STOCKS SLIDE SHARPLY AFTER TRUMP PUTS AN END TO FISCAL STIMULUS NEGOTIATIONS UNTIL AFTER ELECTION
Stocks are notching a nasty intraday reversal to the downside in response to unexpected headlines from US President Trump. POTUS just came out rejecting the $2.2-trillion coronavirus aid package proposed by Democratic House Speaker Nancy Pelosi, which is costlier than the $1.6-trillion stimulus deal set forth by Treasury Secretary Steven Mnuchin on behalf of the Trump administration. Fiscal aid to state and local governments stands out as the largest sticking point leading to the breakdown in stimulus negotiations.
S&P 500 INDEX PRICE CHART WITH NASDAQ, DOW JONES OVERLAID: 5-MINUTE TIME FRAME (05 OCT TO 06 OCT 2020)
Chart created by @RichDvorakFX[4] with TradingView[5]
The S&P 500 - along with other popular stock market indices like the Nasdaq and Dow Jones - have been ripping higher since the last week of September amid rekindled fiscal stimulus optimism. Following the latest collapse in stimulus talks, however, stocks have begun declining sharply.
Not only have fiscal stimulus negotiations just collapsed, President Trump also stated that his team will not resume coronavirus aid talks until after the election. This further delays the delivery of much-needed fiscal stimulus to the US economy, which Fed Chair Powell has desperately pleaded to politicians for.
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-- Written by Rich Dvorak[7], Analyst
