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Stocks mixed, US stimulus hopes fade

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US House Speaker Nancy Pelosi Nancy Pelosi has set a Tuesday deadline for stimulus talks but hopes for a deal before the election are fading. AFP

Stocks mixed, US stimulus hopes fade

Global stocks were mixed on Tuesday before a key deadline to agree a pre-election US stimulus package as concerns weighed over a fresh surge in coronavirus infections.

In Europe, London and Paris stocks were higher around the half-way mark but Frankfurt lapsed into the red after an uninspiring performance in Asia and overnight losses on Wall Street.

World oil prices flattened, one day after the Organisation of the Petroleum Exporting Countries (Opec) and other major crude producers refrained from altering output policy despite weak virus-hit demand and stubborn oversupply.

US Democrats and Republicans have meanwhile been haggling over a new Covid-19 stimulus package.

House Speaker Nancy Pelosi has set a Tuesday deadline on the tense negotiations amid growing fears that nothing will be approved before the November 3 presidential election.

CMC Markets analyst Michael Hewson said: “The likelihood of a deal taking place appears no more likely now than it was a week ago, with the window for it happening . . . closing fast, as tonight’s Pelosi-imposed Tuesday deadline for getting a deal agreed comes into view.

“The lack of action is especially concerning given reports that coronavirus cases are rising in excess of five percent or more a day in 38 US states, raising concerns that the second wave that is currently sweeping across Europe is starting to build into a possible third wave in the United States.”

Pelosi’s spokesman said she held talks with Secretary of the Treasury Steven Mnuchin on Monday and would do so again on Tuesday, adding that they continued to narrow their differences.

There is a growing consensus that even if they do find an agreement – with US President Donald Trump saying he is happy to even go past Pelosi’s $2.2 trillion proposal – Senate Republicans would still not be prepared to back a massive spending bill.

The need for a stimulus is increasing as figures show fresh infections rising across the US, stoking concerns about the reimposition of economically damaging containment measures.

That comes as numerous European countries have been forced to put new targeted lockdowns in place as they struggle to contain a second wave.

Investors are also keeping tabs on post-Brexit trade talks, with Britain welcoming signals that the European Union was ready to intensify them but saying the bloc’s commitments did not yet go far enough to restart face-to-face negotiations.

The pound steadied on Tuesday against the euro and dollar.

Britain’s chief negotiator David Frost said he had held a “constructive discussion” with EU counterpart Michel Barnier, but added on Twitter that the bloc “still needs to make a fundamental change in approach to the talks and make clear it has done so”.

Prime Minister Boris Johnson has said he is willing to walk away without an agreement if Britain does not get what it wants.


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