Markets mixed as US stimulus hopes fade ahead of deadline

Globe with digital tablet, laptop and smartphone showing international markets.

Asian and European markets were mixed Tuesday but fading hopes for a pre-election US stimulus and concerns about a fresh surge in virus infections in key economies weighed on sentiment.

With a deadline set for later in the day by House Speaker Nancy Pelosi, analysts said US lawmakers’ weeks of haggling over a much-needed rescue package for the world’s largest economy appear unlikely to bear fruit until after the November 3 vote.

Pelosi’s spokesperson said she held talks with Treasury Secretary Steven Mnuchin on Monday and would do so again Tuesday, adding they “continued to narrow their differences”.

But there is a growing consensus that even if they do find an agreement – with Donald Trump saying he is happy to even go past Pelosi’s $2.2 trillion proposal – Senate Republicans would still not be prepared to back a massive spending bill.

“While the two sides seemed to be getting closer to an agreement over the weekend, investors remain nervous that if a new package won’t be accepted before the elections, the consumer economy could be in for a rough holiday season,” said Gorilla Trades strategist Ken Berman.

Edward Moya of OANDA added: “All signs point to no deal until January.”

“It seems politicians are determined to show that they are trying to get the next additional stimulus package done, but no one should count on action this year.”