US equities scratched out another gain overnight after recovering from intraday losses as the stalemate persist on fiscal stimulus negotiations.
House Democrat Leader Pelosi indicated a House vote would proceed despite being “still far apart” from Republicans.
That House vote symbolises the stalemate: without Republican agreement, it has no chance of passing the Senate but gives Democrats a platform for the Presidential election.
Things remain fluid; we all know what is at stake if this deal does not go through before markets sundown, it is unlikely to be pretty ugly.
But will have more to say later, possibly by Asia close. Fingers crossed, we finish the week on a positive note as the US stimulus deal gets sent to Senate for a rubber stamp.
Even with the shift down in risk appetite since negative headlines, it is somewhat lacklustre, suggesting investors are growing a little tired of this headline back and forth.
I believe investors are very reluctant to give up their overall bullish bias even when positive drivers such as the ultra-dovish Fed and the prospects for vaccines and new fiscal stimulus get questioned.
This makes a lot of sense to me as all three of them will likely remain critical supportive factors in the medium term, even if they temporarily disappoint in the short term.
Investor mindset should remain one of looking for buying opportunities for riskier assets while adding more stocks.
I am not a political scientist, but merely looking at the numbers that could be stacked against the deal anytime soon. Only one-third of the Senate is up for re-election in November, of which 23 seats are Republican.
At this point, only four of those seats are genuinely at risk of falling into Democratic hands. That means most Republican senators have no trouble standing pat.
International markets analysis and insights from Stephen Innes, Chief Global Market Strategist at Axi