U.S Equity Markets were mixed for most of the day, before selling off sharply into the close. The big driver today behind the selloff was a tweet from President Donald Trump, who said he has instructed his team not to negotiate a stimulus package until after the election. This spooked markets, as it indicates that there won’t be a Stimulus Bill anytime soon. In a speech, Federal Reserve chairman Jerome Powell warned that too little stimulus would create more economic risk. He added that monetary policy will remain accommodative for the foreseeable future. Political uncertainty also took a back seat yesterday, after President Donald Trump was released from the hospital following treatment for the Coronavirus. On the vaccine front, the U.S. Food and Drug Administration (“FDA”) said it will work as quickly as possible to approve a vaccine, but won’t “bend to political pressure” to rush an inoculation. The FDA added that it would require at least two months of safety data before approving a vaccine. This timeline could possibly take some wind out of the optimism that a vaccine could be approved by Election Day next month. Both the S&P and Dow closed lower by 1.4%, well off earlier highs. European Central Bank President Christine Lagarde said Quantitative Easing measures remain a better tool than lowering interest rates. She added that the ECB is ready to introduce more stimulus if necessary. German Factory Orders beat expectations in August, highlighting the ongoing economic recovery. The International Monetary Fund said more spending by governments on infrastructure projects will help boost growth in a post-coronavirus environment. The British government said it expects post-Brexit trade talks with the European Union to continue until an October 15 and 16 regional leaders’ summit. Elsewhere, Oil built on Monday’s 6.23% gain, closing a further 2.32% higher as a potential hurricane in the Gulf of Mexico caused companies to shutter production, taking supply out of the market. Meanwhile, Gold declined 1.43% on Dollar strength.
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