October 9, 2020
With all eyes on the Treasury Secretary and Speaker of the House to reach a deal on additional economic stimulus, the U.S. equity markets are on track for their best week since August. Yesterday, the Dow and S&P 500 gained 122.05 and 27.38 points, or +0.43 and +0.80%, respectively. The NASDAQ also climbed 56.38 points, or +0.50%. Each of the 11 sectors of the 11 sectors of the S&P 500 gained on the day, with the energy, utilities and real estate sectors performing the best.
The Department of Labor reported weekly new jobless claims yesterday, showing a worse-than-expected 840,000 American workers filed for first-time unemployment insurance benefits last week. Continuing claims dipped back below the 11 million mark for the first time since late March.
While the White House and the House has agreed to aspects of a new comprehensive stimulus package – totally nearly $1.6 trillion – the two sides are apart on aid to specific sectors such as airlines. The White House has specifically identified the airlines as even needing their own stand-alone bill. The major stumbling stone seems to be the $400 billion of aid that Speaker Pelosi wants for those cities/states so badly damaged by recently rioting and looting.
“A compromise on a big stimulus package n Washington could potentially deliver another October surprise, but the odds are against it as election day approaches, Jeffrey Buchbinder, LPL Financial Equity Strategist, said in a note. “The optics of getting nothing done aren’t great on either side, and there are a lot of close Senate races right now, suggesting there still may be a glimmer of hope for a deal by November 3.”