Brexit Deal Unlikely; Stimulus Talks Close to Breakdown

Brexit Deal Unlikely; Stimulus Talks Close to Breakdown

There will most likely be no free trade agreement in place between the U.K. and EU. This is when the post-Brexit transition agreement lapses at the end of the month. This was a statement from European Commissioner Ursula von der Leyen after an EU summit on Friday.

U.K. Prime Minister Boris Johnson also warned that a deal was unlikely. The EU inserted last-minute demands directed at ensuring the U.K. doesn’t deviate from its regulatory standards in future. 

Last week, the pound rose above $1.35 for the first time in 2 ½ years on hopes of a deal. The currency fell back below $1.3200.

The EU leaders were more successful in unblocking a deadlock over their multi-year budget and the 750 billion-euro Recovery Fund. It will be financed by the first-ever large-scale issuance of jointly guaranteed EU debt. Moreover, the euro dipped 0.2% to $1.2117 by 6:30 AM ET (1130 GMT).

Stimulus Talks Close to Breakdown

Optimism on a fiscal relief package for the U.S. economy is fading. Senate Republicans dug in their heels over the issue of liability protections for businesses, schools and other entities.

Reports said aides to Senate Majority Leader Mitch McConnell see no possible path forward for the $908 billion package. The package was crafted by a bipartisan group of lawmakers, due to its failure to address this issue.

Furthermore, progress on the stimulus package is also being held up by a familiar piece of political theater. That is over extending the government’s funding, which is due to expire on Saturday.  A stopgap spending bill to cover the next week’s business was postponed on Thursday.  

Initial jobless claims rose sharply last week, to a three-month high of over 850,000. But it seems to have little success in concentrating  lawmakers’ minds.

Meanwhile, in stock market news, U.S. stocks are set to open lower. Investors are disappointed at the lack of progress in U.S. stimulus talks. Additionally, concern about the prospect of a messy end to the Brexit process is dragging the stock market.  

By 6:30 AM ET, Dow Jones Futures fell 242 points, or 0.8%. The S&P 500 Futures and NASDAQ Futures lost 0.9% each.

Aside from Airbnb and Doordash, stocks likely to be in focus later include Walt Disney (NYSE:DIS) stocks. Its CEO issued an aggressive forecast for subscriber growth at its streaming channel over the next few years. Also, Ferrari NV (NYSE:RACE) CEO resigned overnight, citing personal reasons.

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