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.
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: