Daily Market Color December 7, 2020Rates Fall Amid Virus Surge Rates turn lower as virus infection rates rise With virus cases rising across the US, major indices closed lower – the S&P 500 and DJIA fell 0.2% and 0.5% respectively. Treasury yields and swap rates fell 1-5 bps across the curve – the 2y10y spread widened to 78 bps. Congress extends stimulus talks after they fail to meet Friday deadline With funding set to expire on Saturday, Congress hopes to pass a one-week spending bill- buying more time for negotiations. Though the same disagreements remain, Democratic leaders have backed the $908 billion bipartisan bill. Some Republican officials are still not on board, with Senator Mitch McConnell voicing support for a “targeted” $500 billion package addressing small business loans, vaccine funding, and a temporary extension of unemployment provisions Global virus cases pass 67 million with fatalities nearing 1.55 million The UK is launching a vaccine drive tomorrow to administer the Pfizer vaccine (the first Western nation to do so). The US could approve the vaccine as soon as Thursday. In anticipation, NYC has reopened its elementary schools despite its average infection rate exceeding 5% last week. Brexit negotiations resume as officials race against December 31st deadline UK Prime Minister Boris Johnson is traveling to Brussels for crisis talks with European Commission President Ursula von der Leyen. The main issue is that the EU wants to bind the UK government to its current rules on subsidies, labor rights, and environmental standards. The UK is still resisting as the nation prefers to remain sovereign. The pound fell 0.5% on the day.