US Stock Market Overview – Stocks Rise as Trump Walks Back Stimulus Comments

US stocks were higher on Wednesday rebounding as President Trump walked back his comments that he wanted to wait until after the election to discuss a new stimulus deal. All sectors in the S&P 500 index were higher, led by gains in cyclical stocks and materials. Utilities were the worst-performing sector in the S&P 500 index. Transportation shares broke out led by UPS and Fedex. Industrials are close to an upside breakout. US yields moved higher as the curve continued to steepen. The dollar moved lower, while the VIX volatility index eased. Fed minutes from the FOMC September meeting showed that the Fed is concerned if the Federal Government does not produce another stimulus bill.  New mortgage applications declined while Eli Lilly asked the FDA for an emergency authorization of its new antibody-drug.

Fed Meeting Minutes Show Concern

The Federal Reserve meeting minutes from the most recent open market committee meeting show that official is concern about the lack of additional fiscal stimulus would jeopardize and economic recovery. While Fed official kept interest rates unchanged they did pledge in September to hold rates unchanged for several years. The meeting featured an extensive discussion about the economic outlook. With President Trump calling the talks off yesterday and then walking back some of those comments today, investors feel that the chance of a deal before the election is slim.

New Mortgage Applications Fall

Applications for new home mortgages fell 2% for the week but were 21% higher year over year. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of up to $510,400 slipped to 3.01% from 3.05. In response, refinance application volume, which is most sensitive to weekly rate moves, rose 8% for the week and was 50% higher than a year ago, according to the Mortgage Bankers Association.

Lilly Ask FDA for Approval

Eli Lilly reported on Wednesday that it has requested Food and Drug Administration U.S. authorization of the emergency use of an experimental antibody-based treatment for people with recently diagnosed, mild-to-moderate Covid-19. Lilly said is seeking the authorization for its drug, code-named LY-CoV555, which was derived from a blood sample of one of the earliest U.S. survivors of Covid-19.