The markets today Friday, appear poised to open mixed with the S&P 500 and NASDAQ in the green but the DOW in the red at time of writing. Most European indices and the safe havens of gold and silver are also in the green. These indicators can change during the runup to the opening bell and in this volatile environment, substantial changes before and after the bell would not be surprising. Given the number of factors at play today, the DOW could very possibly edge into the green before opening or during the morning.
This follows yesterday’s trading in which the DOW, NASDAQ and S&P all closed down, driven by bank reports, vaccine doubts, an increase in weekly jobless claims, fears of COVID 19, a drop in New York State manufacturing and the Washington stimulus follies,
The mixed outlook for the market parallels the mixed outlook for new stimulus. Yesterday, International Monetary Fund Managing Director Kristalina Georgieva insisted that the United States will bring in a new economic stimulus package. In her projection, as reported by CNBC, she said this will help reduce global economic uncertainty and that she has ‘no doubt’ that the U. S. will implement a new package.
That counterpoints with the current Washington scene. U. S. President Donald Trump had been willing to go up from his offer of $1.8 trillion in a relief deal, but Republicans trashed the idea, according to a Reuters report.
“We like stimulus, we want stimulus and we think we should have stimulus,” Trump said, according to the report.
Stating the obvious, Georgieva said that such a stimulus would be very positive ‘whenever it’s introduced’, according to the CNBC report.
She added that quicker implementation would “…provide a boost to certainty and certainty is something we do need in this crisis.”
Geoergieva may not get her wish immediately. The stalemate over stimulus appears very much entrenched in Washington, according to Chris Beauchamp, Chief Market Analyst at IG Group, a London stock firm. “Steve Mnuchin’s comments about a US stimulus bill now looking unlikely before the election were perfectly placed to unseat a market that had rallied hard on hopes of such stimulus, perhaps naively,” Beauchamp says.
Beauchamp suggests that “… this looks very much like both sides are going through the motions so as to appear reasonable to floating voters, as all eyes turn to the impending election.”
All of this means a continued mixed outlook over the market in the meantime. A rally would only occur if there were some particularly good news about stimulus or vaccines.