Stimulus arrives as confidence sinks: Morning Brief
Wednesday December 23, 2020
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A long-awaited stimulus package tries to compensate for rising COVID-19 cases.
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After months of talks, Congress finally passed a new $ 900 billion stimulus package late Monday evening.
The 5,000-page law apparently contains all kinds of extras for all kinds of special interests. For U.S. consumers struggling during the pandemic, key takeaways are the $ 600 checks being sent to millions of workers (and more for families) and an additional $ 300 per week in unemployment benefits.
And at exactly the right time, as that incentive comes when the economy enters what is expected to be a challenging winter.
A winter when consumers have already got mad.
On Tuesday, the Conference Board released its December reading on Consumer Confidence, in which Confidence was held from 9/92. November fell to 88.6. This reading also fell far short of the economists' expectations for a reading of 97.
"Consumers' perception of current conditions deteriorated sharply in December as the COVID-19 resurgence continues to weigh on confidence," said Lynn Franco, senior director of economic indicators at The Conference Board.
“As a result, consumer vacation intentions, which had improved noticeably in October, have withdrawn. On the flip side, intentions to purchase devices have risen as consumers continue to settle at home. Overall, growth appears to have weakened further in the fourth quarter, and consumers don't expect the economy to pick up any momentum in early 2021. "
Of course, a new stimulus package will not change the trajectory of the COVID-19 cases here in the US.
Legislators across the country have warned against indoor gatherings during the holiday season. However, if the spike in COVID-19 cases is expected after Thanksgiving, the first few weeks of January after Christmas could be challenging and further hurt confidence in recovery.
And while vaccinations have started in the US, the two currently approved vaccines require two-dose therapy. Nobody has finished the entire treatment yet. And so we are a few months away from the full power of the vaccine, which is reaching large sections of the population.
Back in November, we argued that breakthroughs on the vaccine front made the case for economic incentives clear. Consumers had to be passed over until a wider range of economic activities could be safely resumed.
With the financial assistance now on its way to many U.S. households, consumers may be able to follow directions from health professionals to stay home and slow the spread of COVID.
After all, that's the point of that incentive - helping people make ends meet while staying safe and at home.
By Myles Udland, reporter and presenter for Yahoo Finance Live. Follow him at @MylesUdland
What to see today
7:00 a.m. ET: MBA Mortgage Applications, Week Ending December 18 (1.1% the previous week)
8:30 a.m. ET: First unemployment claims, week ending December 19 (880,000 expected, 885,000 the week before)
8:30 a.m. ET: Continuing Claims, Week Ending December 12 (5.560 million the previous week)
8:30 a.m. ET: Durable goods orders, tentative in November (0.6% expected, 1.3% in October)
8:30 a.m. ET: Orders for non-defense-related capital goods excluding aircraft, tentative in November (0.8% last month)
8:30 a.m. ET: Non-defense capital goods shipments excluding aircraft, tentative in November (2.4% in October)
8:30 a.m. ET: Personal Income, November (-0.3% expected, -0.7% October)
8:30 a.m. ET: Personal Expenses, November (-0.2% expected, 0.5% in October)
8:30 a.m. ET: Month-to-Month Personal Consumption Core Spend, November (0.1% expected, 0.0% in October)
8:30 a.m. ET: November core spending on personal consumption year over year (1.4% expected, 1.4% in October)
9:00 a.m. ET: FHFA property price index month after month, October (0.5% expected, 1.7% in September)
10:00 a.m. ET: Vibes at the University of Michigan, December finals (80.9 expected. 81.4 in November)
8:30 am ET: Paychex (PAYX) is projected to post adjusted earnings of 66 cents per share on revenue of $ 954.06 million
Trump threatens COVID relief deal with demand for $ 2,000 stimulus checks [Yahoo Money]
FTSE discusses upcoming COVID lockdowns amid concerns about Brexit and the US economy [Yahoo Finance UK]
XRP Crashes As SEC Official Charges Against Ripple [Yahoo Finance UK]
Elon Musk says Tim Cook "refused" to meet with him about Apple's purchase of Tesla [Yahoo Finance]
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