U.S. stocks were slightly up as a whole yesterday at 2:45 Eastern. Then, three minutes later, Donald Trump tweeted that stimulus talks with Democrats were over until after the election, which was swiftly followed by a 600-point drop in the Dow. The move came as somewhat as a shock to markets considering Trump had tweeted about the need to agree on a stimulus bill over the weekend.
While the delay Trump announced will be less than a month, that time lost could be significant to many industries. The first is small businesses who may be struggling for cash, with a need coming from those in areas of the country where outdoor services might become more difficult as weather changes. Another industry hurt by this delay could be airlines, which may have to go ahead with significant layoffs and route cuts if they do not get more cash.
One person who will not be pleased with Trump’s tweet is Fed Chairman Jerome Powell, who just hours before warned of a dire situation if Congress did not pass a new aid bill. He has consistently applauded Congress for its stimulus efforts so far and has called on them to continue implementing such measures. For now, though, the American people and businesses will have to wait until November 3 for a new stimulus bill.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
Originally published at https://invstr.com on October 7, 2020.