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Stocks climbed today with the Standard & Poor’s 500 up 0.80% at the close, as investors and traders decided that the talk out of Washington about another coronavirus stimulus effort was more than just pre-election hot air.

The Dow Jones Industrial Average finished ahead 0.43% and the NASDAAQ Composite was up 0.50%.

The day ended with House Speaker Nancy Pelosi saying that there could be no action on a stand-alone bill to aid airlines or any other sector of the economy without an agreement with the White House and Republicans on a broader stimulus package.

Despite those remarks the market concluded that a phone call on Wednesday from Treasury Secretary Steve Mnuchin to Speaker Pelosi “broaching” the idea of continued stimulus talks extended a “walk back” that President Donald Trump had begun on Tuesday night from a Twitter post saying he was ending all talks. Since then President Trump has said he would be open to a separate bailout package for airlines in the range of $25 billion and to separate legislation that would send out another round of $1200 checks to every American and that would renew the Payroll Protection Program of loans/grants to small businesses.

Pelosi had initially indicated that she would be open to moving an airline bailout package through Congress separately from any larger, comprehensive coronavirus stimulus package. But her comments today seemed to be a toughening of her stance against piecemeal measures absent an agreement on a broader package.

“They just want money for the president to spend money on who knows what?” Pelosi said at a news conference. “There is no stand-alone bill without a bigger bill.”

Despite all this Wall Street remains wedded, it seems to me, to a belief that there will be an airline bailout–at the least–and that there might even be a wider stimulus package. Shares of American Airlines (AAL), for example, closed up 0.65% today. They had been ahead by 3.56% at 11 a.m. New York time.

I find this belief increasingly delusional.

In practical terms, terms the only way to get an airline bailout through Congress before the November 3 election would be if every Senator agreed not to object to the legislation and to pass it without amendments. Already two Republican senators, Pat Toomey of Pennsylvania and Mike Lee of Utah, have said today that they oppose a bailout for the airline industry without some protections for taxpayers and the ability to make changes to the legislation.

In political terms, the election is just 27 days away and neither Republicans or Democrats are interested in serious legislative efforts that might wind up aiding the other side before the vote.
What we’re likely to see over the next three plus weeks is more empty rhetoric. President Trump will continue to insist, as he did today, that multiple stimulus efforts are on the table. “We started talking again. And we’re talking about airlines and we’re talking about a bigger deal than airlines,” Trump said an interview with Fox Business. “We’re talking about a deal with $1,200 per person, we’re talking about other things.

”I don’t have any idea of who Trump’s “we” might be.

For her part I expect Speaker Pelosi to keep repeating her manta of “I’m always optimistic.”

And for Senate Majority Leader Mitch McConnell keep repeating his “it’s too much money” remarks. “The speaker insists on an outrageous amount of money” McConnell said today, adding that there are members of his GOP majority that think enough has been done already. “Hopefully there will be a way forward soon.”

The markets want to believe. But a diet of nothing but words isn’t enough to sustain an upward trend.

Just saying.