From Barron’s’ “Dow Futures Slip as Fed and Treasury Clash Over Emergency Spending” posted early Friday:
U.S. stocks shifted into positive territory in the final hours of trading on Thursday, amid fresh fiscal stimulus hopes.
However, that optimism was dented after Treasury Secretary Steven Mnuchin on Thursday declined to extend emergency loan programs that were set up with the Fed and due to expire at the end of the year. He also asked the central bank to return the unused funds to the Treasury to “allow Congress to reappropriate $455 billion,” he wrote.
Voicing its objection in a statement that followed, the Fed said it would prefer that “the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.”
The expiration of five loan facilities, including one that aids small businesses, comes as the nation’s coronavirus infections spiral out of control and states begin to restrict movement. California imposed a 10 p.m. curfew for nearly all residents, while the Centers for Disease Control and Prevention has advised against Thanksgiving travel for the U.S. holiday next Thursday.
“While there are some glimmers of hope for a new fiscal package in the new year, any discord between the two bodies threatens to rattle investor sentiment, where continued monetary and fiscal support has been seen as a given throughout the health crisis,” said Richard Hunter, head of markets at Interactive Investor, to clients in a note.
My take: You don’t see Apple at 0.00% every day.