White House $916bn Stimulus Deal Offer Deemed ‘Unacceptable’ By Democrats

Since the Covid-19 pandemic began, and governments began to take fiscal and monetary measures in response, markets have reacted significantly to any updates on potential new rounds of stimulus. Recently in the US, hopes have emerged of a smaller interim deal between Democrat and Republican lawmakers than the multi-trillion-dollar deal Democrats had initially hoped for. On Tuesday, the White House put forward a new $916bn package, which included $600 direct payments to Americans plus state and local government funding. However, it offered reduced funding for jobless benefits and the inclusion of liability protections for businesses - which had been a sticking point in previous negotiations, according to the FT.

House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer said in a joint statement that “the President’s proposal must not be allowed to obstruct the bipartisan Congressional talks that are underway.” They added that the proposed cut in unemployment insurance funding is ‘unacceptable’. The situation will be monitored closely by investors on Wednesday, as the passage of an interim deal before Christmas would be a significant relief.

A stimulus impasse is nothing new, however, markets have reacted positively this morning following Asia’s record close overnight. Vaccine progress has also helped sentiment with the UK administering their first doses yesterday. The FTSE100 is now above 6600 for the first time since March.

Equifax delivers impressive business update, DoorDash prices IPO above expectations

All three major US stock indices posted solid days on Tuesday, with gains of between 0.3% and 0.5%. Among the S&P 500’s 11 sectors, energy stocks led the way with a 1.6% gain, partly making up the losses sustained on Monday. Overall on Tuesday, six S&P 500 sectors were in the green, and five in the red. Leading the S&P 500 was credit checking agency Equifax, which jumped by 7.8%, following a business update described by JPMorgan analysts as “impressive.” The update also led to an upgraded rating from Barclays. Guidance provided for Q4 2020 and full-year 2021 came in well above analyst expectations, with projected 2021 revenue growth of 6%.

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