The market has been largely meandering today, as investors great fiscal stimulus with a collective yawn. There is an aspect of selling the news. But let’s face it, the report could have focused more on building financial bridges for households and less for well-funded cultural institutions.
There is also a sense of angst over the near term reflected in Consumer Confidence report that came in well below expectations.
- Headline 88.6
- Estimate 97.5
- November 92.9
The report is really the tale of current doubt and future positive anticipation. A combination of things, including a spike in coronavirus, surge in lockdowns and post-election blahs, knocked present conditions for a loop.
Conversely, six months from now, expectations are better in most categories, including business conditions and assumption of higher wages.
Consumer Confidence | Nov | Dec |
Present | 109.9 | 90.3 |
Expectations | 84.3 | 87.5 |
Manufacturing Strength
For the most part, the manufacturing renaissance continues with the latest example coming from the Richmond Fed. The headline number is up nicely from November, as new orders and employment led the way.
Richmond Fed Survey | Nov | Dec |
Headline | 15 | 19 |
New Orders | 12 | 24 |
Shipments | 20 | 12 |
Employment | 13 | 20 |
The market is beginning to get that holiday feeling of indifference. All the major news from corporate earnings, the Fed meeting and fiscal stimulus have come and gone.
I think the so-called Santa Claus rally began more than a month ago. We could see tax loss selling combined with an absence of traders.