• Sat. Oct 29th, 2022

Markets are reflecting muted optimism among investors that lawmakers will reach a deal on a slimmed-down relief package before the year-end holiday season

Dec 15, 2020

U.S. stock futures edged higher Tuesday as investors cautiously welcomed signs of progress in negotiations over an economic relief package in Washington.Futures tied to the S&P 500 rose 0.6%, suggesting the benchmark stocks gauge may open higher after falling for a fourth consecutive day on Monday. Futures for the technology-heavy Nasdaq-100 index ticked up 0.4%.A bipartisan group of lawmakers urged Congressional leaders on Monday to forge ahead with a $748 billion-spending package that would avoid the thorniest issues holding up a deal. Investors have been closely monitoring prospects for a fresh stimulus bill offering support to households and businesses hit by the Covid-19 pandemic. Congress is running out of time to strike a deal before the year-end holiday season.
Its very tight, said Hani Redha, a portfolio manager at PineBridge Investments. There are decent odds we will still get something in the lame-duck session, which would obviously be a great bridge over to the spring.
Ahead of the opening bell in New York, shares in
Apartment Investment & Management
tumbled 73%. The real-estate investment trust is due to be replaced by electric-vehicle maker Tesla in the S&P 500 index later this month.
Stocks have wavered in recent days amid signs that soaring Covid-19 cases and mounting restrictions in the U.S. and Europe are crimping the global economic recovery.
The market is having to deal with a lot of headwinds, said Mr. Redha. Both on the virus itself, the risk of tighter and tighter lockdowns, and uncertainty around any kind of additional stimulus in the U.S.
It will be a slower recovery without it, Mr. Redha said, referring to a new relief package.
Still, many money managers hope that vaccines, coupled with ongoing support from central banks, will allow the rally in stocks and corporate bonds to extend into 2021. Additional support from the U.S. government could offer more buoyancy to markets in what may be a difficult few months as death tolls rise and many businesses continue to suffer.
The jurys still a little bit out on exactly whats going to be passed here, said Lyn Graham-Taylor, senior rates strategist at Rabobank. The U.S. does need some more fiscal stimulus to see it through these winter months.
Treasury yields are likely to jump if U.S. lawmakers do pass a significant stimulus package, lifting growth, inflation prospects and the supply of bonds, Mr. Graham-Taylor added.
The yield on 10-year Treasury notes edged up to 0.898%, from 0.891% on Monday. Meanwhile the WSJ Dollar Index, which tracks the U.S. currency against a basket of others, slipped 0.1%.
Lawmakers working to pass a coronavirus-aid bill face two sticking points: aid for state and local governments and liability protections. WSJs Gerald F. Seib explains why these issues matter and what a compromise might look like. Photo: Drew Angerer/Getty Images
Data due to be published at 9:15 a.m. ET are expected to show that industrial production continued to expand in November on the back of strong auto demand. Growth is expected to have slowed last month, and overall output will likely remain below pre-pandemic levels.
In overseas markets, the regionwide Stoxx Europe 600 index edged up 0.1% as gains for auto makers and car-part manufacturers offset losses for retailers including Swedens
H&M Hennes & Mauritz.
Shares in
Volkswagen
rose almost 5% after the German car maker said late Monday that its supervisory board had agreed to reorganize the management board.
Chinas Shanghai Composite Index ended 0.1% lower in a mixed session for Asian stocks. Japans Nikkei 225 slipped 0.2%.
Chinas economic recovery continued apace in November, data from the National Bureau of Statistics showed, putting the worlds second-largest economy on a stronger footing as it approaches the end of a tumultuous year. Industrial output rose 7% from a year earlier, faster than economists were expecting.
Write to Joe Wallace at Joe.Wallace@wsj.com
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