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Quote of the Day: “Someone’s sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett
From a business perspective, it’s typically not a great thing when the center of attention on a given day turns to D.C. Unfortunately, that’s the case today for three reasons. First, after each side has outlined its opening demands for the next round of stimulus, Republicans and Democrats will not attempt to work out an agreement. Second, the FOMC. Today at 2 PM the Fed will release their latest decision on interest rates and monetary policy followed by a 2:30 press conference from Chair Powell. If that’s not enough, throughout the day we’ll also have the CEOs of Amazon (AMZN), Alphabet (GOOGL), Apple (AAPL), and Facebook (FB) testifying before the House antitrust committee. Besides members of Congress looking to create a good soundbite for their constituents back home ahead of this Fall’s election, don’t expect much to come from these hearings.
In other news, the flow of earnings has generally remained positive this morning while the pace of economic data will be relatively slow.
Be sure to check out today’s Morning Lineup for a rundown of the latest stock-specific news of note, key earnings news in Europe and the US, trends related to the COVID-19 outbreak, and much more.
In yesterday’s Consumer Confidence report, besides the fact that overall levels of confidence pulled back a bit, sentiment towards the stock market became less optimistic. In each month’s survey, respondents are asked whether they expect stock prices to rise or fall.
In this month’s survey, the percentage of consumers expecting stock prices to decline rose from 29% up to 38.1%. While that’s below the recent peak of 40.6% seen back in March, it’s still elevated relative to readings over the last few years. What’s even more notable about this elevated reading is that it’s incredibly uncommon to have this elevated of a reading with the S&P 500 within 5% of an all-time high. While there are a number of anecdotal stories suggesting frothiness in the market, surveys of average Americans like this one suggest that there’s still no shortage of apprehension.