Market Watch Weekly | October 23rd, 2020 | Stimulated Yet?

Erik Dekker - Oct 23, 2020
The longer-term outlook for stocks is positive, in our view, with support from economic growth, corporate earnings and interest rates. In the near term, we expect volatility to remain elevated and markets to consolidate recent gains.

North American indices continued oscillating between positive and negative sessions this last week, reflecting the ongoing tug-of-war between rising concerns and encouraging economic data. The broader S&P 500 posted its first weekly loss in four weeks as failed stimulus talks outweighed an earnings season that is coming in considerably better than expected. With respect to the prior, investors continue to monitor ongoing negotiations between Republican and Democratic leaders in Washington over another round of aid, which saw the last round of supplemental support for unemployed Americans expire at the end of July. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have been negotiating daily this week on a possible aid package. On Thursday, Pelosi said that progress is still being made, but any compromise will likely face stiff resistance from Republicans in the Senate. It remains to be seen whether there will be another round of stimulus passed before the November 3rd election.

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