What’s happening: The White House has said President Donald Trump will sign the bill once it reaches his office, paving the way for the bill to quickly become law.
It is the second-largest federal stimulus package of all time, behind just the $ 2 trillion CARES bill approved by Congress in March. But some are already warning that this will not be enough. The final deal did not include aid to state or local governments, a priority for Democrats, or protections for businesses against coronavirus lawsuits, a Republican goal.
Pandemic unemployment benefits are expected to run out for millions by mid-March.
“The package is a fraction of what is needed to deal with the monumental economic damage caused by [the] inadequate response to the Covid-19 pandemic, ”Thea Lee, president of the progressive Economic Policy Institute, said in a statement. She added that it would take around $ 3 trillion to “stop the economic hemorrhage … and build a strong recovery.” “
Democrats are signaling that more help could be provided early next year.
“Our job is far from over,” tweeted President-elect Joe Biden. “Starting in the new year, Congress will need to immediately get to work in support of our Covid-19 plan. “
Wall Street thinks it’s easier said than done. Goldman Sachs economist Alec Phillips told clients it “looks like the latest big tax package focused on Covid,” assuming Biden faces a divided Congress next year.
“We expect another debate on budget support in [the first quarter], before the extended unemployment provisions expire in March, ”Phillips said. “However, given that Congress has excluded the more difficult issues from the current package, it seems unlikely that lawmakers will be able to agree on these in subsequent legislation. “
Investor perspective: The stimulus news helped save stocks from the drop seen in Europe on Monday, sparked by concerns over a new variant of Covid-19 in the UK. But it’s not yet clear what attitude will prevail – enthusiasm for continued government support or new fears about the trajectory of the pandemic.
UK supermarkets warn of shortages amid chaos at borders
Fears over the potentially highly infectious variant of the coronavirus have left the UK increasingly isolated, causing disruption to the country’s economy just days before the Christmas holidays and the end of the Brexit transition period.
The latest: France’s decision to suspend transport links with Britain for 48 hours has resulted in long lines of trucks waiting to cross the border. UK supermarkets and supply chain experts have warned as early as this week of potential shortages of some products if restrictions are not eased soon.
“If nothing changes, we’ll start to see gaps over the next few days on lettuce, salad leaves, cauliflower, broccoli, citrus – all of which are imported from the EU at this time of year. ‘year, “Sainsbury’s said in a statement. “We hope that the UK and the French [governments] can arrive at a solution that prioritizes the immediate passage of products and food. Rival Tesco issued a similar warning.
Prime Minister Boris Johnson sought to allay public fears at a press conference on Monday, saying he had spoken with French President Emmanuel Macron and that both sides were working on a speedy resolution.
He stressed that UK supermarket supply chains are “strong and robust” and that “the vast majority of food and medicine supplies come and go as usual”.
Grocery stores are not the only products affected, however. Toyota has decided to close its manufacturing plants in France and the UK earlier than planned for the winter break, blaming the traffic chaos and “the uncertain nature of how long the borders will be closed for business logistics “.
Testing truck drivers for the coronavirus is being discussed as a possible solution. But it’s not clear that this could quickly end the stalemate.
The Brexit Factor: Chaos in UK ports gives the country a taste of the potential disruption of food and other vital supplies that could accompany a ‘no deal’ Brexit in just nine days.
The UK left the European Union earlier this year, but continued to benefit from free trade with its main export market and supplier under transitional arrangements that expire on December 31. Talks on a new deal to avoid tariffs and quotas have so far failed to reach a deal, raising fears of further disruption and price hikes in the new year.
SoftBank joins Wall Street’s SPAC craze
The newly formed company, SVF Investment Corp., will be listed on the Nasdaq under the symbol “SVFAU”. It will initially seek to raise $ 525 million, but that figure could reach nearly $ 605 million if there is strong interest.
Remember: SPACs, or so-called “blank check” companies that go public only to raise funds to buy existing businesses, have taken off this year. More than $ 75 billion was raised through U.S.-listed PSPC IPOs in 2020, according to Refinitiv. That’s a huge jump from 2019, when these companies raised just $ 13.1 billion.
The challenge now will be to find suitable buyout targets, without running out of investors looking for deals.
SoftBank’s investment record could be both a blessing and a curse. The conglomerate’s early bet on Alibaba has paid huge dividends. But after a series of embarrassing losses, including WeWork’s botched IPO backed by SoftBank, CEO Masayoshi Son has been forced to fold and has spent this year racking up heaps of money.
PSPC’s announcement signals that it is ready to return to the offensive. The question is whether Son will be welcomed with open arms?
U.S. consumer confidence data for December and existing home sales for November are both showing at 10 a.m. ET.
Coming tomorrow: The most recent batch of data on Americans’ personal income and spending will show how portfolios fared before Congress approved another stimulus package.