins to explain some of the volatility seen through this week already. Is there more to come? Today and this week will provide some answers, but we won’t know for sure. Ultimately, in recent weeks, we’ve discussed these potential uncertainties at the onset of a fresh 12 months. The entire rhetoric has been a backbone to our more cautious, strategic, and patient attitude after a magnificent bull run.
Today’s economic calendar brings us the first glimpse of December jobs data. The private ADP Payroll survey actually printed a loss of 123,000 jobs versus an expected gain of 88,000 jobs. We saw Factory Orders at 9:00 a.m. CT and see FOMC Minutes from the December meeting at 1:00 p.m. CT. Crude Oil has been flirting around the psychological $50 mark and the energy sector has outperformed to start the year after Saudi Arabia announced a surprise production cut in February. EIA inventory data was released at 9:30 a.m. CT.
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