American indices led global equities optimism at the end of the week, with the Nasdaq, Dow Jones and S&P 500 all hitting five-week highs, as Speaker Nancy Pelosi tried to pressure Donald Trump into committing to a more comprehensive stimulus package.
Pelosi’s spokesperson, Drew Hammill, stated that Mnuchin had “made clear the President’s interest in reaching” an agreement on a comprehensive stimulus for the US economy, following Pelosi’s declaration on Thursday afternoon, that she would not support a standalone proposal offering aid only to airlines.
The Speaker pointed out that, unfortunately, the White House Communications Director contradicted that assertion during their call. The Speaker trusts that the Secretary speaks for the President. (2/2)
— Drew Hammill (@Drew_Hammill) October 8, 2020
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There is still no guarantee that a comprehensive stimulus package will be delivered, with Trump and White House spokespeople seeming offering contradictory suggestions in favour and opposing comprehensive support. However, for today, the mere insinuation of generous stimulus on the horizon was enough to keep the ball rolling on Friday.
Speaking on the likelihood of generous support, LPL Financial Equity Strategist, Jeffrey Buchbinder, told Yahoo Finance: “A compromise on a big stimulus package in Washington could potentially deliver another October surprise, but the odds are against it as Election Day approaches,”
“The optics of getting nothing done aren’t great on either side, and there are a lot of close Senate races right now, suggesting there still may be a glimmer of hope for a deal by November 3.”
And this glimmer was enough to see US indexes put the other segments of global equities to shame on Friday. The Dow Jones and S&P 500 were up to their highest points since the start of September, up 0.83% and 0.96%, to 28,662 and 3,480 points respectively.
Leading the charge, though, was the Nasdaq composite, up 1.24% to 11,562 points. With the Nasdaq being a big tech-laden index, a 1.92% rally from Microsoft, 1.10% gain from Apple, and a 2.72% rally by Amazon, all served its cause well.
Speaking on next week’s outlook, Spreadex Financial Analyst, Connor Campbell, said:
“Looking ahead to next week, and investors will likely remain preoccupied with the state of play regarding US stimulus and, somewhat related, any election headlines. Complicating matters is the October 15 Brexit ‘deadline’, a potential source of anxiety for the pound and FTSE.”