As lawmakers on Capitol Hill bickered over the specifics of a massive stimulus plan aimed at rescuing the world’s largest economy from the abyss, markets continued to throw off a veritable smorgasbord of consequential and amusing headlines.
Of course, many of your favorite anchors are now reporting live from their living rooms, so you don’t get the full, dramatic production – after all, there’s something disarming about someone speaking to you via what amounts to a Skype feed from their couch with a potted plant as the backdrop.
In any case, gasoline futures slumped a remarkable 17% on the day, hitting 50 cents a gallon for the first time in nearly two decades as travel restrictions, border closures and quarantine measures essentially rule out travel and storage swells.
Meanwhile, Apple shares sank below the vaunted $1 trillion market cap line for the first time since September.
The shares are down 18% this month coming off February’s near 12% slide. On the bright side, the company’s plea for Apple Watch to be excluded from the China tariffs was approved by the USTR, a letter dated Friday says.
As Democrats and Republicans battle it out on Capitol Hill, Berlin finally got moving. Germany will incur new debt in order to finance an €800 billion package of measures aimed at supporting the world’s fourth-largest economy, coming off a horrible year for growth. Germany, you’re reminded, was still mired in a deep industrial slump even before the virus hit. Until now, the country’s legendary aversion to debt and almost pathological commitment to the “black zero”, left Germany at the mercy of the trade war, but COVID-19 tipped the scales.
Read more: ‘A Tragic But Important Lesson’ – In Germany, Fear Of Deficit Demon Collides With Recession Reality
Germany will up bond sales in Q2 to 87.5 billion euros, from the €55 billion total planned in December. The rescue package includes €156 billion in debt for social spending, a €50 billion fund for the self-employed and a €600 billion rescue fund comprised of €400 billion in guarantees, €100 billion in loans through KfW (the development bank) and another €100 billion for the government to take equity stakes in struggling companies.
Economy Minister Peter Altmaier effectively warned speculators that Berlin will wipe them out at the first sign of a short attack. “To everyone in hedge funds or elsewhere… make no mistake about it: We are determined to assist our companies in this situation”, he said.
Angela Merkel – who had been in quarantine – tested negative for the virus.
Oh, and in case you were wondering what various US assets are “saying” about the probability of a recession stateside, here’s an update on JPMorgan’s model:
The Democrats are asking for their pound of flesh- memories are long about the GOP blocking stimulus during the Obama administration, especially after 2010. The Democrats are looking to get more aid for the lower income 60% of the US and to include the very needy vs. a high tilt to corporate bailouts and such from Mitch. They cannot negotiate for too long, but they are right to get what they can for the most in need. Besides corporate aid on offer from the GOP and in fairness for other aid, they are especially keen to get help for municipalities, hospitals and front line health care professionals. The market is not going to get fixed until we can see an inflection point for virus cases, and the credit markets start to function properly. Until then, there is going to be terrible dislocation, both economically and for public health.
I’d encourage folks with strong feelings about the actions of our federal government to email their representatives. I find myself a fiscal conservative reaching out to Democrats to preclude unwarranted corporate bailouts. Let the market Btch slap the companies that profit from the spread of virus. On the other hand, funding a medical response by giving money to states is another matter entirely. The Fed is already intervening in markets plenty to directly help corporations. In my humble opinion, and my representatives know it. The larger point being, it is reasonable to expect it to take some time for this administration and this congress to set aside personal agendas and do something that might help. We help them by speaking up. At least that is how it was explained to me in school.
Dems also pushing for funds to be included to expand early and absentee voting should the virus still be an issue come November. Wouldn’t want the president* to have to postpone the election due to public health concerns of large gatherings.
While guns and bullets yea missiles and jets are useless in defense.