Deadline day for deal on U.S. stimulus package

20 Oct 2020

U.S. House speaker Nancy Pelosi is scheduled to speak with Treasury secretary Steven Mnuchin again to strike a pre-election U.S. stimulus package before the deadline closes on Tuesday evening.

Ms Pelosi’s spokesman, Drew Hammill, tweeted overnight that the two sides are narrowing their differences - and should know by the end of today whether a deal can be done.

The Democrats are demanding for at least $2.2tn of additional spending to support families, businesses, and public health agencies – whilst the current White House offer is $1.8tn.

On Monday global stock markets were full of optimism but this faded throughout the day, with the Dow Jones industrial average losing 410 points in an anxious late sell-off.

Jim Reid of Deutsche Bank said jitters about the talks has “soured” the mood in the markets.

He noted: “The two sides remain talking ahead of today’s deadline. While the Republican-led Senate has been reluctant to pass a stimulus bill above the $500 billion level that Majority leader McConnell has supported, President Trump has indicated that he is willing to go up to the $2.2 trillion range that Democrats have demanded. Mr Trump said yesterday that if an agreement with Democrats is reached, he would “lean” on Republican Senators to “come along.”

He added: “Regardless, the confirmation that the two sides remain significantly apart saw the S&P 500 fall over 1.1% in the last 90 minutes of trading, though the index had been dripping lower throughout the day as risk sentiment soured after a healthy start.”

European stock markets opened lower on Tuesday as they await the news of a potential massive stimulus shot into the world’s largest economy.