Morning Notes — Stimulus

Stimulus: Mnuchin said he’s trying to complete the fiscal package agreement by the end of the week, which was echoed by Pelosi.  McConnell said he would accept whatever the White House and Democrats agree upon even if that means keeping supplemental Federal unemployment benefits at $600/week.  Markets are priced for a final package to be in the $1T-$1.5T range, but these nuanced developments probably has expectations now at the upper end.

Scenarios: 1) a deal worth less than $1T would be a short-term negative for risk assets broadly with secular growth outperforming; 2) a final package in the $1T-$1.5T range would likely result in reduced volatility, a steady grind higher for the SPX with a preference for momentum and secular growth but value would probably also participate; 3) a deal in the $1.5-$2T range would likely result in incremental money moving into value and; 4) a package worth more than >$2T would be viewed as sufficient funding into year-end and could start a rotation into value with momentum and growth sectors acting as a source of funds.