Wall Street really wants Congress to pass a stimulus package

US stocks closed modestly lower on Wednesday. The market was trapped in a tight trading range for the whole session, with the three major stock benchmarks repeatedly flipping into positive and negative territory.

All that’s to say that stocks lacked clear direction on Wednesday. Earnings season is in full swing but investors are awaiting a potential stimulus deal out of Washington before the election.

America’s jobs market was strong before Covid-19. The pandemic put an end to that.

A study from the UCLA Labor Center found that half of all gig workers have had to stop working because of the pandemic. And most of those who kept their jobs said their hours have been reduced.

Gig workers and the self-employed aren’t eligible for regular state unemployment benefits, but they can apply for Pandemic Unemployment Assistance, a program Congress created as part of the CARES Act to help them during the coronavirus crisis.

For those who have managed to keep working, the picture still looks dire: 80% of gig workers say that they don’t make enough money to make ends meet, and only 5% said they received hazard pay during this time, according to the report.

The economy grew at a “slight to modest” pace across the nation, the Federal Reserve said in its October Beige Book report this afternoon.

Manufacturing, residential real estate and banking were among the moderate performers, while conditions for commercial real estate deteriorated further, the report said.

On the jobs front, employment continued to recover, though at a slow pace.

It’s almost Thursday, when the Labor Department will tell us how many people filed for unemployment benefits last week.

Economists polled by Refinitiv expect 860,000 people filed for first-time seasonally-adjusted jobless benefits. That would be around 40,000 fewer than the week before, when claims rose.

Continued claims, which count people who have received benefits for two weeks or more, are expected at 9.5 million – down from 10 million in the prior week.

So far so good. But these forecasts don’t tell us anything about what experts predict for the special pandemic-era benefits programs.

These include Pandemic Unemployment Assistance, which is for people who aren’t eligible for regular state benefits such as the self-employed. Another Covid-era program is Pandemic Emergency Unemployment Compensation, which allows people who have exhausted their state aid to get another 13 weeks of benefits.

As usual, the devil will be in the details tomorrow.

We’ve said it before and we’ll say it again: the US economy has a long road ahead of it and the nation is still very much en route.

“We won’t have a full recovery until we deal with the pandemic,” David Kelly, chief global strategist at JPMorgan Asset Management, told Alison Kosik on the CNN Business digital live show Markets Now.

Next week we’ll get a first look at how the economy fared between July and September. A big bounce is expected as those third quarter numbers will include the reopening of the economy after the spring shuttering.

But before we get carried away, Kelly cautions that he’s expecting the “sound of screeching breaks going into the fourth quarter.”

This is just another reminder that the recovery is far from done.

“I think we won’t get a stimulus agreement, unfortunately, before the election,” Kelly said.

Investors are still crossing their fingers for a deal but time is running out, with the election only 13 days away.

Working from home has helped a fair number of businesses. One of them is digital document signature platform DocuSign (DOCU), which allows organizations to manage and use electronic agreements. The company’s stock has soared nearly 200% this year.

Company CEO Dan Springer isn’t worried that his business is in a bubble.

“I acknowledge that the ranges that company’s are trading in, including ours, are very high,” Springer told Alison Kosik on the CNN Business’ digital live show Markets Now.

But the valuation also represents how much opportunity there is for the company.

Now that people are becoming accustomed to doing business remotely, it’s unlikely they’ll go back to the days of pen and paper, Springer said.

America’s recovery has been going for months now, but it’s been running out of steam lately, as various economic indicators, including employment numbers, have shown.

The Back-to-Normal Index created by CNN Business and Moody’s Analytics is at 81%, with the pre-pandemic level measured at 100%.

“If there’s one big takeaway here it’s this: the economic recovery started off strong, but now it’s stuck in a rut,” said CNN Business’ own senior editor Annalyn Kurtz.

Seven months into the pandemic, we’re only about halfway out of the hole that the economy fell into in the spring, Kurtz said.

“Many businesses just can’t get back to normal,” said Mark Zandi, chief economist at Moody’s Analytics, on the CNN Business digital live show Markets Now.

“The only solution here is policy,” he added. Zandi contends that the US economy won’t gain traction until 2021, he writes in a column for CNN Business.

If former Vice President Joe Biden wins and the Senate flips to Democrats, the country would likely see a bigger stimulus package, which would be good for the economy, Zandi said.

Former Disney CEO Bob Iger is joining the board of a vegan dairy startup called Perfect Day.

This is the first time Iger, who is currently the Executive Chairman of Disney (DIS), has joined a non-Disney board since he joined Apple’s board in 2011.

“Perfect Day has established both innovation in its use of technology and novel approach to fighting climate change,” Iger said. He added that the company has “clear leadership in building a category with a multi-year head start in the industry they’re helping to build.”

Dairy alternatives are all the rage right now. Sales of oat milk and plant-based dairy alternatives have soared in recent years and accelerated during the Covid-19 pandemic, as consumers stock up on shelf-stable food staples.

On Wednesday, Impossible Foods, the company known for making plant-based meat, announced that it is currently developing a non-dairy milk. And In July, oat milk company Oatly received $200 million from a Blackstone-led investment group.

It’s lunchtime and stocks are in the red. It’s been a bit of a roller coaster ride in trading today, but the swings themselves have been moderate.

The Dow is down 0.2%, or 57 points, at midday. Between its low and high points, the Dow has swung nearly 250 points.

The S&P 500 is down 0.1%, and the Nasdaq Composite is 0.2% lower.

Stocks are in a holding pattern as investors are anxiously awaiting stimulus news from Washington.

But time is running out. And lawmakers in Congress are increasingly convinced that a deal will have to wait until after the election in 13 days, sources told CNN on Wednesday.

Younger shoppers are leading the recovery in spending, leaving Baby Boomers behind as they increase online purchases and spend more on travel and entertainment.

JP Morgan tracks a panel of 30 million Chase credit and debit cardholders. The data shows spending jumped 3% last week compared to the previous one, most likely because of Amazon (AMZN) Prime Day sales and other retailer promotions.

Amazon’s Prime Day event is usually held in July but was postponed during the Covid-19 pandemic. JP Morgan said the October bump is similar in size to the dip seen in July’s data compared to last year’s Prime Day. 

An hour into the trading day, stocks are higher across the board. Hopes for a stimulus deal seem to prevail – for now – even though time for a deal is running out.

The Dow is up 0.4%, or 106 points, while the broader S&P 500 trades 0.5% higher. The Nasdaq Composite is up 0.6%.

Profit and sales soared at AutoNation, the nation’s largest car dealership group, in a sign of strong pricing for car sales.

The company reported an adjusted net income of $211.8 million from continuing operations, a record profit that nearly doubled year-earlier results.

Overall revenue was down slightly from a year ago, as the number of new vehicles sold fell 11%. But that was partly balanced by a modest increase in the number of used vehicles sold.

The big profit gain came from a decline in the cost of the vehicles, which fell enough to allow it to post a gross profit of $2,535 for every new vehicle sold, up 56% from a year ago. Used vehicles posted a gross profit per vehicle $1,994, up 43%. And the company paid sharply lower interest on the loans backed by the vehicles it holds in inventory.

Shares of AutoNation gained 5% in early trading on the news.

The stellar earnings report for Snap (SNAP) is boosting the entire social media sector Wednesday. Shares of Facebook (FB) and Twitter (TWTR) each surged more than 5%.

Photo sharing site Pinterest (PINS), which is actually the best performing social media stock of 2020, soared nearly 15%. Pinterest shares have now skyrocketed 177% this year, outpacing Snap’s 126% gain.

It’s clear that Wall Street (not to mention millennials and Gen Zers glued to their phones) can’t get enough of these social media stocks. The Global X Social Media ETF (SOCL), which owns Facebook, Twitter, Pinterest and Snap as well as music streaming giant Spotify (SPOT) and dating app Match Group (MTCH), is up more than 50% year-to-date.

The pandemic is setting off a flurry of desperate dealmaking inside the battered shale oil industry.

The latest deal: Pioneer Natural Resources (PXD), one of the earliest frackers, is buying Parsley Energy (PE) for about $4.5 billion. Including debt, the takeover is worth $7.6 billion.

In a sign of the stress in the industry, the Parsley deal – like other recent ones – is being done at a paltry premium of just 8%. And it’s an all-stock transaction, reflecting the cash shortage on balance sheets.

The deal gives Pioneer even more exposure to Permian Basin, the low-cost West Texas oilfield.

It comes the same week that ConocoPhillips (COP) agreed Monday to a $9.7 billion all-stock acquisition of Concho Resources (CXO).

That means that in the span of just two days, two of the top 10 takeovers of American exploration and production companies in this decade were announced, according to energy research firm Enverus.

“This is part of a historic winnowing of US-based independent E&P companies,” Andrew Dittmar, senior M&A analyst at Enverus, wrote in a note. “Those without a deal in hand may be taking a hard look at the remaining options and push additional near-term consolidation.”

With so many people working from home these days, Slack is booming. But there’s a lot of competition in the collaboration software market. And Morgan Stanley is worried that Slack is not going to remain on top.

Morgan Stanley analyst Keith Weiss downgraded Slack (WORK) to an “underperform” on Wednesday. That’s the investment bank’s somewhat diplomatic way of saying “sell.” Shares of Slack slumped 6% on the news.

Weiss is concerned that Slack will fall behind bigger rivals — most notably Microsoft (MSFT), which has bundled its Slack killer Teams in with Office 365 — as well as Google owner Alphabet (GOOGL). But Weiss said the red-hot video conferencing company Zoom (ZM) is also a threat.

“Massive work from home demand for collaboration tools may end up doing more harm than good for Slack,” Weiss wrote, adding that “with Microsoft expected to capture a majority of the market, the increasing competition forces Slack to split the minority portion of the market with Google, Zoom” and other competitors like WebEx owner Cisco (CSCO) and Facebook (FB). 

A spate of recent outages for Slack may not be helping either.

More unemployment talk: Federal Reserve Gov. Lael Brainard poured some cold water on America’s jobs market recovery on Wednesday, citing concerns about trends for women.

“If not soon reversed, the decline in the participation rate for prime‑age women could have longer-term implications for household incomes and potential growth,” Brainard said during a speech at the Society of Professional Economists Annual Online Conference.

In September, the national unemployment rate fell to 7.9%. But along with that, she noted, an unexpectedly large number of people – mostly women – dropped out of the workforce altogether. Workers who drop out of the labor force aren’t included in the unemployment rate.

More than 600,000 women left the labor force in September, when school kicked off again, often still from home. Half of these women were in the prime working age group of 35-44. It was the third-straight month that workforce participation rates declined for prime-age women.

Care of young children is a major factor during the pandemic. The group of women with children aged 6 to 17 who reported having left the labor force for caregiving reasons was up 14%, Brainard noted.

Read more about women dropping out of the labor force here.

The RV boom continues to pay off for Winnebago (WGO), which just posted better-than-expected earnings. Shares jumped 1% in early trading.

Fourth-quarter revenue grew 39%, driven by strong consumer demand as Americans are looking for safe ways to get away during the pandemic.

Winnebago temporarily suspended building RVs in March, but production has resumed.

The stock is up 8% for the year.

US stocks were mixed at the opening bell in New York on Wednesday. The market is in a holding pattern, awaiting stimulus news from Washington.

As House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are set to continue talks today, investors are still crossing their fingers for the possibility of another stimulus deal before the election.

America’s labor market has been improving (though the pace of progress has slowed down as of late). But in New York City, the epicenter at the beginning of the pandemic, the situation is still dire for workers.

The city’s metropolitan area was still down some 620,000 jobs in September compared to the same month in 2019.

NYC’s unemployment rate did fall to 14.1% in September, down from 16% in August. For comparison, it was at 3.7% a year ago.

Job losses in New York City have been widespread, but the industries worst hit are leisure and hospitality; trade; transportation and utilities; and professional and business services.

Across New York State, the unemployment rate fell to 9.7% in September from 12.5% in August. The national unemployment rate was 7.9% in September.

Read more about the state by state unemployment situation here.

House Speaker Nancy Pelosi’s increasingly upbeat tone on a stimulus deal is getting Wall Street excited – but Goldman Sachs is advising clients not to buy the hype.

“Despite an optimistic tone and a slight narrowing of differences, the odds of pre-election fiscal stimulus continue to look very low,” Goldman Sachs economists wrote in a Tuesday note to clients.

In a letter to House Democrats, Pelosi said Tuesday “both sides are serious about finding a compromise” and they have moved “closer to an agreement.”

Yet Goldman Sachs pointed out that some of the biggest issues – fiscal aid to states and liability protections – “remain unresolved.”

Even if a deal is reached between Pelosi and the Trump administration, Republicans have expressed dismay over a $2 trillion stimulus package. Majority Leader Mitch McConnell will have to decide whether to put the bill up for a vote.

“Even if a deal in principle is announced in coming days—this seems possible, but not likely—it looks very unlikely that it would pass before Election Day,” Goldman Sachs wrote.

Economists have warned that failure to reach a deal risks derailing the economic recovery and dealing another blow to struggling hotels, airlines and restaurants.