Equity Indices - short covering into GDP data
Equity indices have reversed direction again with short covering into data-rich tomorrow. At 8:30am EST, Advance Q2 GDP, Initial Jobless Claims and the Employment Cost Index are out. There is potential for GDP to surprise on the upside due to the stimulus payments. Initial Claims have been volatile of late with a plus 400k reading last week. Readings of over 400k are associated with recessions but the last plus 400k readings have been followed by a plunge in the following week’s Claims data. The ECI is likely to reflect lower costs overall due to higher unemployment and real wages are likely to still be on the downside.