Tag: news

PJMedia.com’s Matt Margolis reports that  during an exclusive interview on Fox & Friends Monday morning,  President Trump revealed that his list of potential Supreme Court nominees to fill the vacancy left by Ruth Bader Ginsburg has been narrowed down to five and that he’ll announce his choice Friday or Saturday.

“The bottom line is we won the election, we have an obligation to do what’s right and act as quickly as possible,” Trump said.

“I think it will be on Friday or Saturday and we want to pay respect. It looks like we will have services on Thursday or Friday, as I understand it, and I think we should, with all due respect for Justice Ginsburg, wait for services to be over.”

Trump says his SCOTUS pick will come Friday or Saturday.

pic.twitter.com/LYvoTxSrbX

— Matt Margolis 🇺🇸 (@mattmargolis) September 21, 2020

Ruth Bader Ginsburg died on Friday from metastatic pancreatic cancer. She was 87 years old.

As we previously detailed, the president’s list has likely been narrowed to two leading candidates, according to people familiar with the matter: federal appellate judges Amy Coney Barrett of the Seventh Circuit, in Chicago, and Barbara Lagoa of the 11th Circuit, in Atlanta.

• Judge Barrett, 48 years old, was confirmed to the U.S. Circuit Court of Appeals in October 2017 in a 55-43 vote. She is popular among social conservatives and was a finalist for the post in 2018 when Mr. Trump chose Justice Brett Kavanaugh.

• Judge Lagoa, 52, previously served as the first Hispanic woman on Florida’s high court.

Democrats have vowed to do anything in their power to either stop the nomination or retaliate afterward.

Nancy Pelosi refused to rule out using impeachment as a tactic to tie up the Senate to keep it from confirming a replacement. Chuck Schumer has also threatened to pack the court next year if Trump proceeds with the nomination.

But Democrats were previously all for election-year nominations to the Supreme Court.

“I made it absolutely clear that I would go forward with the confirmation process, as chairman – even a few months before a presidential election – if the nominee were chosen with the advice, and not merely the consent, of the Senate – just as the Constitution requires,” Biden said back in 2016.

“Eight is not a good number for a collegial body that sometimes disagrees.”

Even Ruth Bader Ginsburg said, “There’s nothing in the Constitution that says the president stops being president in his last year.”

*  *  *

Want to support PJ Media so we can continue telling the truth about what the Left is up to? Join PJ Media VIP TODAY and use the promo code LOYALTY to get 25% off your VIP membership. 

With Erika Adams of Eater New York,

Restaurant owners are grappling with whether to use a new emergency measure that City Council approved this week allowing NYC restaurants to add a COVID-19 surcharge of up to 10 percent to diner’s bills, the New York Times reports.

On Wednesday, the City Council voted, 46 to 2, to let restaurants impose a temporary “Covid-19 recovery charge” to help them through their fiscal straits. The bill, which Mayor Bill de Blasio will sign, according to a spokesman for his office, will allow restaurants the option of adding a surcharge of 10 percent or less to each bill (though not for takeout or delivery), as long as it is clearly noted on menus.

New York restaurateurs have long fought to strike down a city rule that forbids such surcharges, which are allowed at any time in other parts of the state and most of the country. In the pandemic, a city-sanctioned fee may be a way to allow restaurants to increase revenue without raising food prices, and to ascribe the charge to government.

But in interviews, many restaurant owners said they weren’t ready to add the new surcharge, especially at the full 10 percent.

While the extra revenue would be helpful to offset operating costs, some restaurateurs say they are concerned that the additional charge will scare off customers. A restaurant owner in Little Italy, Nick Criscitelli, told the Times that he won’t be adding the surcharge to bills as it’s difficult already for his customers to come to the restaurant during this time.

“Our customers are all families,” and during the pandemic most are neighbors and other regulars whose finances are as challenged as his own, Mr. Criscitelli said. “So why should we charge them any extra? It’s hard for them to come out now.”

Kalergis Dellaportas, the general manager of his family’s Bel Aire Diner, in Astoria, Queens, said that if the bill had passed at the start of the pandemic, he might have been tempted. But six months in, he has already planned for the extra costs of running a restaurant, including restarting indoor service at the end of the month.

Philippe Massoud, the owner of Lebanese restaurant Ilili in Flatiron, says that he may add a small surcharge of up to 3 percent while explaining the current pandemic-related operating costs like masks, gloves, and outdoor dining buildouts, to customers.

That’s exactly the point, said Andrew Rigie, the executive director of the NYC Hospitality Alliance, which has about 2,500 members — mainly more established restaurants, hotels and bars — and lobbied for the surcharge. “This bill is only meant to be one tool restaurants can apply to try to survive right now,” he said.

Others are more excited about the new surcharge: “They finally did the right thing, now they need to make it permanent,” said the chef Russell Jackson, a veteran of restaurants on both coasts and the owner of Reverence, a tasting-menu restaurant in Harlem. He compared the new surcharge to a small one he imposed while running a restaurant in San Francisco, after that city made restaurateurs responsible for some extra health care costs.

Yet even Jackson thinks 10 percent is too much. He said that he would try 5 percent, and that he had counseled one of his neighbors who runs a more casual restaurant to add 3 percent.

The surcharge, which comes before tax on the bill, can only be applied to in-person dining tickets, not takeout and delivery checks, the Times reports. Surcharges have been historically been illegal to use in NYC, although the practice is allowed elsewhere in the state. The temporary surcharge — set to expire 90 days after indoor dining returns at full capacity — will be available for use after Mayor Bill de Blasio, who supports the measure, signs the new bill into law.

Over the weekend, in looking at the political and market chaos unleashed by the passing of SCOTUS Justice Ruth Bader Ginsburg, we said markets are now facing a “nuclear scenario” and summarized the lay of the land by as follows:

Simply put, the political quagmire unleashed by the passing of Ruth Bader Ginsburg leaves the market in an even more precarious position since if a contested election was a source of great uncertainty before, a 4-4 SCOTUS extends that uncertainty even further as we already know there will be no concessions for weeks, and the extensions of mail-in ballots will merely add fuel to the fire of what is shaping up as the most contested election in US history.

In short, this is the “worst case scenario” – that JPMorgan just warned about last week  when envisioning a contested election’s impact on markets – on steroids, since The Fed has nothing new to offer and fiscal stimulus will definitely be off the table now until an election decision is made, a decision that may not comes for months without a SCOTUS tiebreaker vote.

Sure enough, this morning a plethora of Wall Street analysts took the stage to confirm our initial take, and explaining in their own words, why the death of RBG is sending futures sharply lower this morning, starting with Rabobank’s Michael Every who had this to say:

The death of US Supreme Court justice Ruth Bader Ginsburg … makes the US election even more important and heated than it already was – and harder to call. Listen to US commentators and all other topics are now secondary, including both the economy (bad for Trump) and Covid-19 (good for Trump). Republicans and Democrats are incredibly fired up given the outcome of the election could shift the balance of the court for a generation. Imagine if it shifted to 6-3 conservative; also imagine if no judge is appointed and it is then tied 4-4 when having to rule on a key element of what is widely expected to be a legally contested election; imagine the court being increased to 11 by Biden if he were to win; and imagine it going up to 15 or 17 if a Republican wins in 2024. This election was already seen as a potential risk event: arguably far more so now.

Next we go to DB’s Jim Reid who summarizes the outcome of RBG’s death as unveiling “lots of fascinating scenarios” to the table.

President Trump said that he would put forth a nominee to fill the seat and Senate Majority Leader McConnell said “President Trump’s nominee will receive a vote on the floor of the United States Senate,” indicating that Republican leadership will try to fill the seat ahead of the election.This represents a turn in the Majority leader’s thinking from 2016, where he did not allow a floor vote for then-President Obama’s nominee in an election year. The nomination and confirmation process will introduce a new element to an election not least because the court can hold sway over highly contentious issues like healthcare, abortion rights and gun law.

It brings lots of fascinating scenarios to the table. If Trump succeeds at getting his nomination through before the election there will be a 6-3 Republican bias to the Supreme Court which as discussed could have policy ramifications for the US for a generation. Democrats are up in arms that the Republicans won’t wait until after the election and are suggesting that may do extraordinary things to address the balance (like adding new judges to the bench) if they gain control of both the Senate and the White House. Congress altered the size of the bench seven times in the first eighty years of the republic (ranging from 5 to 10 justices) but this has not changed since the Judiciary Act of 1869. However getting the current Senate to confirm a nominee won’t be straight forward for Mr Trump as the GOP only hold a 53-47 majority in the Senate (with Vice President Pence serving as the tie-breaker) and a few members have already made noises that they don’t think a new judge should be added this close to the election. So even more drama added to an election campaign.

Finally, we present the Monday morning thoughts from Morgan Stanley analyst Michael Wilson who now expects a second leg of a market correction as a result of the mounting Fiscal Cliff concerns (which we have been discussing for the past month), coupled with the “Peak Fed” (as pointed out last night), with RBG’s death serving as the nail in the coffin of any hopes of an immediate rebound: “Fiscal negotiations have made little progress and the Fed failed to appease the doves on QE. The combination means lower equity prices before the correction, led by the Nasdaq, is over.”

He explains further:

We think the market is now faced with the following two potential outcomes:

1. Congress fails to pass the bill and the recovery stalls or
2. Congress does pass CARES 2, which is good for the recovery but is also bad for the long-end of the bond market.

In our view, the second outcome is more likely, while the first outcome would be a much greater threat to the bull market. Markets will be forced to watch and wait. At the end of the day, markets wobbling will be part of the pressure required to get a deal done. The question is how much pressure will be necessary.

This correction began on September 2, when equity markets failed to break through formidable longer-term resistance. The reasons are often unimportant at such junctures as the technicals simply take over, much like in August when markets went seemingly parabolic for “no reason.” Speaking of August, at this point, we think everyone understands the speculative drivers from both retail and certain institutional buyer(s) of call options in large cap technology stocks. The subsequent reversal of that speculation was naturally concentrated in those stocks too (Exhibit 2).

Perhaps even more interesting is the fact that the best performers this month have been stocks most levered to a continued economic recovery. In other words, the market does seem to be looking through the near-term risk of congressional legislative wrangling and expects something to get done. This means sustainable growth but higher back end rates – i.e. cyclicals over growth and defensives. Implicit in such a conclusion is our view that higher back end rates due to better growth and higher inflation should dissuade the Fed’s decision to engage in yield curve control.

Finally, the unexpected death of Supreme Court Justice Ruth Bader Ginsburg could stall passage of CARES2 in the near term as Democrats may back away from the bill if the President nominates his Supreme Court choice prior to the election.

In short, we believe the odds of scenario 1 may have just gone up, at least with respect to the timing of the next stimulus, and that could weigh on all equities and rates in the near term.

In conclusion, as the fog of political war lifts and as more clarity about the process of RBG’s replacement emerges, expect to see even more violent reactions in the market as the cascading consequences of the vacant SCOTUS seat flow through both the upcoming highly contested presidential elections, which as JPM already said is the “worst case scenario” for the market, and investor sentiment which is finally realizing that the record post-March rally is finally coming to an end.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Over the last several months, we have discussed the remarkable underperformance of value versus growth. While many investors quickly dismiss the performance gap under the guise of “this time is different,” it has important longer-term implications. In today’s missive, we want to discuss value, the margin of safety, and the real art of “doing nothing.” 

This Time Is Different

A recent MarketWatch article made an argument for why this time is different than previous cycles.

“Investors seem to want to embrace a value tilt – stocks that will do well as the economic recovery gathers steam. However, they continue to fall back on the tried-and-true growth stocks that have done well so far, through more uncertain times. But what if those old ‘value’ and ‘growth’ frameworks are the wrong way to measure market moves?”

If you re-read the statement closely, there are a couple of issues that stand out.

1. If “individuals” continue to “fall back” into the stocks that are rising with the market, then they are “speculating” by chasing prices rather than “buying value.” 

2. There is nothing wrong with the “growth” and “value” frameworks, expect in periods where they don’t fit the speculative fervor of the market.

Investing Versus Speculation

Currently, the majority of investors are simply chasing performance. However, why would you NOT expect this to be the case. On a daily basis the media, and WallStreet, continually press investors to chase prices higher by deeming “this time to be different.” 

However, this is where we can begin to understand the difference between investing based on value versus speculating for short-term gains.

Let me give you an example:

You are playing a hand of stud poker, and the dealer deals you this hand:

How would you bet? A lot, a little, or would you fold? 

Even a cursory understanding of the game of poker suggests other players are probably holding better hands than you. Instinctively, you know this and you would tend to “fold” and wait for the next hand.

Now, is this operation “investing” or “speculation?” 

The answer should be obvious. When you engage in an operation where the outcome is primarily derived from “luck,” more than “skill,” it is speculation.

Phillip Carret, who wrote The Art of Speculation (1930), defined this more elegantly:

“Speculation, may be defined as the purchase or sale of securities or commodities in expectation of profiting by fluctuations in their prices.”

Chasing markets is the purest form of speculation. It is merely a bet on prices going higher rather than determining if the price paid for those assets is at a discount to fair value.

The Discounting Of Value

What the quote from MarketWatch espouses is that of the “Greater Fool Theory.”

“The greater fool theory states that it is possible to make money buying securities, whether or not they are overvalued, and sell them for a profit at a later date. Such is because there will always be someone (i.e. a bigger or greater fool) else willing to pay a higher price.”

Such is also the purest definition of market speculation.

Benjamin Graham, along with David Dodd, attempted a precise definition of investing and speculation in their seminal work Security Analysis (1934).

“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.”

Graham also noted why individuals should be concerned when they read articles espousing “this time is different.” 

“The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is a cause for concern.” – The Intelligent Investor

Given the sharp rise in markets since March, it is not surprising the media pushes a host of excuses to justify overpaying for assets. However, as Graham goes on to note, the media should take a different track.

We have often said that Wall Street as an institution would be well advised to reinstate this distinction and to emphasize it in all its dealings with the public. Otherwise the stock exchanges may some day be blamed for heavy speculative losses, which those who suffered them had not been properly warned against.” – Ben Graham, The Intelligent Investor

Why Value Investing Wins The Long-Game

Throughout market history, investors repeatedly abandon the principles of value investing and maintaining a “margin of safety” during periods of exuberance. Ultimately, those investors paid a dear price for their speculation. “Overpaying for value” has repeatedly led to poor financial outcomes.

What Is A “Margin Of Safety”

Ben Graham heavily espoused the importance of a “margin of safety” in the investment operation. The margin of safety suggests an investor only purchases securities when their market price is significantly below their intrinsic value.

“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety” – Ben Graham

Followers of Ben Graham’s teachings have a deep history of long-term investing success from Warren Buffett to Seth Klarman:

“The best investments have a considerable margin of safety. This is Benjamin Graham’s concept of buying at a sufficient discount that even bad luck or the vicissitudes of the business cycle won’t derail an investment. As when you build a bridge that can hold 30-ton trucks but only drive ten-ton trucks across it, you would never want your investment fortunes to be dependent on everything going perfectly, every assumption proving accurate, every break going your way.” – Seth Klarman

The reality of investing is that rarely does everything “break” the right way. Having a “margin of safety” provides a cushion against the unexpected when it occurs.

An Example Of Intrinsic Value

Investing using a “margin of safety” is not as easy as it sounds. The vast majority of retail investors today do “no research” on the companies in which they invest. They look to the financial media, websites, and tweets to tell them what to buy. Or worse yet, they just buy what is “winning” in the short-term.

The reality is that the concept of a margin of safety is found only by researching to discover the company’s qualitative and quantitative factors. Such work includes understanding the firm’s management, governance, industry performance, assets, and earnings. From there, the investor must derive the security’s intrinsic value.

The following is a report on CVS Health. We regularly provide such reports to our RIAPRO Subscribers (30-day Risk-Free Trial). The report is a condensed version of analysis we use to determine the intrinsic value of a potential investment opportunity.

Nick Lane: The Value Seeker Report- CVS Health (NYSE: CVS)

Once you have done your homework, the market price is then used as the point of comparison to calculate the margin of safety. As noted in the CVS report:

“CVS is currently priced at a deep discount to its intrinsic value. We forecast that roughly 47.1% of upside remains on the stock.”

Such is why Warren Buffett declares the “margin of safety” as one of his “cornerstones of investing.” He, like us, applies as much as a 50% discount to the intrinsic value of a stock to determine price targets.

However, in a market that is overvalued on many metrics, finding value becomes difficult. Furthermore, holding value when it is underperforming the “hot stocks” in the market, is even more challenging.

Art Of Doing Nothing

Currently, value investing is clearly out of favor. It hasn’t worked well for so long it is not surprising the media has declared “value investing dead.” As we showed in that article:

“The graph below charts ten-year annualized total returns (dividends included) for value stocks versus growth stocks. The most recent data point representing 2019, covering the years 2009 through 201-, stands at negative 2.86%. Such indicates value stocks have underperformed growth stocks by 2.86% on average in each of the last ten years.”

There are two critical takeaways from the graph above:

• Over the last 90 years, value stocks have outperformed growth stocks by an average of 4.44% per year (orange line).

• There have only been eight ten-year periods over the last 90 years (total of 90 ten-year periods) when value stocks underperformed growth stocks. Two of these occurred during the Great Depression, and one spanned the 1990s leading into the Tech bust of 2001. The other five are recent, representing the years 2014 through 2019.

Mirror Opposites

“The chart shows the difference in the performance of the “value vs growth” index. That index is compared to a pure growth index with each based on a $100 investment. While value investing has always provided consistent returns, there are times when growth outperforms value. The periods when “value investing” has the greatest outperformance, as noted by the “blue shaded” areas, are notable.”

So, what should investors do when they can’t find real value in which to invest? While the media says you must always remain invested regardless of the outcome, there is an option. Do nothing.

The Art Of Doing Nothing

Such was a point Jesse Felder recently noted:

Perhaps the most important lesson about investing I’ve learned is when there is nothing to do, do nothing. The problem is nothing may actually be the hardest thing to do. We all want to feel like we are being proactive and that requires doing something even when there’s nothing to be done. So it takes a great deal of discipline to resist the urge to do something and commit to doing nothing. In that way, however, committing to doing nothing is probably the most proactive thing to do.

His comment defines “investment” versus “speculation.” 

When investing, we seek to deploy capital in an operation with potential to deliver a high return on that investment. Therefore, logically, if no such opportunity with the required “margin of safety” exists, then the best operation is to “do nothing.” 

You wouldn’t overpay for a piece of real estate. You shop for the best price on everything from televisions to autos. Yet, when it comes to investing, why would you pay any price for a future stream of cashflows?

Conclusion

Another way to think about this is to realize that the vast majority of mistakes investors make come out of a feeling of needing to do something, of being proactive, rather than simply waiting patiently to react to a truly fantastic opportunity. Rather than react only to true opportunity, they react to social pressure or envy when they see their neighbor making a “killing” in dot-com stocks, ala 2000, or residential real estate, ala 2005, or in call options today.” – Jesse Felder

As is always the case, it may seem for a while that investors are making money “hand over fist” while the market is rising. However, the stories are just as plentiful about what happens as the inevitable downturn vaporizes capital in an instant.

I agree with Jesse’s conclusion:

Right now, due to the extraordinary circumstances in the world, politics, the economy, monetary policy, and more, the urge to do something is greater than normal. However, the opportunity to put money to work is simply not there. At least not yet. But it’s coming. And until it does, the most proactive thing an investor can do is simply commit to doing nothing. Understanding that that is not a passive decision, but a very proactive one, indeed.

Senate Republicans are set to release their long-awaited report on Joe and Hunter Biden’s activities in Ukraine, and is expected to conclude that Hunter Biden’s lucrative seat the board of Ukrainian energy giant Burisma impacted Obama-era Ukraine policy, which was led by Joe Biden at the time, according to The Hill.

Joe Biden has been accused of abusing his position in a quid-pro-quo arrangement whereby he admitted he withheld $1 billion in US loan guarantees if the country’s lead prosecutor investigating Burisma was fired.

The Bidens have denied any wrongdoing, however depositions from former Ukrainian officials  who were directly involved, as well as leaked recordings between Joe Biden and former Ukrainian President Petro Proroshenko have painted a picture of textbook corruption. Notably, Ukrainian parliamentarian Andriy Derkach was sanctioned by the Treasury Department for “spreading disinformation to ‘undermine’ the former vice president” when he leaked several recordings of “voices similar to Poroshenko and Biden” discussing the quid-pro-quo, which Derkach says a journalist gave to him.

The Senate report follows a probe spearheaded by Sens. Ron Johnson (R-WI) and Chuck Grassley (R-IA), and is expected to be released this week.

“I think it’s time for the American people to see what we’ve got,” said Johnson, chairman of the Senate Homeland Security and Governmental Affairs Committee. “What our investigations are uncovering, I think, will reveal this is not somebody we should be electing president of the United States,” he added.

The report will come days before the first presidential debate between President Trump and Joe Biden, and will likely provide Trump with plenty of fresh ammunition. Biden, meanwhile, will be able to trot out Trump’s latest sexual assault accusation, to which Trump will be able to trot out Biden’s.

Sen. Mitt Romney (R-UT) predictably downplayed the report – warning that the Biden-Burisma probe was nothing more than a “political exercise,” adding “It’s not the legitimate role of government for Congress or for taxpayer expense to be used in an effort to damage political opponents.”

The Biden campaign responded – telling The Hill: “It is disgraceful enough for the chair of the Homeland Security & Governmental Affairs Committee to dismiss the worst public health crisis in generations and abandon oversight of the failed federal response to the pandemic. But to instead subsidize a foreign influence operation against the sovereignty of our elections with American taxpayer dollars, all in a vain attempt to resuscitate a conspiracy theory that hinges on Senator Johnson himself being corrupt, is tragic malfeasance.“

That’s quite the statement – and telegraphs Biden’s likely bullet points for the debate. Whether he can effectively convey them is anyone’s guess.

Senate Minority Leader Chuck Schumer (D-NY) and Sen. Ron Wyden (D-OR) attempted to pass a resolution condemning the GOP’s Burisma probe, while The Hill also reports that Democrats may claim that the probe violates the Senate’s Rule 19 – which states that “no Senator in debate shall, directly or indirectly, by any form of words impute to another Senator or to other Senators any conduct or motive unworthy or unbecoming a Senator.”

“President Trump’s Department of the Treasury sanctions Derkach, and the chairman of the committee repeats the same kind of discredited allegations that Derkach propagates. It is outrageous. It is a disgrace,” Schumer added. Johnson, meanwhile, has denied any contact with Derkach during the investigation.

In other words, it doesn’t matter what the GOP probe concludes about the Bidens and Ukraine – it’s ‘unbecoming of a Senator’ to investigate at all.

According to Sen. Johnson, “I saw their resolution … so I was going to enter my own,” adding “When I came on the floor, I was basically warned, ‘We are concerned about what’s going to happen here on the floor.’ … We were all warned.“

Looking at the week ahead, the highlight will be Fed Chair Powell who after last week’s disappointing FOMC meeting will be speaking not once, not twice, but three times before congressional committees (just in case anyone thinks he will let this market aggression stand). First, he will appear tomorrow before the House Financial Services Panel about the CARES Act. Then on Wednesday he’ll be appearing on the House Select Subcommittee on the Coronavirus Crisis, before Thursday sees him speak before the Senate Banking Committee on the CARES Act once again. Additionally, there’ll be remarks from Fed Vice Chair Quarles on the economic outlook, and a total of 13 other FOMC members will be speaking this week. Bank of England Governor Bailey will be speaking twice this week.

Aside from central banks, the flash PMIs on Wednesday will probably get the most attention as it is one of the first glimpses of September economic performance around the world. Meanwhile, as Deutsche Bank notes, economic and social restrictions are mounting again in various places due to the virus but it may be a bit too early to see their impact in these numbers.

In the US, the key economic data releases this week are the jobless claims report on Thursday and the durable goods report on Friday.

It’ll also be worth keeping an eye on Germany’s Ifo survey on Thursday, which has so far been rising each month since its April low, even as it remains below its pre-pandemic level. The consensus is looking for a further increase to 93.8, which would be just 2 points below its level in February.

There’ll also a special European Council summit on Thursday and Friday. As well as taking stock of the Covid-19 pandemic, the agenda includes a discussion of the single market, industrial policy and digital transformation, along with the EU’s external relations. Brexit may get a small mention as relationships between the EU and the U.K. are just about hanging by enough of a thread enough to merit it. The day by day calendar of the week ahead is at the end.

Courtesy of Deutsche Bank, here is a day-by-day calendar of events:

Monday

• Data: US August Chicago Fed National Activity Index
• Central Banks: ECB’s Holzmann and Fed’s Brainard speak
• Politics: Voting continues in Italian constitutional referendum and regional elections

Tuesday

• Data: UK August public finances, Euro Area advance September consumer confidence, US August existing home sales, September Richmond Fed manufacturing index
• Central Banks: Fed Chair Powell speaks before the House Financial Services Committee on the CARES Act, Fed’s Evans and BoE Governor Bailey speaks

Wednesday

• Data: September flash manufacturing, services and composite PMIs from Australia, Japan, France, Germany, Euro Area, UK and US, Japan July all industry activity index, Germany October GfK consumer confidence, US weekly MBA mortgage applications, July FHFA house price index
• Central Banks: Fed Chair Powell speaks before the House Select Subcommittee on the Coronavirus Crisis, Fed Vice Chair Quarles speaks on the economic outlook, Fed’s Mester, Evans, Rosengren and Daly speak

Thursday

• Data: France September business confidence, Germany September Ifo business climate indicator, US weekly initial jobless claims, August new home sales, September Kansas City Fed manufacturing activity index
• Central Banks: ECB publishes Economic Bulletin, Central Bank of Turkey and Bank of Mexico monetary policy decision, Bank of Japan publish minutes of July meeting, Fed Chair Powell testifies before Senate Banking Committee on the CARES Act, Boe Governor Bailey and Fed’s Bullard and Evans speak
• Politics: Special European Council summit begins

Friday

• Data: Euro Area August M3 money supply, Italy September consumer confidence index, US preliminary August durable goods orders, nondefence capital goods orders ex air
• Central Banks: Fed’s Williams speaks
• Politics: Special European Council summit concludes

Finally, looking at just the US, here is a breakdown of the key US events via Goldman Sachs:

Monday, September 21

• There are no major economic data releases scheduled.
• 12:00 PM Fed Governor Brainard (FOMC voter) speaks; Fed Governor Lael Brainard will discuss the Community Reinvestment Act at a virtual event hosted by the Urban Institute. Prepared text and moderated Q&A are expected.

Tuesday, September 22

• 10:00 AM Existing home sales, August (GS +2.0%, consensus +2.6%, last +24.7%); After surging by 24.7% in July, we estimate that existing home sales increased 2.0% further in August. Existing home sales are an input into the brokers’ commissions component of residential investment in the GDP report.
• 10:00 AM Richmond Fed manufacturing index, September (consensus 12, last 18)
• 10:00 AM Chicago Fed President Evans (FOMC non-voter) speaks; Chicago Fed President Charles Evans will discuss the economy and monetary policy at a virtual event hosted by OMFIF.
• 10:30 AM Fed Chair Powell appears before the House Financial Services Committee; Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin will testify on the CARES Act before the House Financial Services Committee. Prepared text and questions from legislators are expected.
• 12:00 PM Richmond Fed President Barkin (FOMC non-voter) speaks; Richmond Fed President Thomas Barkin will take part in a virtual discussion hosted by the Greenville S.C. Chamber of Commerce.

Wednesday, September 23

• 09:00 AM FHFA house price index, July (consensus +0.4%, last +0.9%)
• 09:00 AM Cleveland Fed President Mester (FOMC voter) speaks; Cleveland Fed President Loretta Mester will discuss payments and the pandemic at the Chicago Payments Symposium. Prepared text and audience Q&A are expected.
• 09:45 AM Markit Flash US manufacturing PMI, September preliminary (consensus 53.3, last 53.1)
• 09:45 AM Markit Flash US services PMI, September preliminary (consensus 54.5, last 55.0)
• 10:00 AM Fed Chair Powell appears before House panel on Covid-19; Fed Chair Jerome Powell will appear before the House Select Committee on the Coronavirus Crisis. Prepared text is expected.
• 11:00 AM Chicago Fed President Evans (FOMC non-voter) speaks; Chicago Fed President Charles Evans will discuss the economic outlook in an MNI moderated discussion. Media Q&A is expected.
• 12:00 PM Boston Fed President Rosengren (FOMC non-voter) speaks; Boston Fed President Eric Rosengren will discuss the U.S. economy at a virtual event hosted by the Boston Economic Club. Text and audience Q&A are expected.
• 02:00 PM Fed Governor Quarles (FOMC voter) speaks; Fed Vice Chair for Supervision Randal Quarles will give a virtual speech on the economic outlook to the Institute of International Bankers. Text and Q&A are expected.
• 03:00 PM San Francisco Fed President Daly (FOMC non-voter) speaks; San Francisco Fed President Mary Daly will take part in a Fed-hosted virtual discussion on the impact of the coronavirus pandemic on the labor force.

 
Thursday, September 24

• 08:30 AM Initial jobless claims, week ended September 19 (GS 875k, consensus 840k, last 860k); Continuing jobless claims, week ended September 12 (consensus 12,450k, last 12,628k); We estimate initial jobless claims increased to 875k in the week ended September 19.;
• 10:00 AM New home sales, August (GS -2.0%, consensus -1.2%, last +13.9%); We estimate that new home sales declined by 2.0% in August, partly reflecting a drag from less mortgage applications.
• 10:00 AM Fed Chair Powell appears before the Senate Banking Committee; Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin will deliver their quarterly CARES Act report to the Senate Banking Committee.
• 11:00 AM Kansas City Fed manufacturing index, September (consensus 14, last 14)
• 12:00 PM St. Louis Fed President Bullard (FOMC non-voter) speaks; St. Louis Fed President James Bullard will discuss the economy and monetary policy in a webinar hosted by the Global Interdependence Center.
• 01:00 PM Chicago Fed President Evans (FOMC non-voter) speaks; Chicago Fed President Charles Evans will discuss the economic outlook in a virtual event hosted by the Illinois Chamber of Commerce.
• 01:00 PM Richmond Fed President Barkin (FOMC non-voter) speaks; Richmond Fed President Thomas Barkin will give a speech on inflation and the economy to the Money Marketeers of NYU. Prepared text is expected.
• 02:00 PM Richmond Fed President Barkin (FOMC non-voter) speaks; Richmond Fed President Thomas Barkin will take part in a virtual discussion hosted by the Baltimore City Chamber of Commerce.

 
Friday, September 25

• 08:30 AM Durable goods orders, August preliminary (GS +2.0%, consensus +1.1%, last +11.4%); Durable goods orders ex-transportation, August preliminary (GS +1.5%, consensus +1.0%, last +2.6%); Core capital goods orders, August preliminary (GS +1.3%, consensus +0.8%, last +1.9%); Core capital goods shipments, August preliminary (GS +1.0%, consensus +0.5%, last +2.4%): We expect durable goods orders to increase 2.0% in the preliminary August report, reflecting improvement in net aircraft orders but a pullback in the defense category. We expect a 1.3% increase in core capital goods orders, reflecting the continued industrial rebound.
• 09:00 AM New York Fed President Williams (FOMC voter) speaks; New York Fed President John Williams will participate in a conference call with community development and nonprofit leaders from the greater Rochester area.
• 03:10 PM New York Fed President Williams (FOMC voter) speaks; New York Fed President John Williams will take part in a virtual discussion on the Covid-19 job market with young adults in the greater Rochester area.

Source: DB, Goldman, Bank of America

Between bad banks behavior, COVID second-wave concerns, and political chaos; it appears markets (particularly stock markets) are waking up from their fiscal and monetary policy inspired dream-state.

Stocks are getting spanked…

The dollar is spiking…

Sending gold notably lower…

And Cryptos…

But bonds are bid…

Fed Chair Powell is on deck three times this week – seems like he needs to do so ‘splaining!