(New York)

A lot of investors are hoping a new government stimulus package will be a shot in the arm for markets. However, the reality might be something much more disappointing. While a deal would be a nice benefit for the economy, the weight of an autumn case surge and a highly volatile election are heavy on the shoulders of markets. According to one market strategist at Miller Tabak, “We believe an agreement on a new fiscal plan is likely, but we’re not so sure it will help the stock market rally in a sustainable way. The market is still quite overvalued and the combination of the weakening employment picture plus a second wave of the virus does not bode well for any improvement for the ‘E’ part [earnings] of the P/E ratio going forward”.

FINSUM: The stimulus deal will likely be good for a 0.50% move in indexes, but with little continued benefits. It just doesn’t seem enough to re-spark the bull market given everything else going on.