Stocks set for choppy trading
U.S. stock futures were mildly lower on Friday morning as traders remained cautious over the aggravating coronavirus pandemic. The growing uncertainty about post-Election Day chaos also added to the jitteriness in markets after President Donald Trump said he would not necessarily commit to an orderly transition should he lose the election.
As of 5:20 a.m. ET, futures tied to the blue-chip Dow were down 33 points, or 0.12% to 26,682. The S&P 500 futures dropped 4.62 points, or 0.14% to 3,233.38 while the tech-heavy Nasdaq 100 futures shed 25 points, or 0.23% to 10,866.75.
Goldman Sachs slashes GDP Q4 forecast, cites lack fresh stimulus
Goldman Sachs (NYSE: GS) lowered its fourth quarter U.S. GDP forecast in half to just 3% on an annualized basis Thursday, citing the lack of a near-term coronavirus relief package.
“At this point we think it is clear that Congress will not pass additional fiscal stimulus this month. We now think any further stimulus will wait until early 2021,” Goldman Sachs economists wrote in a note to clients.
The economists expect the withdrawal of stimulus programs to weigh on consumer spending through the end of 2020 and cause households’ disposable income to drop to pre-pandemic levels.
Democrats rekindle talk of a new stimulus package
Meanwhile, House Democrats are planning another coronavirus stimulus package of around $2.4 trillion as they try to break the deadlock with Republicans, CNBC reported Thursday.
The package would include assistance to small businesses, restaurants and airlines. People familiar with the matter told news outlet that the chamber could vote on the legislation as soon as next week.
Treasury Secretary Steven Mnuchin told the Senate Committee on Banking, Housing and Urban Affairs yesterday that the Trump administration and Democratic leaders will restart stimulus talks.
Mnuchin told lawmakers that he talked to House Speaker Nancy Pelosi more than 15 times in recent days and the two agreed to resume bipartisan talks.
