By Chibuike Oguh
Nov 20 (Reuters) - Global stocks came under pressure on
Friday after U.S. Treasury Secretary Steven Mnuchin called for
an end to pandemic relief for struggling businesses, sparking a
rare clash between the central bank and Treasury and weighing on
sentiment.
Asian shares staged a mixed open and futures for the S&P 500
EScv1 fell 0.66%, erasing the firmer lead from a strong Wall
Street session overnight.
U.S. markets had previously rallied after Senate Democratic
Minority Leader Chuck Schumer said Republican Majority Leader
Mitch McConnell had agreed to revive talks to craft a new fiscal
relief package. However, that sentiment faded after Treasury Secretary
Mnuchin later asked the Federal Reserve to return money
earmarked under the March pandemic relief act for emergency
lending to businesses, nonprofits and local governments.
That would mark an end on Dec. 31 to most of the
crisis-response programs the Fed deemed vital to keeping the
economy stable. "The White House wants to pull the unused portions back so
Congress can spend the money elsewhere, while the Fed is pushing
back," said Stephen Innes, Global chief market strategist at
axi. "Indeed, this does not help the push-pull tug of war around
short-term versus long-term markets narrative at a time when it
important that all levels of government, including the Fed, at
least put up the pretense of a unified front."
Australia's S&P/ASX 200 .AXJO rose 0.44% in early trading,
while Hong Kong's Hang Seng index futures .HSI HSIc1 rose
0.22%. Japan's Nikkei .N225 opened 0.6% lower.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.11%.
Investor sentiment was also tinged by data that showed
COVID-19 hospitalizations across the U.S. jumped by nearly 50%
in the last two weeks, threatening the recovery of the world's
largest economy as cities and states began to impose lockdowns.
"A meaningful stimulus package will aid small companies, the
underlying economy, as well as the unemployed and people most at
need," said Thomas Hayes, chairman of Great Hill Capital in New
York. "And there might be less of an inclination for cities to
shut down."
Nearly 79,000 people were being treated for COVID-19
infections in U.S. hospitals on Thursday, a Reuters tally
showed, the most at any time during the pandemic. The surge in
cases has weighed on investors as the United States recorded
161,607 new daily cases on a seven-day rolling average as of
Wednesday.
All three major stock indexes, however, got a healthy boost
after Schumer said he had agreed with McConnell to allow their
staff to begin meetings for "a real good COVID relief bill."
A senior Democratic aide told Reuters there had been a
mid-afternoon meeting on Thursday among congressional aides that
discussed coronavirus relief and efforts to pass a $1.4 trillion
bill to keep government agencies operating beyond Dec. 11 when
current funding expires.
Of the 11 major sectors in the S&P 500, energy .SPNY and
tech shares .SPLRCT gained the most, while utilities .SPLRCU
and healthcare .SPXHC were the only losers in percentage
terms.
The Dow Jones Industrial Average .DJI rose 0.15%, the S&P
500 .SPX gained 0.39% and the Nasdaq Composite .IXIC added
0.87%.
U.S. Treasury yields slipped on the news of Mnuchin's letter
to Fed Chair Jerome Powell, which came out after Wall Street
closed. The yield on the benchmark 10-year note US10YT=RR was
last at 0.842%. U.S. stock futures EScv1 also fell 0.84% when
trading resumed.
Oil prices reversed losses and edged higher in after-market
trade, after Brent LCOc1 settled down 0.3% at $44.20 per
barrel with U.S. crude CLc1 0.2% lower at $41.70.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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