Traders have doubted a deal before the November election, injecting uncertainty and volatility into markets
Stock futures opened lower Wednesday evening, extending regular-session declines, as traders continued to fixate on dimming prospects of more stimulus before the election. Third-quarter corporate earnings results rolled in mixed.
Shares of Tesla gained more than 2.5% in late trading on Wednesday, after the electric vehicle-maker posted a fifth straight quarterly profit and reaffirmed its goal to hit a half-million vehicle deliveries this year. Chipotle, on the other hand, slid overnight after posting thinning margins as costs associated with a surge in delivery demand weighed on profitability.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke again Wednesday afternoon to try and hash out a deal for more virus-relief aid, and are expected to discuss further on Thursday, according to Pelosi’s spokesperson Drew Hammill. Based on their conversation Wednesday, “Differences continue to be narrowed on health priorities, including language providing a national strategic testing and contract tracing plan, but more work needs to be done,” Hammill said. The White House’s last public offer stood at around $1.88 trillion for a stimulus proposal, versus the $2.2 trillion plan put forth by House Democrats.
Traders have increasingly doubted that a deal might get inked and passed before the November election, injecting further uncertainty and volatility into markets this week. Pelosi told Bloomberg News on Tuesday that a deal would need to be written by the end of the week to have a shot at passing before the election. White House Chief of Staff Mark Meadows, for his part, told Fox Wednesday morning that negotiators were looking to get “some kind of deal in the next 48 hours or so.”
On Thursday, the Department of Labor is set to release its weekly report on new jobless claims, which is expected to show another 870,000 filed for first-time unemployment insurance benefits. An increasing number of individuals are expected to have exhausted state unemployment benefits and rolled onto longer-term pandemic-related assistance programs, underscoring the ongoing toll of the virus on the economy.
Other economic data releases will include the National Association of Realtors’ monthly existing home sales report, Conference Board’s monthly Leading Index. These, however, are expected to take a back seat, with traders continuing to focus more heavily on the developments around stimulus talks, as well as the final presidential debate between President Donald Trump and former Vice President Joe Biden.
Despite a number of economic and earnings releases on Thursday, the only thing that will matter is the ‘sound and fury’ of the debate and the stimulus talks, BTIG strategist Julian Emanuel said in a note Wednesday.