S&P 500 futures are gaining ground in premarket trading as traders believe that U.S. lawmakers will ultimately reach consensus on the new coronavirus aid package.
Traders Wait For A New Stimulus Deal
S&P 500 futures are gaining ground in premarket trading as traders remain convinced that U.S. lawmakers will ultimately make a deal on the new coronavirus aid package.
U.S. President Donald Trump has recently raised his stimulus offer to $1.8 trillion but Democrats continued to insist on the implementation of their $2.2 trillion stimulus package.
On Sunday, the Trump administration proposed to use funds from the expired small business loan program at a time when Republicans and Democrats continued their negotiations on the comprehensive aid package. At this point, there are no signs that Democrats would agree to a small package instead of a comprehensive one.
While some progress was made in recent weeks, Democrats and Republicans remain rather far apart. However, it looks like the market believes that a massive coronavirus aid package will be implemented after the November election so traders are boosting their stock purchases.
Oil Is Trying To Settle Below The $40 Level As Temporary Bullish Catalysts Evaporate
Oil is testing the $40 level as oil workers’ strike in Norway ended while U.S. oil producers began to restart their production in the U.S. Gulf of Mexico after Hurricane Delta.
Now that the temporary supportive catalysts are gone, traders may focus on the latest developments on the coronavirus front which may hurt oil demand.
European countries continue to impose additional virus containment measures, and the market will closely watch whether they will result in lower demand for oil. Not surprisingly, many energy-related stocks are losing some ground in premarket trading.
Will U.S. Inflation Continue To Increase?
There are no important economic reports scheduled to be released today in the U.S. so traders will have to wait for Inflation Rate and Core Inflation Rate reports which are due to be published on Tuesday.
Analysts expect that Inflation Rate will grow by 1.4% year-over-year while Core Inflation Rate will grow by 1.8%. Core Inflation Rate bottomed in May at 1.2% and started to increase in July thanks to the unprecedented monetary and fiscal stimulus.
Traders expect that the Fed will keep rates at the bottom for several years and let inflation run above 2% for some time. However, a faster-than-expected inflation may put the current assumptions under question so the market will be closely watching inflation reports.