Midweek Macro – 11.25.2020

Yesterday saw the DOW Jones Industrial Average reach its highest levels to date  — 30,000 points.

’s  off to all the policymakers and consumers that made that possible during a year which the words “Next Great Depression” were uttered all too frequently.

This final push across the 30k line was in part due to the Trump administration vocalizing its intent to cooperate with President-Elect Biden’s transition to the White House.

Optimism for a stronger recovery has also been bolstered this week thanks to the incoming Biden administration indicating they are looking to market veteran and former Fed Chairwoman Janet Yellen to take the reins from Steve Mnuchin as head of the U.S. Treasury Department.

Over the coming weeks, markets will look to untangle the transition of Mnuchin to Yellen, what the FED’s set of crisis tools might look like in 2021, who will control the Senate and how these pieces all come together. For in that answer lies a better understanding of what fiscal and targeted FED stimulus is possible to bridge the gap until vaccines become widely administered.

Thus far, $2 trillion in fiscal aid was passed in March with the CARES act and the FED has purchased enough assets to grow their balance sheet by $3 trillion.

The S&P 500 is up 12% this year, marking what will be the first time the index has fallen more than 30% only to rebound and finish higher in the same year.

Many see the stock market as a mark of recovery, but when you pull back the onion, the recovery is an un-even one with employment growth beginning to lag.

With tomorrow full of turkey, and Friday full of leftover turkey, the release of the regular economic data harvest will be bountiful today.

Just released this morning:

  • Initial Jobless Claims – 778k (worse than 730k expected)
  • Durable Goods Orders – increased 1.3% MoM (better than .8% expected)

Set to be released at 10AM:

  • New Home Sales
  • Consumer Sentiment Index
  • Personal Income
  • Consumer Spending
  • Core Inflation

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