- US stocks wavered on Friday as new commentary from the White House cut into hopes for pre-election stimulus.
- While House Speaker Nancy Pelosi indicated a bill could still be approved before Election Day, Treasury Secretary Steven Mnuchin noted that “significant differences” remain between each side’s respective proposals.
- The tepid session led the S&P 500 to post its first weekly loss in three weeks.
- Oil sank after Libya announced it will lift production.West Texas Intermediate crude sank as much as 2.6% to $US39.57 per barrel.
- Watch major indexes update live here.
US equities fluctuated to close out a tepid week as investors digested the latest updates to plodding stimulus deliberations.
Commentary from White House officials and House Speaker Nancy Pelosi drove indexes’ wavering between daily losses and gains. Pelosi told MSNBC on Friday that stimulus can still be passed before Election Day “if the president wants to,” and that the two parties are still writing up a compromise. Yet President Donald Trump told reporters he doesn’t want a relief measure to bail out Democratic-leaning states, and Treasury Secretary Steven Mnuchin noted that “significant differences” remain between each side’s respective proposals.
“We’ve offered compromises, the Speaker on a number of issues is still dug in. If she wants to compromise, there will be a deal,” Mnuchin said.
Here’s where US indexes stood at the 4 p.m. ET market close on Friday:
- S&P 500:3,465.39, up 0.35% (11.9 points)
- Dow Jones Industrial Average: 28,335.57, down 0.1% (27.4 points),
- Nasdaq composite:11,548.28, up 0.37%
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Even if Democrats and the White House reach an agreement, Senate Republicans are set to ignore the bill on grounds that it costs too much. Democrats blocked Republicans’ $US500 billion “skinny” bill on Wednesday, leaving both sides at a stalemate for passing new relief.
Some Wall Street strategists have pushed their stimulus forecasts past the election and see a possible Democratic sweep yielding an even larger relief bill in early 2021. The presidential election’s outcome is “the biggest variable” for stimulus moving forward, Goldman Sachs said earlier in the week, adding that talks would continue since “neither side benefits from ending them.”
The choppy session led the S&P 500 to post a weekly loss for the first time in four weeks. Energy and tech stocks dragged the most on the index. Communications and real estate names outperformed.
Thursday night’s presidential debate was decidedly less market-moving than the first, with President Donald Trump taking a less-combative approach toward former Vice President Joe Biden. The two discussed a variety of topics including the coronavirus pandemic, healthcare, and race relations, but futures barely moved throughout the hour-and-a-half event.
IHS Markit’s gauge of US business activity accelerated in October to 55.5 from 53.4, according to a Friday release. The reading marks the fastest pace of growth since February 2019 and bolsters arguments that the nation’s economic recovery is faring well despite the stimulus holdup. Readings above 50 indicate growth, while those below the threshold point to sector contraction.
“On the downside, the employment indexes for both the manufacturing and services surveys weakened between September and October,” JPMorgan economist Daniel Silver said. “But in more positive news, the expectation measures picked up, including a jump in expectations for activity for the services PMI.”
Gilead shares leaped after its remdesivir compound became the first drug authorised by the Food and Drug Administration to treat COVID-19.
Intel sank after weakness in its server business soured otherwise positive earnings results. The company forecast the decline to last through the fourth quarter but still raised its full-year guidance. Bank of America analysts downgraded the chipmaker to “underperform” and lowered their price target to $US45, implying a 17% dive from Thursday’s close.
Bitcoin slowed its roll after rallying to its highest point since June 2019 on Thursday. The cryptocurrency’s 14-day Relative Strength Index leaped above 80, signalling the token is overbought after rallying 10% into Friday.
Spot gold fell slightly to $US1,894.48 per ounce at intraday lows before rising back above its $US1,900 support. The US dollar dipped against peers and Treasury yields fell.
Oil sank after Libya announced it will boost production. West Texas Intermediate crude slid as much as 2.6% to $US39.57 per barrel. Brent crude, oil’s international benchmark, fell 2.3% to $US41.50 per barrel at intraday lows.
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