Here’s what you need to know before markets open.
1. The US needs $3 trillion to undo the economic damage of the pandemic, but policymakers seem unable to hear that message, economist says. “We have to get the money out there and we have to get it out there now,” William Lee said.
2. Retail option traders could have also played part in SoftBank’s Nasdaq ‘whale’ bet. Data from Sundial Research shows retail traders have spent almost $40 billion on similar trades.
3. Morgan Stanley says earnings guidance is more unpredictable than ever, but focus on ‘high-quality factors’ can reveal long-term winners. “The key for investors is having a trading strategy that separates true economic break-outs from technical noise,” Boris Lerner said.
4. US Investing Championship contender Oliver Kell raked in a 359.4% return through July. Here’s the strategy he’s using to crush the competition – and 3 stocks he’s holding right now. “I’m looking for stocks that that can rally a hundred, 200, 300%,” Kell said.
5. Bernstein breaks down why value investing is not dead – and shares its 3-part strategy for buying cheap stocks before they break out higher. Value stocks could break out higher with support from a snap-back in inventories – and Bernstein has a three-part trade to take advantage of the move.
6. ‘More fragile than people think’: A Wall Street expert says the emerging ‘species’ of risk-loving day traders is threatening to upend an already vulnerable stock market. “Right now, anyone trying to trade this market needs to better understand this new species of trader,” Academy Securities’ Peter Tchir said.
7. Tesla is ‘profoundly overvalued,’ and its exclusion from the S&P 500 was a ‘brave’ decision by the index committee, DataTrek says. The EV-maker will remain eligible for inclusion in the S&P 500 index if it continues to stay profitable in future quarters.
8. US futures have slipped. In Europe, Germany’s DAX rose 0.1%, Britain’s FTSE 100 fell 0.6% and the Euro Stoxx 50 fell 0.2%. In Asia, China’s Shanghai Composite fell 0.6%, Hong Kong’s Hang Seng fell 0.6%, and Japan’s Nikkei rose 0.8% at the close. In the US, futures underlying the Dow Jones Industrial Average, the S&P 500, and the US Tech 100 fell between 0.2% and 0.5%.
9. Earnings expected. Oracle and Peloton are highlights.
10. On the economic data front. Continuing jobless claims, the Energy Information Administration’s crude oil stocks change, and the 4-week bill auction are due.