Tuesday’s decline nearly erased as fiscal stimulus no longer necessary

By Peter Bukov|

Published: October 07 2020, 10:30 GMT+0

Tuesday’s decline nearly erased as fiscal stimulus no longer necessary

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Donald Trump sent stocks sharply lower late Tuesday when he tweeted that he has negotiations over a new coronavirus aid package.

Trump said, “Nancy Pelosi is asking for 2.4 Trillion Dollars to bail out poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of 1.6 Trillion Dollars, and, as usual, she is not negotiating in good faith. I am rejecting their request and looking to the future of our country.”

His words led to a 2% sell-off in indices, and most stocks fell hard. Gold and silver were also slammed.

However, none of this seems to matter right now as of the London session, indices are up 1%, and gold and silver are soaring. It seems that fiscal stimulus is no longer necessary for stocks to rally, and the Fed with its money printing might be enough. 

Later in the day, the FOMC minutes from the September\s meeting will be released. That meeting was a failure for stocks, and they have been down ever since as the Fed failed to announce more stimulus. Today’s minutes might also bring a negative sentiment. 

In the FX, the important levels have so far been defended, and the EURUSD pair remains below 1.18, while the cable is still trading below the 1.30 psychological resistance. 

Source: https://www.axiory.com/market-news/tuesday-s-decline-nearly-erased-as-fiscal-stimulus-no-longer-necessary