In the early morning of the 8th Beijing time, US stocks closed higher on Wednesday, and the Dow hit its biggest daily gain since July. Trump called for the introduction of independent rescue measures for the aviation industry and small businesses, making the market expect that Congress may approve a smaller stimulus package.The minutes of the Fed meeting stated that the lack of further fiscal stimulus measures would jeopardize the economic recovery. The Dow rose 530.70 points, or 1.91%, to 28,303.46 points; the Nasdaq rose 210.00 points, or 1.88%, to 11364.60 points; the S&P 500 index rose 58.50 points, or 1.74%, to 3,119.45 points.
Trump called on the rescue of the aviation industry and small businesses, and supported the issuance of $1,200 stimulus checks to taxpayers. Driven by this news, the aviation sector generally rose.
Trump’s suspension of fiscal stimulus negotiations on Tuesday frustrated market sentiment. Bridgewater Fund founder Rui Dalio said that Trump’s move to suspend fiscal stimulus negotiations yesterday “is definitely not a good thing” and will cause “serious negative effects” on the economy. He said: “Regardless of the size of the fiscal stimulus package, it will be a lot of money”, and those who cannot get this funding will face “huge pressure”.
White House economic adviser Kudlow said on Wednesday: “I think what President Trump said yesterday was’we have too much disagreement on a large-scale program.’ But what about a smaller plan? What about an industry-specific plan? ? Since they are willing to make concessions on continuous solutions to keep the government open, why not do it again?”
And Bill Ekman of Pershing Square Capital Management Company said in a tweet directed at Trump and Pelosi: “Mr. President, Madam Speaker, you both agree to the first $1.6 trillion stimulus package, why not Pass it now, and leave the disputed US$400 billion to discuss after the election? That way, we can now help Americans in need.”
Stephen Innes, chief global market strategist at Axi, said that Trump is trying to regain control of the campaign. “Obviously, the president wants to regain control of the campaign and kick the ball back to the Democratic Party through his $1,200 stimulus check policy. A major fiscal stimulus will be determined after the general election. The best outcome the market can expect is financial support for individuals, which is conducive to risk sentiment.”
Trump urges rescue aviation industry and small businesses
US President Trump announced on Tuesday afternoon that he would suspend negotiations with the Democratic Party on a new round of economic stimulus package for anti-epidemic relief. However, he immediately stated on social media that he was willing to sign some independent stimulus including support for the aviation industry salary protection plan. Measures.
Trump wrote on Twitter: “The House of Representatives and the Senate should immediately approve US$25 billion for aviation industry salary support, and US$135 billion for small business salary protection programs. Both expenditures will be covered by the Coronavirus The unused funds under the Cares Act are paid in full. With this money. I can sign now!”
Trump also added that he is “prepared to sign immediately” an independent bill to issue another round of stimulus checks for $1,200 to taxpayers.
On Tuesday afternoon, Trump tweeted that he instructed his representatives to “stop negotiations until after the election.” Trump predicts that he will win the election and will “pass a major stimulus bill aimed mainly at hardworking Americans and small businesses.”
Previously, investors had weak hopes that members of Congress could successfully pass a new round of comprehensive fiscal stimulus plan before election day on November 3. Although the two sides failed to bridge their differences over the plan, Finance Minister Mnuchin and Speaker of the House of Representatives Pelosi held regular negotiations on the agreement in the past week. Democrats in the House of Representatives recently proposed a plan of US$2.2 trillion, while Mnuchin’s plan is about US$1.6 trillion.
Even before Trump called a halt to fiscal stimulus negotiations on Tuesday afternoon, Eurasian Group analysts believed that the probability of passing the stimulus package before the election was only 20%.
Fed minutes: lack of further fiscal stimulus measures will jeopardize economic recovery
The Federal Reserve announced on Wednesday the minutes of its September 15-16 FOMC monetary policy meeting. The minutes of the Fed meeting show that Fed officials worry that if there is no further government fiscal stimulus measures, the pace of US economic recovery will be at risk.
The meeting discussed the economic prospects extensively. FOMC members said that the economic performance was better than expected due to the financial assistance provided by the US government.
The minutes show that another outbreak of the new crown epidemic poses risks to economic recovery. Fed officials worry that the current US government’s financial aid measures are not enough, and many officials expect more financial aid measures to come. Many participants said that if future financial support is much less than their expectations, or much later than their expectations, the pace of recovery may be slower than expected. Some participants also believed that the lack of further financial support will exacerbate the economic difficulties of ethnic minorities and low-income communities.
According to the expected assumptions given by the FOMC staff regarding the US economic outlook, the Trump administration will also provide more financial assistance in 2020.
It is worth noting that Trump just announced on Tuesday that he rejected the economic stimulus proposal put forward by the Democratic Party and ordered his representatives to stop negotiations until the end of the presidential election. And just a few hours ago, Fed Chairman Powell reiterated his call on the US government to take more economic stimulus measures to support the most vulnerable people in the US.
The minutes show that if the new crown epidemic in the United States worsens, it will pose a risk to the prospects for economic recovery. The long-term impact of the epidemic on the labor market has made some officials worried.
Some members believe that it is appropriate to evaluate bond purchases at many meetings in the future, and that forward guidance is not an unconditional commitment.
The minutes showed that most participants supported the provision of clearer results-based forward-looking guidance for the federal funds rate. However, participants believed that, given that long-term interest rates are at very low levels, it seems that there is no need to strengthen forward-looking guidance, and there is not much room for further downward pressure on yields. Strengthening forward guidance may limit the flexibility of the committee for many years.
The minutes also show that highly accommodative financial market conditions may lead to excessive risk-taking and increased financial imbalances. Several participants pointed out that small and medium-sized banks may face pressure to default.
Powell: The US economy needs more financial support measures
A few hours before Trump stopped negotiations, Fed Chairman Powell issued his strongest voice so far, urging lawmakers to formulate fiscal stimulus plans to promote economic recovery. He said that if monetary policy and fiscal policy continue to work side by side to provide support to the economy until the economy is clearly out of trouble, the US economic recovery will be “stronger and faster.”
Powell said on Tuesday that the U.S. economy needs more radical fiscal and monetary stimulus measures to achieve economic recovery. He said that economic recovery still has a long way to go.
Powell said that the lack of support may “result in weak economic recovery and cause unnecessary difficulties for households and businesses” and suppress the economic recovery that has rebounded faster than expected so far. Powell added: “In contrast, the current risk of providing excessive financial support seems to be less than the risk of insufficient support.”
Fundstrat Washington policy strategist Tom Block said: “The Fed Chairman Powell has stated that we need more fiscal stimulus. Trump did not follow the Fed Chairman’s advice, and the market does not like to go against the Fed. I will not say that fiscal stimulus has been done. It’s impossible, but it’s a very negative sign, and it’s likely to be postponed until after the election.”
Cleveland Federal Reserve Chairman Loretta Meester said on Tuesday night that the end of stimulus negotiations means that the US economic recovery will be “much slower” than originally expected.
Fauci: The number of coronavirus deaths in the United States this winter may reach 400,000
Fauci, director of the National Institute of Allergy and Infectious Diseases, said that the current epidemic in the White House could have been avoided. He also warned again that if the United States fails to comply with public health guidelines, the number of deaths from the coronavirus in the United States may reach 300,000 to 400,000 by this winter.
Fauci predicted in this spring that if the United States does not comply with public health guidelines, 200,000 people will die from coronavirus infections.
On the 6th of this month, Fauci said that unfortunately the current number of deaths in the United States has exceeded 210,000. If the United States still does not comply with public health guidelines this autumn and winter, the number of deaths in the United States will reach 300,000 to 400,000. . If this becomes a reality, it will be a tragedy.
Fauci once again called on all Americans to respect science and earnestly observe basic epidemic prevention measures. And said that the current number of new confirmed cases in a single day in the United States is still as high as about 40,000. The United States did not control the epidemic to a low level this summer, which will lead to more infections in this autumn and winter. Fauci also said that the recent epidemic in the White House could have been avoided, and the epidemic in the White House proves that the coronavirus epidemic is not a hoax.
The US Congress released an antitrust investigation report on Tuesday, which determined that the four major technology companies, including Apple, Google, Amazon and Facebook, had abused their dominant market positions.
JetBlue Airways, United Continental Airlines, American Airlines Group, Delta Air Lines, Southwest Airlines and other airline stocks generally rose. The US$25 billion employment aid for the aviation industry is expected to be approved.
Barclays, Citigroup, Bank of America, Wells Fargo, JP Morgan Chase and other bank stocks rose.
Boeing’s stock price rose, and the US FAA released its proposed Boeing 737 Max pilot training program.
Gilead Science has received attention. A spokesperson for the European Commission stated that the EU will sign a new contract with Gilead Sciences for increasing the dose of Remdesivir.
Tesla internal e-mails revealed that employees maliciously sabotaged the Fremont factory.
Pfizer and biopharmaceutical company Sangamo participated for the first time in a Phase 3 study of gene therapy for hemophilia A.
Google faces a new antitrust case in India for abusing its leadership in the smart TV market.
Intel’s Fab 42 factory is fully operational, greatly increasing the output of 10nm chips.
Levi’s announced plans to expand the retail market and expects revenue to fall by 14% to 15% in the fourth quarter, while analysts’ average expectation is a 19.62% decline. Earlier online sales surged to help the company achieve unexpected profits.
Investment bank Benchmark raised Amazon’s target price from $3,675 to $3,800.
Goldman Sachs raised Alibaba’s target price by 11% to $350.
On Wednesday, the German DAX30 index closed up 0.12% to 12921.05 points; the British FTSE 100 index fell 0.04% to 5,947.40 points; France’s CAC40 index fell 0.28% to 4882.00 points; Spain IBEX35 index fell 0.33% to 6913.00 points; Italy rich At that time, the MIB index rose 0.03% to 19,436.50 points.
Gold futures prices closed at their lowest level in a week on Wednesday, continuing yesterday’s decline.
U.S. President Trump announced that he has suspended the congressional Democrats’ fiscal stimulus negotiations, causing gold prices to come under pressure. A few hours later, Trump called for several independent rescue measures on Twitter.
Analysts said that the sudden suspension of fiscal stimulus negotiations has caused gold prices to fall. The market is now paying attention to the bargaining between the White House and Congress on small-scale stimulus measures.
On Wednesday, the price of gold futures for December delivery on the New York Mercantile Exchange fell by US$18, or 0.9%, to close at US$1,890.80 per ounce, the lowest closing price since September 28.
Silver futures for December delivery fell 2 cents, or 0.1%, to close at $23.896 per ounce.
Crude oil futures prices closed down on Wednesday. US crude oil inventories increased last week, and the new round of fiscal stimulus measures are facing uncertainty, putting pressure on oil prices.
US President Trump announced the suspension of fiscal stimulus negotiations on Tuesday afternoon, but then urged several independent rescue measures.
Tyche Capital Advisors analyst Tariq Zahir said that the energy market is now likely to be driven by external factors. He said: “The President announced the suspension of fiscal stimulus negotiations, and the market immediately saw a risk aversion. However, the President also asked for measures to rescue the aviation industry and directly issue checks to taxpayers, which slightly reversed the market sentiment.”
Trump’s statement boosted venture capital preferences, and US stocks rose on Wednesday.
Zahir said that at the same time, the market is paying close attention to the hurricane that will affect energy production in the Gulf of Mexico.
The price of West Texas Intermediate Crude Oil (WTI) futures for November delivery on the New York Mercantile Exchange fell 1.36 US dollars, or 3.3%, to close at 39.31 US dollars per barrel.
The price of Brent crude oil futures for December delivery on the London Intercontinental Exchange fell 1.25 US dollars, or 2.9%, to close at 41.40 US dollars per barrel.