CNBC’s Jim Cramer said Monday that he thinks the stalemate in coronavirus stimulus discussions could be close to breaking, potentially giving a boost to stocks.
“Talks this morning could be fruitful, and I think that therefore I wouldn’t bet against this market right now,” Cramer said on “Squawk on the Street.”
House Speaker Nancy Pelosi, D-Calif., and Treasury Secretary Steven Mnuchin have rekindled talks over another Covid-19 relief package in recent weeks. However, the two sides could not reach an agreement by the end of last week. The amount of aid to state and local governments is one of the key sticking points.
With Pelosi and Mnuchin failing to reach a deal, House Democrats passed a $2.2 trillion relief bill. The Senate is not expected to vote on the legislation. Senate Republicans and the White House don’t want another overall stimulus bill to have such a high price tag. But the White House offer is much closer to the Democratic bill.
There were signs emerging over the weekend that there’s still hope for a deal. On Sunday, President Donald Trump, while being treated for Covid-19 at Walter Reed National Military Medical Center, said on Twitter that Congress should “WORK TOGETHER AND GET IT DONE.” Pelosi told CBS’ “Face the Nation” on Sunday that negotiators were “making progress.”
Cramer said there does seem to be momentum toward a potential deal. “The fact that there are still talks at this late date is very positive. Why waste your time? Why would the secretary waste his time talking to the speaker, and vice versa? So I think there might be a little momentum here.” The “Mad Money” host acknowledged, though, that Senate Republicans could still be an issue.
The last major relief package, the CARES Act, was signed into law in late March and expired at the end of July. The president did extend some additional relief through executive actions. The CARES Act’s provision that barred airlines from reducing head-count expired at the end of September.
The U.S. carriers have said they will follow through on tens of thousands of furloughs, which could be reversed if they receive more aid. Pelosi did give indications last week that Congress could be open to giving the airlines more help, going so far as to ask the carriers to pause their furlough plans.