Wall Street opened a little lower on Thursday as we await the FDA’s decision on the Pfizer vaccine and US lawmakers push ahead with stimulus talks.
Following statements earlier this week, the decision to grant emergency use authorisation to the Pfizer/BioNTech vaccine looks a foregone conclusion and once it comes, any upside for the market may be relatively brief. The risks are firmly to the downside, especially as the UK and Canadian authorities have already signed off, but the odds of any issues are very slim.
The stimulus talks are far from a foregone conclusion. Both sides appear to be getting closer on what it will contain and more sacrifices from both will likely be needed in order to get a slimmed-down version through before the end of the year and avoid a cliff-edge scenario. Will a fiscal deal be reached in time for Christmas? That would without doubt be a huge Christmas gift for the American public. The US is groaning under the weight of the Covid pandemic, which is running rampant in many parts of the country. However, politics is again getting in the way, as Democrats and Republicans continue to square off over a massive recovery package. Talks are continuing, and the latest proposal, a USD908 billion plan, was put on the table by a bi-partisan group of lawmakers.
US lawmakers have bought themselves another week in their desire to attach any relief package to a spending bill and avoid a partial government shutdown over the festive period. But that doesn’t necessarily mean that they will be able to bridge their remaining differences. I do believe that something will pass that sees the country through to the new administration but negotiations will have to begin again almost immediately to avoid a similar situation early in the new year.