U.S. stocks opened higher, despite the recently deadlocked coronavirus relief bill talks, and it is unclear if this will have any impact on the chances of a second round of stimulus checks. According to CNN, Wall Street kicked off Monday with the Dow opening at 0.2%, or 54 points, higher. Additionally, the S&P 500 grew by 0.2%, and the Nasdaq Composite opened 0.6% higher.
There have been concerns that the rising stock market numbers could imply that a second stimulus is not needed, which is a notion that expert economists do not agree with. "The juxtaposition of getting more fiscal stimulus and better data has paralyzed us in our tracks … we’ve seen this sideways [market] action," said Art Hogan, chief market strategist at National Alliance, per CNBC. "It feels like we need more action from Congress, and the concern is the longer we wait, the better the data gets and the less impactful the next round of stimulus will be."
Just because things are looking up now, does not mean that will stay that way, as Peter Boockvar — chief investment strategist at Bleakley Advisory Group — says. "I think it will cross over a line where they care," he said. "I think the market is in suspended animation of believing there will be a magical deal." Boockvar went on to explain that he expects a stimulus package will be eventually settled on, but that he also expects it to be less than what was provided in the CARES Act.
"What they’re not grasping is any deal, any extension of unemployment benefits, is going to be smaller than it was, and the rate of change should be the most important thing investors focus on," he said. "Not the binary outcome of whether there’s a deal or no deal. There’s going to be less air going into the balloon." Boockvar and Hogan are backed up in their assessments by Mark Zandi, chief economist at Moody’s Analytics, who states that economy charts are likely to start seeing a lot of ups and downs.
"I think in August and September, there will be a lot of Ws, if there’s not more help here," said Zandi, describing how the rising and falling of the numbers can resemble a W. "It’s clearly perplexing. It may take the stock market to say we’re not going to get what we expect, and sell off and light a fire." At this time, Congress is adjourned, and no stimulus package plan is in sight.