Stocks Fall As Coronavirus Stimulus Talks Stuck In A ‘Stalemate’

TOPLINE

Stocks finished slightly lower on Thursday as U.S. lawmakers remained at odds over the next coronavirus relief bill and weekly unemployment claims came in below a million for the first time since the coronavirus crisis began.

KEY FACTS

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Investors are still expecting another stimulus package will eventually get passed: “The market still wants, and very much expects, an actual stimulus bill to be signed,” according to Tom Essaye, editor of the Sevens Report. “Looking forward, stimulus bill negotiations will continue, but [Trump’s] executive orders (combined with recently solid data) likely reduce the urgency to get something done, so realistically the market will be looking for an agreement over the next few weeks.”

Chief critic

“Seeing initial claims dip below 1 million is a positive sign that layoffs are easing, but we’re far from celebrating a steady recovery,” says Glassdoor senior economist Daniel Zhao. “With no sign yet of a new [coronavirus] relief package, the question is whether sheer momentum can keep pushing the economic recovery forward in this historically deep crisis.”

What to watch for

Markets also grappled with ongoing U.S.-China tensions, after Secretary of State Mike Pompeo hinted that the United States could take further action against Chinese tech companies. Pompeo said that President Trump’s executive orders signed earlier this month—to ban U.S. transactions with Chinese-owned apps WeChat and TikTok—could be “broader” than just those two companies.

Key background

The market finished higher on Wednesday amid optimism for a coronavirus vaccine, with gains being led by a strong rally in tech stocks. The S&P neared a new record close after jumping 1.4%, finishing the day just below its previous high (set back in February) of 3,386.15.

Further reading

S&P 500 Nears New Record High Amid Coronavirus Vaccine Optimism (Forbes)

Unemployment Claims Clock In Under 1 Million For First Time Since Coronavirus Crisis Began (Forbes)

Stocks Turn Negative After Russia Claims To Have World’s First Coronavirus Vaccine (Forbes)

Goldman Predicts ‘At Least One’ Vaccine Approval Before The End Of 2020, Raises GDP Estimate (Forbes)

Dow Jumps 350 Points After Trump Signs Executive Orders To Extend Coronavirus Relief (Forbes)

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