Phase 4 Talks, Trump Ads, School Advice Switch, DJIA/Nasdaq Divergence
The following are Monday’s notable US events and developments worth watching in the days ahead:
- White House/GOP Senate/Dem House talks to the next virus response legislation approaching crunch time later in week, coming up against August 8 summer recess deadline set by Senate. Members of Congress will be getting anxious by Thursday since they need to get to home districts in election year. Since provisions of enhanced unemployment benefits will be retroactive and evictions moratorium patchy and slow to make effects known, few repercussions for delay at grassroots until they begin to become more threatening toward the end of the week.
- Thursday National Hurricane Center updates its outlook for storms this season with Isaias currently moving up the East Coast, making it the ninth named storm so far, a number usually reached only by September so an increase in the forecast expected. Gulf oil production, insurance firm outlooks influenced.
- Jobs numbers, particularly the initial jobless benefit claims Thursday morning, will be the top economic statistics to watch this week, with the claims increase one of the few relatively current gauges of the extent of the slowdown. Friday’s monthly jobs report from the BLS reflects mid-July unemployment, expected to show more than a million increased payroll slots, not close to the June 4.8 million number but considerably lagged, so less useful. The 11.5% unemployment rate expected to improve, but only slightly.
- The bottom line of the pace of the coronavirus is the daily death count, transcending all the other metrics, some of which are stabilising in the hardest hit states like Texas and California. If the death counts keep topping 1,000 a day (1,400 Friday) that will make August’s toll worse than any month so far, and far beyond early projections. With school reopening decisions being made every day in school districts across the country, a 30,000+ monthly toll will argue against expansive reopening plans being pushed by the White House and reinforce the view that an economic slowdown is deepening. Task Force’s Birx gets blasted by both Trump, for telling CNN schools should not welcome students back in where virus is intense, and by House Speaker Pelosi, for, she says, enabling Trump in resisting a national strategic plan to fight the virus.
- On the campaign trail, the Trump 2020 campaign begins a new approach to advertising messages Monday after pulling ads last week for a reassessment of strategy by the new campaign leadership. Trump campaign hopes tying Joe Biden to advisors like Bernie Sanders and Elizabeth Warren and to purported advisors like the AOC squad will gain the traction absent so far. On Biden’s side, still the balancing act of not wanting to interfere with the perception of Trump displaying more negatives than positives, but expected to ramp up campaign appearances with more concentration on virus response and economy. Biden VP choice apparently put off until next week.
- If the divergence between Blue Chip US stocks and the tech-heavy Nasdaq continues, the larger picture will seem to be how the pandemic is bifurcating the economy between winners and losers, with narrow FAANG and tech leadership backgrounded by much broader business deterioration, with increasing bankruptcies, job losses and longer lines at already overstressed food pantries – impinging on consumer confidence. Three-month Nasdaq +27%, S&P +16%, DJIA +12%.