US Close: Stocks seesaw on stimulus, COVID spread intensifies, Oil slides on outlook,

Stimulus talks between House Speaker Pelosi and Treasury Secretary Mnuchin continue to edge closer to a deal, but skepticism remains high that Senate Majority Leader McConnell will not support one before Election Day. McConnell has not offered any positive signals that Republicans are willing to abandon their fiscally conservative beliefs and support another couple trillion dollars in stimulus.  He noted that Democrats want a ‘wheelbarrow of cash’ for states and if no progress is made today, the Senate turns to Judge Barrett’s nomination. 

It seems for many Republicans, now is the time to start planning for life after Trump.  While the presidential race is tightening, Biden early voting, funds, and polls all in his favor.  The odds also seem slightly in favor that the Republicans will lose the Senate and they need to decide if committing to a stimulus deal will alienate their base.  Republicans might be starting to focus on what gives them the best chance of taking back the Senate in 2022.  Some could make the argument that it would be better for Republicans to capitulate now on a big-spending bill so they could have a clean slate with the next administration.  The problem for many Republicans is that they are up for re-election and a vote before election day could alienate their base by either supporting a near $2-trillion bill that has many concessions to the Democrats or by going against the president.   

An agreement could be reached by Pelosi and Mnuchin but doubts should remain that any bill near the $2 trillion price tag will die in the Senate.  If the election yields a blue wave, stimulus talks might have to wait until Biden is in office, but it will likely be much larger than what is being discussed.  A surprise Trump victory would mean a smaller deal would be reached before the end of the year.   

Choppy markets will persist until the presidential election as US stocks continue to hang on every stimulus and coronavirus vaccine headline.

COVID

The race for a COVID-19 vaccine was dealt some disappointing news after one of the front-runners, AstraZeneca had a patient die in their vaccine trial.  AstraZeneca shares fell to the lowest level since April on the news but pared losses after it was reported the patient didn’t get the vaccine.  Over the next couple of months, the first round of COVID-19 vaccine phase 3 results will occur.  Hopes are for a vaccine or two to get the greenlight before the end of the year.

The virus spread continues to worsen.  For the first time since May, New York City reported over 2,000 new cases, an increase of 0.4%, modestly higher than the 7-day average of 0.3%.  The trajectory of new cases is looking ugly for Election Day.  The mid-west continues to see a surge of cases in the Dakotas, Montana, Wyoming and Nebraska. 

Except for Spain, it is looking ugly in Europe.  Greece hit a daily record in new cases and Italy saw a huge spike in cases to a record…