Welcome to Thoughts on the Market.

I'm Michael Zezis, Head of Public Policy Research and Municipal Strategy for Morgan Stanley.

Along with my colleagues bring you a variety of perspectives.

I'll be talking about the intersection between U.S. Public Policy and Financial Markets.

It's Wednesday, February 3rd at 11 a.m. in New York.

Republicans left a White House meeting on Monday, still far apart from Democrats on a

COVID relief stimulus package.

But we think investors shouldn't view this as a warning sign that the deal may not get

done.

They're signal of legislative progress.

Yes, it seems counterintuitive to say partisan disagreement clears a path for Congress

to approve a 1-1.5 trillion dollar stimulus deal, and in many other circumstances that

would be true.

But in this situation, that's precisely our view.

Let's unpack this.

There may be plenty of good faith between the 10 Senate Republicans and the Biden administration,

which sat down to discuss COVID relief this week.

But that doesn't mean their views on the size of legislation are close enough to strike

a deal anytime soon, as evidenced by the 1.3 trillion dollar gap in their proposals.

So while bipartisanship is a laudable goal, it stands to reason that any bipartisan negotiation

could be long and drawn out.

While that's happening, it's possible the COVID situation improves as more vaccines are

...