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U.S. August trade deficit widens to $67.1B

Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Emily McCormick discuss the latest news on the stimulus deal, and the U.S. trade deficit.

Video Transcript

ALEXIS CHRISTOFOROUS: Joining us now is Yahoo Finance's Emily McCormick. Good morning, Emily. So what do you see as moving the markets this morning?

EMILY MCCORMICK: Well, Alexis, taking a look at contracts on the three major indices, as you mentioned, they are trading mixed this morning, but have pushed up into more positive territory, especially on the Dow. Now we did see a strong rally across the three major indices yesterday with both the S&P 500 and Nasdaq rising by the most in nearly one month as of yesterday's close. Now taking a look at the Dow, those gains in turn being led by financials similar to the gains that we saw yesterday coming from that cohort. We have Dow components, JP Morgan and Goldman Sachs, each higher by a bit under 1% this morning.

Now, I also want to highlight that treasury yields are again rising and adding to yesterday's increase. We have the yield on the 10-year note up 2.1 basis points to about 78 basis points here. So again, pushing higher, and helping actually boost that financial sector overall as well, since that, of course, is constructive for those names. Now as you mentioned coming ahead today, we do have Federal Reserve Chair, Jerome Powell, slated to give a speech at the National Association for Business Economics later today on the outlook for the economy during the pandemic. So that's something investors will be watching this morning as well, Alexis.

BRIAN SOZZI: And Emily, clearly this market is going higher on this notion we are nearing a stimulus deal. What's the latest here?

EMILY MCCORMICK: Well, Brian, take a look at the stimulus talks. We do have House Speaker, Nancy Pelosi, and Treasury Secretary, Steven Mnuchin, set to resume negotiations today after reportedly speaking by phone for about one hour yesterday to discuss spending amounts. Now, the two have been regularly been speaking over the phone for the past week or so.

Both sides have reported making progress, but there's still a large gap in dollar sums between these two plans. We had-- the House of Representatives last Thursday voting to advance a $2.2 trillion dollar package, still well above the $1.6 trillion proposal that Mnuchin have put forth. So really trying to narrow the spread there between what House Democrats and the Trump administration officials have been willing to push ahead with in terms of the stimulus sum. So something to keep watching here as we get headlines out of that meeting reportedly happening later today, Brian and Alexis.

ALEXIS CHRISTOFOROUS: Emily, you know, something President Trump has been working to do, or has said he wants to do, is to narrow the gap with the trade deficit, but that did not happen. We got figures out this morning that showed that that deficit widened in August to a 14-year high?

EMILY MCCORMICK: That's right. So that trade deficit coming in at $67.1 billion in August. That was up from $63.4 billion in July, and marking the widest level that we've seen since August 2006. Now that coming as the pandemic weighing heavily on global trade, and we have seen imports start to recover more quickly than exports in the wake of this. And we had imports up 3.2% month over month to $239 billion according to that commerce department report this morning.

We had exports up 2.2% to about $172 billion. Now as you mentioned, Trump, of course, trying to narrow that trade deficit, specifically with one country in particular, and that's with China. We actually did see that deficit decrease during the month. That was down $1.9 billion to $26.4 billion in August. Exports there increasing $1.7 billion and imports decreasing $0.2 billion. Brian and Alexis.

ALEXIS CHRISTOFOROUS: All right, Emily. Thank you.