4:05 pm: US equities end higher for their best week in months
US stocks closed higher for their best week in months as stimulus package talks continue with President Trump’s encouragement.
For the week, the Dow Jones Industrial Average enjoyed its best gain since August, up more than 3%. The S&P 500 and Nasdaq are up both 4%, respectively.
The Dow rose 161 points, or 0.57%, to 28,586. The S&P 500 increased 0.88% to 3,477 and the tech-heavy Nasdaq jumped 1.39% to 11,579.
12:25 pm: US markets flying high as traders watch for stimulus news
The Dow gained nearly 225 points, 0.8%, to 28,650.2 at midday. The Nasdaq improved 137 points, 1.2%, to 11,557.7, and the S&P 500 increased 34 points, 1%, to 3,481.
The dominant market driver this week continues to be the discussion around a possible coronavirus relief package.
"Sentiment on Wall Street is a little bullish as the chatter of a coronavirus relief package is doing the rounds," CMC Markets UK analyst David Madden wrote. "There have been a few twists and turns in relation to the proposed stimulus scheme, but dealers are cautiously buying to the market in the belief that some progress will be made. The Democrats and the Republicans are still divided so one could argue that traders are getting ahead of themselves."
President Trump, who previously called off negotiations until after the November 3 election, weighed in again Friday on Twitter.
Covid Relief Negotiations are moving along. Go Big!— Donald J. Trump (@realDonaldTrump) October 9, 2020
Despite the turmoil, the Dow is on pace for its biggest one-week gain since August, according to CNBC.
Among the success stories were cruise companies, which improved after Vice President Mike Pence announced that he planned to meet with industry leaders, according to media reports.
Royal Caribbean Group (NYSE:RCL) and Norwegian Cruise Line Holdings Ltd (NYSE: NCLH) each gained more than 2.5% to $71.20 and $18.75, respectively, and Carnival Corporation & Plc (NYSE:CCL) was up nearly 2% to $15.91.
10:30 am: Proactive North America headlines:
Algernon Pharmaceuticals Inc (CSE:AGN) (OTCB:BTHCF) names Dr Mark Swaim to its medical and scientific advisory board
Great Panther Mining (TSE:GPR) (NYSEAMERICAN:GPL) unveils solid production figures for 3Q and says it is on track for full-year guidance
Fury Gold Mines Ltd (TSE:FURY) (NYSEAMERICAN:FURY) launches following Auryn Resources' acquisition of Eastmain Resources launches following Auryn Resources' acquisition of Eastmain Resources
9:44 am: Wall Strret on the up
Optimism over a possible US stimulus package continued to inform risk appetite on Wall Street at the start of the week’s final trading session, with the main three indices starting on the front foot on Friday morning.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.48% at 28,563, while the S&P 500 rose 0.55% to 3,465 and the Nasdaq climbed 0.66% to 11,496.
“Investors have clearly been sensitive to the on/off fiscal stimulus talks, as US equities appear primarily driven by expectations surrounding the outcome of these intense discussions. Amid the drama between the White House and Democrats which add to the political shenanigans leading up to the November presidential elections, it’s evident that investors are clinging on to any sliver of hope that the world’s largest economy will see additional fiscal aid,” said FXTM market analyst Han Tan.
“An agreement over the next stimulus package would certainly justify the recent climb in US equities, while potentially encouraging these indices to restore more of its prior record gains. However, these advances are not yet fully assured, as elevated political uncertainty and a stalling global economic recovery could still drag riskier assets lower”, he added.
7.50am: Wall Street looks bullish
It looks like being a risk-on day in the US as hopes of progress on a fiscal stimulus package keep the bulls interested.
Spread betting quotes indicate the Dow Jones Industrial Average will rise 110 points to 28,536 while the broader-based S&P 500 should kick on 12 points to 3,459.
The tech-heavy NASDAQ Composite is seen advancing 167 points to 11,588.
Although the markets seem to be enthused by the prospect of a stimulus deal, Craig Erlam at OANDA is still not buying it.
“The Democrats have little reason to cede too much ground and the Republicans seem extremely reluctant. Democrats are unlikely to be blamed in the event that stimulus isn't forthcoming, especially after Trump canceled talks earlier this week, and they have a growing lead in the polls. They may find it easier to resume after the election, even if that comes at a cost now,” Erlam said, in a shocking assessment that implies politicians might take actions for political ends rather than the greater good of the people who voted them in.
“Of course, this may all be the usual brinkmanship but the fact that this is still happening in October, so close to election day and as large companies prepare to lay off thousands of workers gives me the impression there's more to it. For that reason, investors may be a little over-optimistic and could pay the price short-term.
“That said, it's interesting to see this optimism against the backdrop of Biden's lead widening in the polls. Perhaps we're focusing too much on stimulus prospects and not enough on the desire of investors not to see long, drawn-out and hostile legal challenges after the election. Should Biden's lead continue to grow, it may be a rally of relief, rather than a celebration of the result, itself,” Erlam continued.
Four things to watch for on Friday:
- There will be a small amount of macro data on Friday in the form of US wholesale inventories, which will provide an indication as to how much goods American wholesalers are keeping in their warehouses. The consensus forecast is for a 0.5% increase, led by durables.
- Politics will also be in focus as politicians continue to wrangle over a possible stimulus package in Washington DC as the election draws closer
- The stimulus talks could also have consequences for the gold price, as a cash injection could prove a positive for the yellow metal as an inflation hedge
- Share price reaction from semiconductor maker Advanced Micro Devices Inc (NASDAQ:AMD) following a Wall Street Journal report that it is in talks to buy rival Xilinx Inc (NASDAQ:XLNX)