US Stocks Flat after Senate Approves Aid to Americans – Nice Gesture Ahead of Massive Layoffs and Recession
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The major U.S. stock indexes are edging lower early Thursday despite the Senate unanimously approving a $2 trillion economic relief package late Wednesday, which aims to cushion the blow from the coronavirus outbreak. The stimulus bill now heads to the House of Representatives, which will push to pass it by voice vote Friday morning as most representatives are out of Washington.
At 04:32 GMT, June E-mini S&P 500 Index futures are trading 2458.00, down 9.00 or -0.36%. June E-mini Dow Jones Industrial Average futures are at 21045, up 19 or +0.09% and June E-mini NASDAQ-100 Index futures are at 7443.75, down 24.00 or -0.32%.
The early reaction by investors suggests investors aren’t too impressed by the package. However, when combined with the Fed’s moves earlier in the week, the market could garner some support. The money spent by Americans receiving government aid is not likely to save the country’s economic growth this quarter and certainly won’t have an impact once it’s gone so stock traders are treating it as a “one and done” event, or even a nice gesture on the part of politicians to ease the pain that is coming from massive unemployment and a global recession.
Here’s What’s in the $2 Trillion Coronavirus Stimulus Bill
The bill, designed to offer relief to individuals, the health care system and even an entire corporate sector ravaged by the outbreak, would:
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Give direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child, based on 2019 tax returns for those who filed them and 2018 information, if they have not. The benefit would start to phase out above $75,000 in income for individuals and $150,000 for couples, going away completely at the $99,000 and $198,000 thresholds, respectively
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Boost unemployment insurance, adding $600 per week for up to four months on top of what beneficiaries normally receive from states. It expands eligibility to self-employed people and independent contractors
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Create a $500 billion pool of taxpayer money to make loans, loan guarantees or investments to or in businesses, states and municipalities damaged by the crisis
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Give $25 billion in grants to airlines and $4 billion to cargo carriers to be used exclusively to pay employee wages, salaries and benefits, and set aside another $25 billion and $4 billion, respectively, for loans and loan guarantees
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Provide $17 billion in loans and loan guarantees for unspecified “businesses critical to maintaining national security”
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Put $117 billion into hospitals and veterans’ health care
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Provide $16 billion for the strategic national stockpile of pharmaceutical and medical supplies
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Give $350 billion in loans for small businesses to cover salary, wages and benefits, worth 250% of an employer’s monthly payroll, with a maximum loan of $10 million
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Include a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year
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Require group health plans and insurance providers to cover preventive services related to coronavirus without cost sharing
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Delay payroll tax for employers, requiring half of the deferred tax to be paid by the end of 2021 and the other half by the end of 2022
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Ban companies that take government loans from buying back stock until a year after the loan is paid back
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Bar employees or executives who made at least $425,000 last year from getting a raise
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Stop President Donald Trump and his family members’ businesses from receiving emergency taxpayer relief. The provision also applies to Vice President Mike Pence, heads of executive departments, members of Congress and their family members
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Suspend federal student loan payments through Sept. 30 with no accrual of interest on those loans