Market U-Turns on Stimulus Hopes

The stock market is up nicely today. The market got dinged yesterday afternoon after President Trump withdrew from any negotiations regarding a fiscal stimulus. In an apparent U-turn, the president today Tweeted support for stimulus.

Trump urged Congress to approve airline payroll support, saying that money and aid for small business could be paid for with unused funds from the previous stimulus. Trump also pushed for another round of $1,200 stimulus checks for Americans.

The market is quite pleased. The Dow has been up as much as 550 points today. The small-cap Russell 2000 is up close to 3%. (The index is tilted towards cyclicals.) Growth and Value are up nearly the same. RPM International is up about 3%. The company reported good earnings this morning.

The Fed released the minutes of its last meeting this afternoon. In it, the Fed showed concern that the economy is slowing down and that will get worse without any stimulus.

The Fed’s minutes are a study in indefinite pronouns (many, some, a few). Today’s minutes said, “Many participants noted that their economic outlook assumed additional fiscal support and that if future fiscal support was significantly smaller or arrived significantly later than they expected, the pace of the recovery could be slower than anticipated.”

Posted by on October 7th, 2020 at 2:49 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.