It has been a decent week so far in the markets and stocks are slightly in the green again as we near the final opening bell of the week on Wall Street.
There’s plenty of enthusiasm around at the moment, whether from vaccine results or the stimulus talks on Capitol Hill. For the first time this year, things are looking up and that optimism can be felt throughout these markets.
They are running low on fuel a little at this point though, with so much of that positivity now priced in. While talks getting underway over another relief package in the US is promising, it still feels there’s a significant divide that needs to be overcome. The urgency to do so and pass something alongside a spending bill – needed to avoid a partial shutdown on 11 December – is also encouraging.
There appears to be some progress towards a stimulus bill, as a bipartisan group of US senators put a package worth USD908 billion on the table earlier in the week. The proposal represents a compromise between the Democrats and Republicans, after months of an impasse. Still, it is unclear if the White House and Republican Senate Majority leader Mitch McConnell will support this latest proposal.
The timing of the jobs report today is very interesting. A bad report could be what the doctor ordered, piling additional pressure on lawmakers to get a deal done, even an imperfect one that sees the country through the holiday period and to the end of January, at least.
A strong jobs report may not be well-received if it’s used as a tool to negotiate down any relief effort by Mitch McConnell. The Senate Majority Leader made similar comments last month and the concern could be that a seemingly strong report could remove some of the urgency needed to get this over the line before some support measures expire at the end of the year.