Still no agreement on the horizon

08/04/2020 | 08:38am

U.S. stock futures dipped today, after ending in the green yesterday following slightly positive signals on the U.S. pandemic front and betting on a quick agreement between the two political clans in Washington over the new phase of the federal economic support plan.

US Republicans and Democrats tried again yesterday to move towards an agreement on new aid for the millions of Americans out of work because of Covid-19, but also for struggling businesses and local communities.

A consensus still seems distant between the two parties, although both parties expressed some optimism. One of the main stumbling blocks remains the support for local government that the Democrats have been calling for, but that Republicans see as a reward for years of mismanagement.

But investors seem to think that the Republicans and Democrats will not be able to disagree for long on the support plan being negotiated, given the expiration of the weekly assistance provided to several million Americans in great difficulty. As for the coronavirus, the curve is easing a little in the United States, which is helping to improve the morale of the troops on Wall Street, where the Nasdaq has, once again, reached new heights yesterday.

Meanwhile Donald Trump said that the U.S. administration should receive a cut if Microsoft buys back some of TikTok's assets. “The United States could — should get a very large percentage of that price. Because we're making it possible," he said at a press conference Monday night. We dare not imagine the consequences of such a precedent.

After the big batch of PMI indicators yesterday, the agenda is much less full today. European producer prices will precede June industrial orders in the US. This morning, the Australian central bank left rates unchanged, as expected.


Romain Fournier
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