Stimulus hopes to raise European stocks, Dow contracts

Stimulus hopes to raise European stocks, Dow contracts

US President Trump is waving from the back of a car on a motorcycle outside Walter Reed Medical Center in Bethesda, Maryland on October 4, 2020.

alex edelman / Agence France-Presse / Getty Images

European stocks rose on Monday in hopes of a final boost to the economy ahead of the US election, as well as a clear result on election day.

The Stoxx Europe 600 SXXP,
+ 0.67%
gained 1%, with similar gains for the German DAX DAX,
+ 0.66%,
the French CAC 40 PX1,
+ 0.82%
and the UK FTSE 100 UKX,
+ 0.48%.
Earnings include steelmakers ThyseenKrupp TKA,
+ 6.23%
and ArcelorMittal MT,
+ 1.90%.

Futures at Dow Jones Industrial Average YM00,
+ 0.55%
increased by 202 points.

Politico reported that House Speaker Nancy Pelosi and Finance Minister Steven Mnuchin consulted with Federal Reserve Chairman Jerome Powell about their talks on the stimulus plan. It is unclear what role the Fed will play, if any. The central bank had a role in the first stimulus plan. Pelosi said in a separate interview with CBS that airlines should not lay off employees and that assistance would be retroactive.

In addition to a short drive, President Donald Trump spent the weekend at Walter Reed Medical Center recovering from COVID-19. Inside or outside the hospital, recent opinion polls have turned decisively on his challenger, former Vice President Joe Biden.

“Financial markets have slightly reduced their expectations of prolonged uncertainty after Election Day and now look a little less worried about a close and questionable election,” Barclays strategists said in a note to clients. The strategists said that Trump’s hospitalization could prove to be the “political impetus” that a stimulus agreement brings to the finish line.

Also on the political front, UK Prime Minister Boris Johnson and European Commission President Ursula von der Lane issued a statement urging their talks to “work hard” to forge a trade deal, Johnson also said in an interview. was willing to give up block trading without one.

The news on the coronavirus front continued to worry, with Paris on the verge of closing its bars, although its restaurants would remain open and Marseille would reopen theirs.

Cineworld CINE,
Shares fell 50% as it announced it would suspend operations at all 536 Regal theaters in the US and the 127 Cineworld and Picturehouse theaters in the UK from Thursday. Cineworld said it was “evaluating several sources of additional liquidity.”

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