Forget the chaos of the first presidential debate—it’s the chaos surrounding the last-ditch efforts at a Covid-relief bill that’s really causing the market consternation.
You wouldn’t know it from just looking at where the stock market finished. The
Dow Jones Industrial Average
gained 329.04 points, or 1.2%, to 27781.70, while the
rose 0.8% to 3363.00, and the
advanced 0.7% to 11167.51.
Given that the market was deep in the red in the early hours of the morning, we’re happy to take an up day like that. But it could have been so much better. At its peak, the Dow was up more than 573.67 points, a result of comments made by Treasury Secretary Steven Mnuchin’s optimistic comments about a possible relief bill. Senator Mitch McConnell, however, threw cold water on the possibility of a deal, and the Dow shed 250 points.
“The conversation will continue, but will it be enough to get the Senate to move?” asks Evercore ISI’s Dennis DeBusschere. “This is really tough to game out. Would say that it doesn’t look dead, but Trump is going to have to push McConnell / Senate it seems.”
That it finished the day higher was likely due to positive economic releases, including better-than-expected Chicago Purchasing Managers’ Index and ADP jobs releases, and another big jump in pending home sales. And with the official payrolls report due Friday, and more negotiations on a relief package still to come, the last two days of the week could be pretty wild.
“Today’s volatile session was likely the start of a three-day ‘trade-fest’ as the second half of the week looks at least as action-packed,” writes Gorilla Trades strategist Ken Berman. “The slew of bullish economic releases, the heated presidential debate, and the rampant stimulus-related speculation led to wild swings across asset classes today, and volatility is set to remain very high in the coming days as investors will have to ‘price in’ a lot of new information.”
Let’s just try to get through Thursday.
Write to Ben Levisohn at [email protected]