We came into the week expecting the Democrats to use the expiration of the $600/week unemployment as ransom for their bigger demands, which include mail-in voting. 

The Republicans have made an attempt to strip that out from the stimulus package negotations, and just extend it.  But the Democrats aren’t having it.  It’s too valuable a bargaining chip for them.  And they will now hold the economy hostage for their demands.  

That doesn’t bode well for the economy, as $2,400 to $4,800/week of household income for the 30 million unemployed goes away today.

Again, as we discussed last Friday, this may require Trump to use Executive Order  to extend the federal unemployment checks.

Can he do it?  Congress has exclusive control of the purse.  But once they’ve appropriated funds, “the President and executive branch enjoy considerable discretions has to how those funds are spent” (paper on Presidential Spending Discretion and Congressional Controls, here).  Mnuchin said earlier this week that there’s still over a trillion dollars yet to be spent from the first package. 

With all of this building, we ended last week with a look at this S&P chart, as it was breaching this very important trendline that represents the recovery from the March lows. …