A $2 trillion boost from Congress is a good start. Expect more

CNN's Julia Chatterley previews the $2 trillion stimulus bill struck by the White House and Senate in a historic deal to help the economy during the Covid-19 pandemic.

Posted: Mar 25, 2020 9:30 AM
Updated: Mar 25, 2020 9:30 AM

Here's a much-needed dose of good news for investors: Lawmakers in Washington have reached an agreement on a sweeping $2 trillion economic stimulus package that will help support companies and workers harmed by the coronavirus pandemic.

Anticipation of such a deal sent US stocks soaring on Tuesday, with the S&P 500 rising 9.4% — its tenth best day ever and strongest performance since 2008, according to Bespoke Investment Group.

But, as has become typical, stocks are struggling to hold onto their gains. European shares powered higher in early trading but have since pulled back.

Goldman Sachs told clients Tuesday that the "swift and large" global policy response could help steady markets — but commitments may need to get even bigger before that happens.

The investment bank said that three other components are also needed to stabilize markets: A sign the infection rate is peaking, an indication the economic downturn may be slowing and cheap valuations. With the exception of valuations, we're not quite there yet.

In the meantime, major risks remain — especially on the unemployment front. If joblessness shoots up, Goldman Sachs warns that companies could wind up short on cash as demand falters even more, raising the chances that the recession "becomes more entrenched."

Andrew Hunter, senior US economist at Capital Economics, thinks the $2 trillion stimulus plan will help limit corporate bankruptcies and thus job losses.

But the research firm still sees the unemployment rate in the country soaring above 10%, and the economy contracting at an annual rate of as much as 40% between April and June.

Capital Economics also thinks that the US government will need to add to its $2 trillion efforts down the line.

"There is no reason to believe that Congress will now sit on its hands," Hunter told clients. "Fiscal stimulus measures could easily be ramped up even further over the next couple of months as the economic damage becomes clear."

Nike earnings show a way forward

How can retailers navigate the coronavirus pandemic as stores around the world shut down? Investors think Nike could offer some clues.

The retailer's revenue between December and February beat investors' expectations despite a heavy reliance on China, pushing shares up 12% in premarket trading.

Driving the enthusiasm: Nike said that sales in Greater China fell 4% last quarter, after 22 consecutive quarters of double-digit growth. But online sales in the region increased by more than 30%, helping to compensate for the fact that three quarters of its locations were temporarily closed. The company said that nearly 80% have now reopened.

"We're seeing the other side of the crisis in China," CEO John Donahoe told analysts Tuesday.

UBS analyst Jay Sole said the strength of online sales eases some concerns about cash flow and will put Nike in a better place than expected when the crisis ends. But the company still faces tough months ahead. All stores outside Greater China, Japan and Korea have been closed since March 16.

See here: Retailers will soon need to start offering huge discounts on spring clothing in an attempt to clear out inventory, my CNN Business colleague Nathaniel Meyersohn reports.

"People aren't interested in buying anything but the things they need to stay alive," said Mark Cohen, director of retail studies at Columbia Business School.

Why gig economy workers need help now

Millions of gig economy workers across the world are facing an impossible choice as a result of the coronavirus pandemic: break lockdown rules, or stay home and earn nothing, my CNN Business colleague Hanna Ziady reports.

The dilemma was illustrated Tuesday by images of packed subway cars in London less than 12 hours after Prime Minister Boris Johnson announced stricter social distancing measures as part of a nationwide lockdown.

The new coronavirus restrictions mean people are only allowed to leave their homes for medical reasons, to grocery shop or exercise once a day, and to travel to and from work when absolutely necessary.

But lockdowns won't be effective if individuals who cannot work from home continue reporting to job sites because not doing so would deprive them of income. "Many of those traveling to work today ... work in the gig economy or are freelancers," London Mayor Sadiq Khan said Tuesday on Twitter. "A proper package of support for these workers would alleviate this situation."

Up next

The chipmaker Micron reports results after US markets close.

Also today:

  • US durable goods orders for February arrive at 8:30 a.m. ET.
  • The latest data on US crude oil inventories follows at 10:30 a.m. ET.

Coming tomorrow: G20 leaders will meet by videoconference to discuss the coronavirus pandemic.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 51079

Reported Deaths: 2756
CountyConfirmedDeaths
Marion12019693
Lake5588248
Elkhart353959
Allen2939134
St. Joseph210669
Hamilton1691101
Cass16449
Hendricks1454100
Johnson1340118
Porter82638
Tippecanoe7709
Vanderburgh7276
Clark69544
Madison67464
LaPorte61628
Howard59858
Bartholomew59745
Kosciusko5754
Marshall5449
Noble51328
LaGrange4849
Boone48244
Jackson4783
Delaware47152
Hancock46736
Shelby45425
Floyd40644
Morgan34231
Monroe34028
Grant31826
Dubois3046
Henry30018
Montgomery29720
Clinton2903
White27410
Dearborn25823
Decatur25632
Lawrence25225
Vigo2528
Warrick25029
Harrison21722
Greene19432
Miami1932
Jennings17912
Putnam1738
DeKalb1694
Scott1649
Wayne1546
Daviess15017
Perry14710
Orange13723
Steuben1362
Jasper1352
Ripley1307
Franklin1278
Gibson1202
Wabash1162
Carroll1142
Fayette1067
Whitley1066
Starke1043
Newton10010
Huntington942
Jefferson862
Wells821
Randolph794
Fulton731
Knox710
Jay700
Washington681
Pulaski661
Clay645
Rush613
Posey570
Spencer541
Owen521
Benton510
Sullivan501
Adams491
Brown431
Blackford402
Fountain352
Crawford330
Switzerland320
Tipton321
Parke270
Martin260
Ohio230
Vermillion200
Warren151
Union140
Pike110
Unassigned0193

Ohio Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 64214

Reported Deaths: 3036
CountyConfirmedDeaths
Franklin11724445
Cuyahoga8979393
Hamilton6781207
Lucas2952305
Marion274539
Montgomery244035
Summit2327209
Pickaway222241
Mahoning1928239
Butler182147
Columbiana137860
Stark1214114
Lorain112069
Trumbull104578
Warren97725
Clark80010
Delaware69815
Fairfield66717
Tuscarawas60410
Lake58923
Medina58232
Belmont56922
Licking56812
Miami50631
Portage49259
Wood48851
Clermont4737
Ashtabula44744
Geauga42543
Wayne37253
Richland3715
Allen35641
Greene3439
Mercer29910
Erie27122
Holmes2595
Darke25626
Huron2402
Madison2169
Ottawa17324
Sandusky16015
Washington14620
Ross1443
Coshocton1423
Athens1391
Crawford1385
Putnam13715
Hardin12312
Morrow1201
Auglaize1094
Jefferson1092
Muskingum1001
Union931
Preble901
Monroe8917
Hancock861
Lawrence830
Guernsey823
Clinton811
Hocking809
Williams762
Shelby744
Logan711
Ashland672
Carroll673
Fulton670
Scioto670
Wyandot635
Brown611
Fayette550
Defiance533
Knox531
Champaign511
Highland501
Van Wert471
Perry441
Seneca412
Henry330
Paulding300
Jackson280
Pike280
Adams261
Vinton232
Gallia201
Noble140
Harrison131
Meigs130
Morgan110
Unassigned00
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