The market is being held hostage by the fiscal stimulus negotiations. Traders are parsing each new headline as they try to figure out the political calculus involved in dealmaking.
If a deal is made the market will almost certainly spike higher at least temporarily, but it is likely there will be some sellers ready to lock in gains. If no deal is made there will be a drop, although there are already dip buyers that will be looking to add to their favorite names.
Of course, there is the likelihood that the process will just keep dragging out and leave everyone frustrated. We saw something very similar during the China trade negotiations, which dragged out for many months.
I've been doing some smaller trades today but one position I did establish is something that I seldom even look at. I almost never buy S&P 500 names but I bought some Walmart, Inc. (WMT) today. It is big, boring, and usually quite slow but I believe that retail trends into the end of the year will make it a safe harbor play. It is increasingly competitive with Amazon (AMZN) , has the potential of this TikTok deal, and is going to benefit regardless of what may happen with the Covid-19 crisis.
The stock isn't particularly cheap. However, the company did post EPS growth of 23% in the quarter ended July 31 and could see some estimate increases based on current trends.
Technically, it has turned off very strong support in the $136 area and is enjoying some momentum.
I started my position today but anticipate that I'll add to it on pullbacks. This is not a big trade but looks like a place to park some capital, especially if the market sees an increase in volatility.