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Stock Futures Move Higher Despite Disappointing German Data

European futures are trading higher despite the fact that the German GfK Consumer Climate data missed the forecast. However, traders are pleased with the number as it is moving in the right direction. Today’s number came in at -1.6% against the previous reading of -1.7%. The forecast was for -1.0%

U.S. stock futures are also set to extend their gains as the Federal Reserve’s Chairman, Jerome Powell, assures the Fed’s support. The Chairman reiterated his uncertain outlook for the U.S. economy and confirmed that the path of recovery is very much dependent on controlling the virus, but he also confirmed that the bank is ready to provide more support if there is any need for it. Given the fact that the coronavirus situation is likely to worsen as the flu season kicks in, it is likely that the Fed will have to open the liquidity taps further.

Other Federal Reserve committee members were also speaking yesterday. The Fed President, Charles Evan, surprised the markets with his comments when he said that the U.S. economy had recovered 90% of its weakness. It certainly doesn’t feel that the economy has recovered half of its bruises, so saying 90% is very bold. He also believes that the U.S. can increase its interest rate without reaching the target inflation. His comments sparked a rally for the dollar, and the dollar index is well off its lows. Currencies such as the Euro and Sterling are feeling the pain because of the dollar strength.

Over in the U.K., employers are once again busy in restructuring their business plans as the government has encouraged workers to work from home. One of the major investment banks, Goldman Sachs, had to reverse its course in London and asked employees to continue working from home. The British Prime Minister warned the public that Brits are likely to see many more deaths. Another lockdown will be inevitable if the public continues to violate the restrictive coronavirus rules.

The U.S. has avoided the shutdown because the House passed the bill to keep the government continuing its operation until December. The bill will continue its journey towards Senate for a vote, which needs to be passed before Sept 30.

Tesla stock is likely to be in the limelight today as the company’s founder, Elon Musk, said yesterday that the company has a plan to produce 25,000 mass-market electric vehicles. This car can be available during the next three years. This is a bag of mixed news. On the one hand, you have good news that we will see a cheaper electric car, but at the same time, tesla car lovers will need to wait for three years to see this car.

In terms of economic data news today, the U.S. doesn’t have any economic news events. This means that the focus is more likely to be on the Jerome Powell and other Fed speeches. Traders will continue to monitor the dollar index, which for now, has broken out of its downward trend line on the daily time frame, indicating a bull trend.

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