Dow Futures Higher on Stimulus Bets; Trump Axes China Talks

The Wednesday Market Minute

  • Global stocks grind higher on U.S. stimulus hopes, but China tensions, rising coronavirus infection rates cap gains.
  • President Trump says he won’t talk with China on trade, casting doubt on the fate of the current Phase One deal and adding to already-concerning levels of tensions between Washington and Beijing.
  • U.S. lawmakers signal readiness to agree to a pared-down $500 billion stimulus deal that would provide stop-gap funding until the end of the year.
  • Global coronavirus cases top 22 million, with new travel restrictions unveiled in Europe and university closures in the United States.
  • The dollar holds at 27-month lows against its global peers ahead of Fed minutes of the July policy meeting at 2:00 pm Eastern time.
  • U.S. equity futures suggest firmer open on Wall Street follwing stronger-than-expected second quarter earnings from Target and Lowe’s. 

U.S. equity futures bumped higher Wednesday, while the dollar held at multi-year lows, as markets looked to the release of minutes from the Federal Reserve’s July meeting and bet on the prospect of pared-down stimulus from lawmakers in Washington.

House Speaker Nancy Pelosi told Politico that her Democratic colleagues were open to the idea of a stop-gap stimulus agreement, likely in the region of $500 billion, that would carry the economy through to the November elections. 

Multiple media outlets have also suggested that the White House could encourage Republicans to agree to the pared-down package, which could include funding for school and the post office, but won’t provide direct relief to millions of Americans still locked out of the job market.

The potential deal, while far below the Democrats $3 trillion plan passed earlier this spring, would nonetheless inject some cash into the economy heading into the autumn months, where questions over the fate of school and university openings could hinder hiring plans and slow job creation over the second half of the year.

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