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The market's big struggle right now, its driving narrative, is between COVID-19 and the prospects of a new, multitrillion-dollar round of stimulus.
Stocks have rebounded over the past two days, after an apparent improvement in the president's COVID-19 symptoms merited his discharge from Walter Reed National Military Medical Center.
On the coronavirus front, investors seem to have digested the bigger picture: The virus remains a severe threat and a major disruptor, but death rates are declining right now, better therapeutics are available, and several vaccine candidates are on the horizon.
Against this backdrop, we've seen no convincing signs of progress in House Speaker Nancy Pelosi's and Treasury Secretary Steven Mnuchin's negotiations over a fresh multitrillion-dollar round of stimulus. The rally lost some significant "steam" on Tuesday after U.S. Federal Reserve Chair Jerome Powell and Speaker Pelosi stressed the need for fresh stimulus, then began a much steeper dive minutes after Trump said negotiations were off until after the November election.
White House-watchers and Wall Street insiders opined that Trump's abrupt move was likely a negotiating tactic, not the end of the stimulus road.
That's established the pattern investors will have to contend with: pullbacks, driven by stimulus worries, will be promptly followed by rallies, as coronavirus fears ease. Rinse and repeat, until further notice.
I'll tell you what I think of our stimulus chances, where the market will go next, and most importantly, the one profitable play you can make right now… Full Story