October 21, 2020
In a volatile day of trading, the U.S. equity markets posted solid gains albeit well off the highs of the day. As we have seen it many times in the recent past, the final hour of trading sees most of the action. The Dow, while reaching a gain of more than 300 points mid-day, finished up 113.37 points, or +0.40%. The S&P 500 and NASDAQ followed suit, gaining 16.20 and 37.61 points, or +0.47% and +0.33%, respectively. Without a doubt, Wall Street is paying attention to the negotiations over additional COVID stimulus in Washington.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will try again today to close the remaining gaps in their talks. Negotiations continued past Pelosi’s deadline of yesterday with signs of progress toward a deal sometime before the election. “Today’s deadline enabled us to see that decisions could be reached, and language could be exchanged, demonstrating that both sides are serious about finding a compromise,” wrote Speaker Pelosi to fellow Democrats.
There is a potential split among Senate Republicans over the size and purpose of any future relief bill. Senator Mitt Romney has voiced opposition to aid package in the range of $1.8 trillion. At last sight, Mnuchin had put forward a bill worth $1.88 trillion, and Pelosi wants $2.2 trillion.
Meanwhile, Senate Majority Leader Mitch McConnell has pressed forward with a more targeted bill in the $500 billion range, warning the White House not to rush into an agreement before the election.
The investment markets wait.