Shutdown Averted

 

By Alex Eule |  Tuesday, September 22 Buying the Dip. The S&P 500 and Nasdaq Composite each snapped four-day losing streaks, rising 1% and 1.7%, respectively, on the day. The recent weakness seemingly set up the buying opportunity.  The Nasdaq had opened the day down 11% from its record close just a few weeks ago, while the S&P 500 was down 8% from its early-September high.   Markets were buoyed by another reminder that the Federal Reserve is ready to do whatever it can to help.  "Our economy will recover fully from this difficult period," Federal Reserve Chairman Jerome Powell told U.S. House members during testimony today. " We remain committed to using our full range of tools to support the economy for as long as is needed." Household spending has recovered three-fourths of its decline, Powell said.  Powell also offered lawmakers a subtle reminder of their own role in helping to keep the recovery on track: "The path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government," he said. Even as he spoke of an impressive recovery, Treasury Secretary Steven Mnuchin told the same House committee that another stimulus package was still necessary.  The president and I remain committed to providing support for American workers and businesses. We continue to try to work with Congress on a bipartisan basis to pass a Phase IV relief package. I believe a targeted package is still needed, and the administration is ready to reach a bipartisan agreement. While there's no sign of that agreement, Mnuchin and House Speaker Nancy Pelosi did reach another deal tonight to avert a government shutdown. The spending deal will keep the government running through Dec. 11.  Also this evening, Tesla finally announced long-awaited details around its new battery innovations. Al Root has much more of the "battery-day" details on Barrons.com. On first pass, investors seemed unimpressed. Tesla shares were down 7% in after-hours trading.

 

DJIA: +0.52% to 27,288.18 S&P 500: +1.05% to 3,315.57 Nasdaq: +1.71% to 10,963.64 The Hot Stock: Twitter +7.1% The Biggest Loser: Citizens Financial Group -5.1% Best Sector: Consumer Discretionary +2.1% Worst Sector: Energy -1.0%