CNBC/Fred Imbert and Jesse Pound
Dow gains more than 150 points as traders hope a stimulus deal can be reached before day’s end
Stocks rose slightly on Tuesday as a deadline for a new fiscal stimulus deal from Washington approached.
The Dow Jones Industrial Average traded 176 points higher, or 0.6%. The S&P 500 gained 0.7% and the Nasdaq Composite advanced 0.6%.
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin “continued to narrow their differences” in a Monday afternoon phone call to discuss another stimulus package, according to Pelosi spokesman Drew Hammill. The speaker said that Tuesday is the deadline to reach an agreement before the Nov. 3 election.
“Over the next 24 hours … arguably the most important issue to watch for is a resolution on fiscal stimulus,” said Tom Lee, founder and head of research at Fundstrat Global Advisors, in a note. “While markets might see this as less significant (since a deal is likely post-election day), it is a big deal for those Americans with expiring benefits. So, we think it is very important for Washington to get a deal done.”
Economists Still Don’t Expect Things To Get Back To Normal Until At Least 2022, Survey Says
A biweekly survey from FiveThirtyEight and the University of Chicago shows that between May and October, more than seven months into the coronavirus crisis, economists generally haven’t changed their views on when U.S. GDP will return to pre-pandemic levels.
Some 30 economists say there is a two-thirds probability that the economy wouldn’t be back to normal until 2022 or later—that’s essentially unchanged from what they were expecting in May, according to the most recent survey results from earlier this month.
The economists’ October predictions around fourth-quarter GDP only slightly improved from what they expected back in June (growth of 4.9% vs. growth of 4.2%).
Allan Timmermann, an economics professor at the University of California San Diego who consulted on the survey, chalks the stagnating forecasts up to prolonged uncertainty about the course of the virus. It’s not clear when a vaccine will be widely available, and many businesses are still facing a precarious future, especially as the colder months put a dent in demand for leisure services.
“Uncertainty about the trajectory of the virus and its impact on service sectors such as hospitality, travel, entertainment, eating out, remains in the forefront and has not really been resolved at this point,” Timmermann told FiveThirtyEight.
Fox Business/Megan Henney
Biden’s economic plan could crush nation’s recovery from coronavirus pandemic, conservative economists say
Joe Biden’s economic agenda could destroy millions of American jobs and crush the nation’s slow-but-steady recovery from the coronavirus pandemic, according to new projections from President Trump’s former economists.
The Democratic presidential candidate’s plan would ultimately result in about 4.9 million fewer full-time employees and reduce the nation’s GDP, the broadest measures of goods and services produced in the country, by more than 8% over the next decade, according to the report, which was authored by Casey Mulligan, a University of Chicago professor who previously served as chief economist of the White House Council of Economic Advisers; Kevin Hassett, also a former White House economist now at Stanford University’s Hoover Institution; Timothy Fitzgerald and Cody Kallen.
A Biden presidency would translate into a loss of roughly $6,500 per household per year, the study shows.
The economists projected that Biden’s plan to expand subsidies for health insurance under the Affordable Care Act; undo some of the 2017 Tax Cuts and Jobs Act and increase the taxation of corporates; and establish new environmental standards, reversing years of regulatory reform, would discourage Americans from working more and earning more.
The former vice president has unveiled a multitrillion-dollar agenda that would be funded in large part by higher taxes on wealthy U.S. households – which he describes as anyone earning more than $400,000 annually – and corporations. That includes higher income tax rates, an expansion of the payroll tax for Social Security, new tax credits and fewer deductions.