Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Indexes  >  USA  >  S&P 500    SP500

S&P 500

(SP500)
SummaryQuotesChartsNewsHeatmapComponents 
SummaryMost relevantAll NewsNews of the index componentsMarketScreener Strategies

U.S. outlook dims; economists say Democratic sweep best for revival

10/27/2020 | 07:09pm EST
FILE PHOTO: A

BENGALURU (Reuters) - The outlook for the U.S. economy has dimmed in the run-up to the presidential election, according to a Reuters poll which showed that a recent resurgence in novel coronavirus cases ran a high risk of halting the economic recovery.

New coronavirus infections have touched record levels in the United States recently, and the number of hospitalized COVID-19 Americans jumped to a two-month high, leading to further restrictions. In Europe, many countries have also reimposed measures to curb the disease's spread.

A fast-rising case count and uncertainty about a fiscal relief bill drove the steepest U.S. stock market sell-off in a month, with the benchmark S&P 500 index posting its biggest daily decline in four weeks on Monday, flattening the U.S. Treasury yield curve.

Nearly two-thirds of 58 economists who responded to an additional question in the Oct 16-26 poll said there was a high risk that the U.S. economic rebound could be halted by the surge in coronavirus cases, including five who said it was very high.

"The pace of the recovery is already slowing as households and businesses are struggling with the impact of the lockdown and the virus," said Philip Marey, senior U.S. strategist at Rabobank. "Meanwhile, the extension of the fiscal stimulus has yet to arrive, is late, and is likely to be modest."

Reuters Poll: U.S. economic outlook - https://fingfx.thomsonreuters.com/gfx/polling/gjnvwlkkzpw/U.S.%20economic%20outlook.PNG

The result of the Nov. 3 U.S. presidential election, if available promptly, could swiftly end the gridlock on a second fiscal stimulus bill.

"The outcome of the election will likely dictate the trajectory for additional stimulus," noted Michelle Meyer, head of U.S. economics for Bank of America Securities.

"A clear victory could accelerate stimulus negotiations. In the event of a contested election, the political environment creates a challenge for additional stimulus."

Democratic control of the Senate, along with a win for the party's presidential candidate Joe Biden, was predicted to yield a stronger near-term economic recovery, according to nearly 75% of 59 analysts who responded to an additional question.

"Opinion polls suggest a growing likelihood of a Democrat clean sweep, which could pave the way for a massive fiscal stimulus in early 2021, focusing on income support and front-loaded energy infrastructure investment projects," said James Knightley, chief international economist at ING.

Reuters Poll: Which U.S. election outcome will yield a stronger near-term economic recovery? https://graphics.reuters.com/USA-ECONOMY/POLL/nmopaybwypa/chart.png

But one of the biggest economic worries accruing from the pandemic is high unemployment. Over 80%, or 41 of 49 respondents, said the U.S. jobless rate would not return to pre-COVID-19 levels until 2023 at least, including two respondents who said it never would.

The wider poll showed the jobless rate averaging 8.3% this year, 6.8% next and 5.5% in 2022. It was 3.5% earlier this year before the pandemic took hold.

The economy contracted in the second quarter at an annualized 31.4% pace, its sharpest decline in at least 73 years. It is forecast to grow 4% this quarter after an expected record rebound of 31% last quarter.

But growth is now forecast to slow further during each quarter next year, and much more than predicted last month.

For this year, the world's largest economy is forecast to shrink 4%, according to the poll of 120 economists.

The consensus for 2021 and 2022 was for 3.7% and 2.9% growth, respectively.

Roughly two-thirds of respondents, or 41 of 62, said their forecasts were based on another round of fiscal stimulus.

Of the economists who expect more stimulus, the median was $1.8 trillion, within a $0.5-$3.5 trillion range.

"If markets sell off violently and the economic data deteriorate, we could see Washington facilitate the passage of stimulus even in a highly contentious environment," added BofA's Meyer.

(Reporting by Shrutee Sarkar; Polling by Tushar Goenka and Richa Rebello; Editing by Ross Finley and Bernadette Baum)

By Shrutee Sarkar


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
BANK OF AMERICA CORPORATION -0.14% 28.99 Delayed Quote.-17.58%
DJ INDUSTRIAL 0.13% 29910.37 Delayed Quote.4.67%
NASDAQ 100 0.87% 12258.211779 Delayed Quote.40.37%
NASDAQ COMP. 0.92% 12205.846315 Delayed Quote.34.79%
S&P 500 0.24% 3638.35 Delayed Quote.12.62%
All news about S&P 500
11:40aInvestors weigh prospects for U.S. corporate earnings as stocks set records
RE
11:15aInvestors Pile Into Risky ETFs During Wild Market Rally
DJ
09:00aWall St Week Ahead-COVID-19 vaccine adoption rates are "wildcard" for U.S. st..
RE
05:45aTesla's S&P 500 Debut Is Set to Put $100 Billion in Trades in Motion
DJ
11/28ELON MUSK : Tesla's Delayed Semi Truck Tests Elon Musk's Ability to Scale Up
DJ
11/27Wall Street Week Ahead: COVID-19 vaccine adoption rates are 'wildcard' for U...
RE
11/27SALESFORCE, DELTA AIR LINES, BEST BU : Stocks That Defined the Week
DJ
11/27Stocks at record high but yields fall, dollar under pressure
RE
11/27Stocks at record high but yields fall, dollar under pressure
RE
11/27Wall Street gains, Nasdaq hits record high
RE
More news
Chart S&P 500
Duration : Period :
S&P 500 Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends S&P 500
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Top / Flop S&P 500
ETSY, INC. 160.55 Delayed Quote.10.66%
CARNIVAL CORPORATION & PLC 21.58 Delayed Quote.4.50%
ILLUMINA, INC. 317.03 Delayed Quote.4.29%
TRACTOR SUPPLY COMPANY 139.37 Delayed Quote.4.09%
VERTEX PHARMACEUTICALS 226.71 Delayed Quote.3.95%
NATIONAL OILWELL VARCO, INC. 13.15 Delayed Quote.-3.31%
COMERICA INCORPORATED 51.49 Delayed Quote.-3.40%
HESS CORPORATION 50.77 Delayed Quote.-3.44%
ZIONS BANCORPORATION, N.A. 39.46 Delayed Quote.-3.64%
DIAMONDBACK ENERGY, INC. 43.52 Delayed Quote.-4.12%
Heatmap :