The Dow Jones rallied on Tuesday, as Jerome Powell joined Donald Trump and Nancy Pelosi in calling for more coronavirus stimulus.
The Dow Jones rallied on Tuesday, as investors continue to follow the carrot of stimulus talks. With Nancy Pelosi, Jerome Powell, and Donald Trump all crying out for economic stimulus, Wall Street remains convinced a fiscal package is on the way.
It was a soft day in the major U.S. indices, although all three major benchmarks recovered by the afternoon. The Dow, S&P 500, and Nasdaq rose between 0.3% and 0.6%.
Today brought some interesting economic data, as the U.S. trade balance continues to worsen. The deficit now stands at $67 billion, the worst in 4 years. JOLTS job openings were worse than forecast but still held above 6 million.
Donald Trump’s health appears to be less of a concern today, as headlines suggested the president is back in the White House and doing well. With Joe Biden leading in the polls by a wide margin, Trump is clearly anxious to get back on the campaign trail. Watch the video below:
Investors are laser-focused on the progress of stimulus talks in Congress. One thing that all parties seem to agree on is that it is urgently needed.
Donald Trump tweeted over the weekend about the need for fiscal support, and on Tuesday, Federal Reserve Chair Jerome Powell echoed that sentiment.
Fed Chair Powell reiterates that while the economy has performed well the outlook remains uncertain and that more fiscal stimulus is required to ensure the recovery continues. His emphasis that doing little on this front is worse than doing too much appears to be a plea for Washington to hammer out another deal irrespective of current tensions.
Watch the video below for the Fed Chair’s full remarks:
House Speaker Nancy Pelosi is leading negotiations for the Democrats, and she jumped on the Federal Reserve’s support for stimulus to make the following remark in a press release:
Chairman Powell’s warning could not be more clear: robust action is immediately needed to avert economic catastrophe from the devastation of the coronavirus pandemic.
As it stands, the bulk of the resistance comes from Republicans, who are eager to avoid another round of turbo-charged unemployment benefits. The combination of Trump and Pelosi being at least partially on the same team may prove to be an irresistible force. Wall Street remains convinced that a deal is coming.
A mixed day for the Dow 30 saw several of its big names struggling. Boeing plunged around 3% after it released a forecast demonstrating markedly weaker demand for its aircraft. Markets should be well prepared for this, given the recent mass layoffs at the aerospace contractor.
Watch the video below for Jim Cramer’s take on the crisis facing the aviation industry:
Apple and Microsoft fell into the red on a less buoyant day for the tech sector. Apple lost 1.3% while Microsoft slipped 0.8%.
Nike was the top performer, rallying 1.8%.