Politicians in the United States are trying to urgently agree on a huge Coronavirus relief package. It would be a needed stimulus injection into the economy, to try and cushion some of the blow from the virus.
Over the course of Friday and Saturday, Republicans and Democrats in the U.S. Senate have been struggling to complete a deal on a $1 trillion-plus bill, which is aimed at stemming the coronavirus pandemic’s economic fallout for workers, industries and small businesses.
The latest reports suggest that after the second day of marathon closed-door negotiations, there was no sign of an overarching deal between negotiators. White House officials note, with the combined actions that have been taken by the U.S. Federal Reserve and the government administration, the prospective bill would have a $2 trillion net impact on a U.S. economy.
It is very much needed because this health crisis is sparking fears that it will lead to a spike in unemployment as businesses close and the economy falters. In terms of data, all eyes every week will now be on the U.S. unemployment claims.
What does this mean for markets?
The longer markets wait for this package the more selling will likely occur in U.S. stock indices. In terms of the theme it remains; sell on the pullbacks/rallies. If the Senate passes this stimulus then it should provide a relief rally for indices, although may prove to be short-lived depending on economic data performance moving forwards.
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