Weekly Rundown: The Rolls-Royce of Stimulus Packages
On Friday, the House passed the biggest financial stimulus package in U.S., history: a whopping $3 trillion.
Here are a few highlights from the bill:
Another $1200 stimulus check for those making $75,000 a year or less
Extended unemployment benefits of $600 a week until January 2021, and this will include gig workers, independent contractors, part-time workers and those who are self-employed through March 2021
$200 billion “Heroes Fund” to provide hazard pay to some essential workers
Extend pause on payment of federal student loans and loan forgiveness of up to $10,000 for both federal and private loans
$100 billion in rental assistance for American renters
Nearly $1 trillion in aid to state and local governments
Expanded coronavirus testing, contact tracing and treatment, and a requirement for the Trump administration to develop a national testing strategy
Enhancing tax credits for employers to keep workers on their payrolls
Speaker Nancy Pelosi said, “I'm so proud of my members just did something so monumental to the American people. For their health, for their lives, for their livelihood, and for our democracy...We couldn’t be more thrilled.”
The Heroes Act still needs to go through the Republican-controlled Senate, who have already indicated they will oppose it, before becoming law. Unfortunately, it seems that the pandemic continues to be a partisan issue.
Continued stimulus has raised concerns about potential inflation. It’s no secret that the American government does not have the spare funds. The Federal Reserve balance sheet can be seen directly from the source here. You can see the addition of $2.5+ trillion in ‘new’ money in March to cover the CARES Act and additional stimulus. The U.S. Dollar, however, continues to experience significant shortage globally, particularly in emerging markets where local currency is less trusted during turbulent times. Current estimates indicate we are $20 trillion away from printing enough U.S. Dollars to satisfy demand.
This Week By The Numbers
After another volatile week in the markets, both the S&P and Dow Jones finished 2% lower, week over week, amid continued warnings by economists of a prolonged recovery. Flight to safety continues with both Gold and Bitcoin rallying.
Top Stories of the Week
36.5 Million Have Filed For Unemployment In 8 Weeks
The number of people filing claims has been steadily dropping for weeks. Still, claims remain at historically high levels, suggesting that the coronavirus isn't done pummeling the U.S. economy. Nearly 3 million people filed for unemployment benefits last week. The unemployment rate shot up to 14.7% last month — the highest level since the Great Depression. Nearly 40% of workers in households making less than $40,000 a year lost their jobs in March. Read Full Story.
Bank of America sold a first-of-its-kind $1 billion COVID-19 bond
The debt offering fits within the “doing-good” or “sustainable investments” niche, but with the twist of being the first from a major bank to fund clients on the front lines of the COVID-19 crisis.
Proceeds will fund not-for-profit hospitals treating COVID-19 patients, businesses that make or supply equipment designed to protect against the virus, as well as companies creating diagnostic tests or vaccines to halt the pandemic. Read Full Story.
Investment banks cut jobs despite coronavirus trading surge
While investment banks have benefited from the short-term increase in trading, they are expected to be hit hard in the long run by a global recession triggered by the COVID-19 crisis and have already begun imposing hiring freezes. In Britain for instance, the number of finance professionals seeking new jobs rose by more than 40% in the first quarter compared with the last three months of 2019. But despite the surge in activity, banks continued with ongoing efforts to cut costs and reduced headcount by an average of 5%. Read Full Story.
Silicon Valley works from home
Twitter CEO Jack Dorsey told his employees that many of them will be allowed to work from home in perpetuity, even after the coronavirus pandemic ends. Google has told employees that the vast majority of them will work from home until 2021, though some will return in the early summer. Facebook will similarly start to reopen offices after the July 4 weekend but will let employees who are able to work from home do so until next year. Read Full Story.
U.S. - China trade conflict continues
The Trump administration moves to cut Huawei off from global chip suppliers, blocking shipments of semiconductors to Huawei Technologies from global chipmakers. The U.S. Commerce Department said it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.” The rule change is a blow to Huawei, as well as to Taiwan’s TSMC, a major producer of chips for Huawei’s HiSilicon unit, as well as mobile phone rivals Apple and Qualcomm. The United States is trying to convince allies to exclude Huawei gear from next-generation 5G networks on the grounds that its equipment could be used by China for spying. Read Full Story.
Visa patent filing would allow central banks to mint digital fiat currencies using blockchain
The California-based payments giant, Visa, which processes upwards of 100 million transactions on average every day, has filed a patent application for a process designed to turn physical fiat currency into a newly digitized version. Managed by a "central entity computer," the system would also remove physical cash from circulation. By the sounds of it, newly created digital fiat would be an exact equivalent, like for like, with physical cash. The denomination and serial number would even be carried over into the new system. Read Full Story.
Product of Week: Coinbase
Bitcoin rallied 14% this week after the long-awaited ‘halving’ on Monday. Ready to buy your first Bitcoin? Use this link to set up your Coinbase wallet and get $10 free.
Best,
Tatiana Koffman —> tatiana@tatianakoffman.com
[Received this email by accident? Unsubscribe below.]
Disclaimer: This email does not contain financial advice and was created solely for informational purposes.