Markets on edge as US stimulus deadline looms – business live


U.S. House Speaker Nancy Pelosi, who will resume talks with Treasury Secretary Steven Mnuchin about a stimulus package today

U.S. House Speaker Nancy Pelosi, who will resume talks with Treasury Secretary Steven Mnuchin about a stimulus package today Photograph: Carlos Barría/Reuters

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Some familiar themes are weighing on the markets today. There’s just two weeks until the US presidential election, and fears of a contested results abound. The Covid-19 pandemic continue to rage, with Argentina becoming the 5th country to report 1m cases.

Today is also the deadline to agree a pre-election US stimulus package, set by House speaker Nancy Pelosi. She’s due to speak with US Treasury secretary Steven Mnuchin again today, in a final push to close the gap between the two sides.

Pelosi’s spokesman, Drew Hammill, tweeted overnight that the two sides are narrowing their differences – and should know by the end of today whether a deal can be done.

Drew Hammill
(@Drew_Hammill)

The Speaker and Secretary Mnuchin spoke at 3:00 p.m. today for approximately 53 minutes. In this call, they continued to narrow their differences. The Speaker has tasked committee chairs to reconcile differences with their GOP counterparts on key areas. (1/2)


October 19, 2020

Drew Hammill
(@Drew_Hammill)

The Speaker continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election. The two principals will speak again tomorrow and staff work will continue around the clock. (2/2)


October 19, 2020

Investors, though, fear that the two sides won’t close the gap. The Democrats are still pushing for at least $2.2trn of additional spending to support families, businesses, and public-health agencies – the latest White House offer is $1.8trn.

Pelosi is also pushing for more support for those made unemployed in the pandemic, expanded tax credits for poorer families, and aid for states worst hit by Covid-19. That’s a lot for the White House to swallow…. but president Trump would like a deal, so that $1,200 cheques could be dispatched to Americans.

Anxiety about the talks hit shares on Wall Street last night, with the Dow Jones industrial average losing 410 points in a nervy late selloff.

Holger Zschaepitz
(@Schuldensuehner)

Dow closes >400 points lower w/one day left until Pelosi’s stimulus deadline. Fear Index VIX jumps >29. https://t.co/whSerdm2dQ pic.twitter.com/z66hpl1toU


October 19, 2020

Jim Reid of Deutsche Bank says anxiety about the talks has ‘soured’ the mood in the markets:


The two sides remain talking ahead of today’s deadline. While the Republican-led Senate has been reluctant to pass a stimulus bill above the $500 billion level that Majority leader McConnell has supported, President Trump has indicated that he is willing to go up to the $2.2 trillion range that Democrats have demanded. Mr Trump said yesterday that if an agreement with Democrats is reached, he would “lean” on Republican Senators to “come along.”

Regardless, the confirmation that the two sides remain significantly apart saw the S&P 500 fall over 1.1% in the last 90 minutes of trading, though the index had been dripping lower throughout the day as risk sentiment soured after a healthy start.

After falling yesterday, European stock markets are on track to open lower this morning.

IGSquawk
(@IGSquawk)

Markets pulling back again late in Asian session after early recovery.

European Opening Calls:#FTSE 5858 -0.45%#DAX 12760 -0.74%#CAC 4919 -0.20%#AEX 563 -0.41%#MIB 19243 -0.68%#IBEX 6810 -0.73%#OMX 1829 -0.66%#STOXX 3217 -0.80%#IGOpeningCall


October 20, 2020

Bank of England policymaker Gertjan Vlieghe is due to speak about the state of the UK economy this morning, and we also get a healthcheck on America’s housing market.

The agenda

  • 7am BST: German consumer confidence survey from GfK
  • 10.30am BST: Bank of England MPC member Gertjan Vlieghe speech on “Assessing the Health of the Economy”
  • 1.30pm BST: US housing start and building permit data for September





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