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On early Wednesday, Dow further surged on hopes of an imminent CARES Act 2.0 as the White House Chief of Staff Meadows said CARES Act 2.0 has entered a new phase as Dems, White House looks to cut the deal in the next 48 hours and negotiations have entered a more technical' side of trying to get the language right:
"I am optimistic--- We do share one goal, and that is hopefully to get some kind of deal in the next 48 hours or so. Over the past 24 hours, negotiations have shifted toward crafting specific language for the legislation, so long as the two sides can agree upon a final spending number. I can tell you that the negotiations have entered a new phase, which is more on the technical side of trying to get the language right if we can agree upon the numbers," We’re still apart. Still a number of issues to work on, but the last 24 hours have moved the ball down the field.”
Pelosi said she wants to reach a deal with the White House before the presidential elections on November 3. Pelosi added she is happy with the state of the stimulus talks. However, Pelosi also pointed out that President Trump will need to convince Republican Senate Majority Leader McConnell that it is important to agree on stimulus as soon as possible as she thinks McConnell might not mind finishing the deal after the election.
Further on CARES Act 2.0 political soap-opera, the White House NEC Kudlow popped up and said: “I am optimistic about CARES Act 2.0—but I cannot speak for Senate Majority Leader McConnell, but things seem to be moving in a favorable direction between the Democrats and the White House.”
And the Council of Economic Advisers Acting Chairman Goodspeed said: “While significant issues remain, Treasury Secretary Mnuchin and House Speaker Pelosi are getting closer to making a coronavirus stimulus deal”.
Earlier, McConnell said: “The Senate would consider approving a larger coronavirus relief package if a bipartisan agreement is reached”.
On mid-Wednesday, Dow Future slips from the session high into red amid ongoing political drama at Capitol Hill.
The CARES Act 2.0 may be a reality by the weekend and we may see a brief rally in Dow, Gold but it may soon fade on another reality of U.S. election uncertainty as there may be political and policy vacuum until at least Han-Feb’21. Both Trump and Pelosi are now playing political chess over CARES Act 2.0, but Pelosi’s adamant behavior may also cost Biden dearly in the 3rd Nov election as many Americans may now urgently need financial assistance rather than political rhetorics. Many Americans think that Capitol Hill should pass the PUA/PPP grants at the earliest and then decide on other issues after the election.
Technical Outlook: SPX-500, DJ-30, and NQ-100 (Futs):
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