“Maybe they’ll get more overvalued. I think that’s the argument for being long today is that …continued overvaluation and [they can] get even more so. But they’re overvalued and this is the setup up for left tail events in stock markets,” — trader Mark Spitznagel

1. Trump Authorizes Extending Special Unemployment Benefit at $400 a Week — President Trump directed the federal government Saturday to provide $300 a week in additional payments to the unemployed and called on states to fund an extra $100 in weekly benefits. The measure was one of four the president signed to extend coronavirus aid after negotiators for the White House and Democrats in Congress failed to reach an accord. The order signed by Mr. Trump authorized states to pay $400 a week in added benefits, but only funded 75% of that. It was uncertain how states would respond. Many have seen revenues fall amid fallout from the pandemic and have asked Congress for help to avoid cuts to services and more layoffs of first responders.
2. Joe Biden Picks Kamala Harris as Running Mate — Joe Biden named Sen. Kamala Harris of California as his running mate, picking his former Democratic primary opponent to be the first Black woman nominated for vice president by a major party. Harris, 55, is the first Black woman and the first person of Indian descent ever nominated for national office by a major political party.
3. Weekly Jobless Claims Drop Below One Million for First Time Since March — New applications for unemployment benefits dropped to seasonally adjusted 963,000 in the week ended Aug. 8, the Labor Department reported. Claims are down significantly from a peak of near seven million in March, but remain at historically high levels and higher than the pre-pandemic record of 695,000. President Trump signed an executive action Saturday that authorized states to extend a federally funded $300 in benefits and provide an extra $100 in state-funded benefits. States likely won’t start implementing the supplemental benefits for weeks, as they must apply for the federal funds and set up new programs.
4. Retail Sales Point to a Rocky Economic Recovery — Total retail sales rose a seasonally adjusted 1.2% last month from June, the Department of Commerce said Friday. That follows month-over-month gains of 8.4% and 18% in the preceding months, after retail sales plummeted 15% in April. Excluding more volatile categories like gasoline, motor vehicles and building materials, retail sales rose 1.4% in July, better than economists’ 1.1% estimate but slower than the 6% and 10% rates in June and May. Gains were strongest at electronics and appliance stores (up 23% from a month earlier), while sales at gas stations and clothing stores rose 6% and restaurant and bar sales increased 5%.

The week ahead — Economic data from Econoday.com: