Stocks crawled upward on Friday, as the prospects of a broad coronavirus relief package brightened with reignited negotiations in Washington–despite tweets from Trump Tuesday afternoon in which he claimed to have ordered his representatives to cease talks with House Speaker Nancy Pelosi (D-Calif.) entirely.
The Dow Jones Industrial Average climbed 161 points, or nearly .6%, on Friday, while the S&P 500 added .9%, and the tech-heavy Nasdaq jumped 1.4%.
The early afternoon news that Secretary Steven Mnuchin and Speaker Pelosi had resumed stimulus talks buoyed stocks on Friday, but a midday phone call between the two resulted in no further compromise.
That marks a stark reversal from a set of tweets President Trump sent out on Tuesday afternoon, when he said, “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.”
In a press briefing Thursday morning, Pelosi said she would not support piecemeal bills for coronavirus relief—including one with payroll support for airlines—without a comprehensive stimulus package.
Meanwhile, shares of Gilead–the biotech firm behind remdesivir, the coronavirus treatment administered to and lauded by Trump, ended the day up about 1% after the firm revealed Thursday that its drug speeds up Covid-19 recovery times.
Shares of semiconductor firm Xilinx surged 14% after the Wall Street Journal reported that chipmaker AMD is nearing a deal to purchase the firm that could be worth more than $30 billion.
“The economy’s growing, but early signs of weakness are surfacing. Our recommended treatment is more fiscal aid to help struggling small businesses, pandemic-prone sectors and unemployed consumers,” says Lindsey Bell, a Chief Investment Strategist for Ally Invest. “Unfortunately, Congress and the White House are still in a stalemate, and we may be in for some year-end economic struggles that could give the stock market some trouble. Overall, we still remain optimistic about the market in the long-term.”
The Dow and S&P each gained about 2% through Thursday close of this week, as markets weathered ongoing election uncertainty and near-endless back and forth over a broad-based stimulus package before the November election. Negotiations urgently picked up late last month after a months-long standstill, and experts have since been saying that some sort of broad coronavirus relief is necessary for a sustained economic recovery. The back and forth in Washington over the package, however, has many forecasters now predicting that odds are best a comprehensive stimulus bill will come after the November election.
Earnings season kicks into high gear next week, with most major banks set to report starting Tuesday. JPMorgan Chase and Citigroup are among the first to release; they’re set to report earnings before the market opens on Tuesday. Delta Air Lines, Charles Schwab and Johnson & Johnson earnings are also slated for Tuesday, with Bank of America, Wells Fargo and Goldman Sachs scheduled for Wednesday.
Stimulus Update: Pelosi And Mnuchin Negotiations Back On, Amid Reports White House Raises Offer To $1.8 Trillion And Trump Suggests He Could Go Higher (Forbes)
Pelosi Says No Standalone Stimulus Bills—Including Airline Aid—Without Comprehensive Deal (Forbes)