After fresh talks on Tuesday with Secretary Steven Mnuchin, Pelosi said that she’s “optimistic” about the stimulus aid. The market has been closely watching the development as analysts eagerly await a fresh stimulus to boost economic recovery.
It’s hardly two weeks to the U.S. Presidential Elections as Wall Street remains on the edge with hopes of yet another fiscal stimulus. Investors remain confused with the ongoing talks between the White House and House Democrats with no sight of end result. However, on Tuesday, October 20, House Speaker Nancy Pelosi showered some optimism saying both sides made progress in negotiations on fiscal stimulus.
“Hopefully by the end of the day, we’ll know where we all are. But I’m optimistic,” said Pelosi. President Trump has already postponed stimulus talks between until after the elections. However, the Democrats have been keen on pushing the envelope.
Last Sunday, October 18, Pelosi gave the Trump administration a 48-hour deadline to reach a consensus for the new aid before the November 3 election date. Interestingly, talking about this deadline Pelosi added:
“It isn’t that this day was a day that we would have a deal, it was a day that we would have our terms on the table to be able to go to the next step”. On Tuesday, Pelosi had a 45-minuted discussion with Treasury Secretary Steven Mnuchin. Briefing the same, Mark Meadows, chief of staff for the White House told CNBC:
“We made good progress. We still have a ways to go, but I would say that the conversations today were productive enough to continue to have discussions tomorrow”.
As per the latest data from John Hopkins University, the U.S. could be possibly looking at a third-wave ahead. In such a case, markets are eagerly eyeing another fiscal stimulus to keep the economy going.
Dow Jones Jumps 100 Points after Opinion on Stimulus Voiced by Pelosi
The broader markets remained upbeat on Tuesday after Pelosi’s optimism about the stimulus aid. The Dow Jones Industrial Average (INDEXDJX: .DJI) jumped 100 points or 0.40% higher closing at 28,308. The Nasdaq Composite (INDEXNASDAQ: .IXIC) surged 0.3% closing at 11,516.49 while the S&P 500 (INDEXSP: .INX) gained 0.4% closing at 3443 levels.
Analysts say that fiscal stimulus remains the most important thing for America at this point. David Wagner, portfolio manager at Aptus Capital Advisors said:
“Fiscal stimulus is the most important thing to the market right now. You’re seeing that with the market trading up and down each day just on the progression of the stimulus talks. The American people need stimulus right now; they’re hurting right now”.
Andrew Smith, the chief investment strategist at Delos Capital Advisors also reiterated this view. He noted that a NO stimulus deal might not send the economy into recession, however, it can significantly slow the economic recovery.
In the on-going discussions, the House Democrats have asked for a $2.2 trillion stimulus. However, the White House has stretched it to $1.9 trillion from the previous $1.6-trillion proposal. On the other hand, the COVID-19 vaccine developments continue ahead. This week ahead, pharmaceutical giant AstraZeneca plc (LON: AZN) is likely to resume its vaccine trial in the U.S.
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