President Donald Trump’s call for a $1 trillion stimulus package to fight the effects of the coronavirus caused markets to rebound from Monday’s massacre, plus more in Wednesday’s Closing Bell on Money & Markets.
The Top Story
A possible $1 trillion stimulus package proposed by President Donald Trump helped markets rally back from its worst day since 1987.
On Tuesday, White House officials said Trump and Treasury Secretary Steven Mnuchin may ask Congress for an aid package that includes direct payments or tax cuts for Americans, small business assistance and airline and industry relief.
The Wall Street Journal reported that $250 million of the package could help make direct payments to Americans as the coronavirus has shut down most of the country.
Sources said $200 billion to $300 billion could be earmarked for small business assistance while $50 billion to $100 billion would be for airline and industry relief. The additional $500 billion to $550 billion would come in the way of direct payments and/or tax cuts to U.S. citizens, many of whom, such as bar and restaurant workers, are out of work due to the outbreak.
Markets responded with a rally coming a day after the worst market decline since 1987.
The Dow rose 1,049 points, or 5.2% on the day. The S&P 500 moved 6% higher while the Nasdaq Composite rose 6.2%.
Stock Market Update: Closing Bell*
S&P 500: 2,529 (+6%)
DOW: 21,237 (+5.2%)
NASDAQ: 7,334 (+6.2%)
GOLD: $1,531 (+3%)
BITCOIN: $5,366.74 (+6.8%)
U.S. 10-YEAR YIELD: (1.095%
*- as of 4:15 p.m.
A Big Win
Our morning “be on the lookout” included Amazon.com Inc. (Nasdaq: AMZN) as the e-commerce giant announced it was hiring 100,000 warehouse and delivery workers to deal with increased demand. Shares of Amazon were up 7.6%.
After announcing clinical trials for its COVID-19 vaccine, Regeneron Pharmaceutials Inc. (Nasdaq: REGN) shares jumped nearly 12% in afternoon trading.
In other coronavirus-related news, Thermo Fisher Scientific Inc. (NYSE: TMO) shares shot up 5.4% after it reported shipping its FDA-approved COVID-19 tests.
M&A News
Costco Wholesale Corp. (Nasdaq: COST) is spending $1 billion to acquire Innovel Solutions from Transform Holdco. Innovel specializes in delivery and installation services.
Golden Nuggets
Precious metal futures were mixed as U.S. equities mounted a rebound today.
Gold futures bounced after an early-morning tumble. Gold was up 3% to $1,531 an ounce while silver futures fell 1.1% to $12.67 an ounce.
Platinum prices moved 0.6% higher to trade at $661.80 an ounce. Palladium continued its slide, falling nearly 1.5% to $1,491.10 an ounce.
Cannabis Corner
Despite the coronavirus outbreak, Canadian cannabis stores in Ontario and Alberta have reported “unprecedented demand” for cannabis products.
Spiritleaf CEO Darren Bondar told Marijuana Business Daily that stores have “experienced an unprecedented demand for cannabis over the weekend with sales up 20% over the previous one and a record number of customers served.”
Sales in Ontario jumped 80% as demand has dropped cannabis prices. Quebec has also seen an increase in marijuana sales.
Credit Market Signals Tougher Economic Times Ahead
With the U.S. economy in flux, credit markets are suffering a crunch that could signal a financial crisis.
As companies fight the impacts of the coronavirus, they are drawing down credit lines to secure more cash. That is an effort to combat the potential for revenue shortfalls.
Spreads across the markets are wider, specifically in the commercial paper market, which could suggest the recent downturn in the economy could be more of a financial crisis.
“We’re speeding toward one. We need to deal with this. This is real now. All the red flags are raised,” Grant Thornton chief economist Diana Swonk told CNBC.
On Tuesday, the Federal Reserve said it would try to help companies facing hardships because of the coronavirus spread. Treasury Secretary Steven Mnuchin also discussed the possibility of a stimulus package, including help for the airline industry.
Today’s Big Winners:
(as of 3:15 p.m. EDT)
Dow Inc. (NYSE: DOW) +20.3%
Dominion Energy Inc. (NYSE: D) +15.6%
KLA Corp. (Nasdaq: KLAC) +13%
Citrix Systems Inc. (Nasdaq: CTXS) +13%
Intel Corp. (Nasdaq: INTC) +9.8%
Today’s Big Losers:
(as of 3:15 p.m. EDT)
Noble Energy Inc. (Nasdaq: NBL) -23%
Apache Corp. (NYSE: APA) -16.7%
Marriott International Inc. (Nasdaq: MAR) -12.5%
United Airlines Holdings Inc. (Nasdaq: UAL) -9.5%
Boeing Co. (NYSE: BA) -7.6%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.