Congress Departs After Clearing and Trump Signing $2.3 Trillion Rescue Measure

Posted on 03/29/2020 10:18 AM

Treasury Sec. Mnuchin says huge, new SBA programs ready by this Friday


Congress is out to what looks like well into April after clearing a $2.3 trillion Phase 3 rescue measure signed into law by President Donald Trump.


House Minority Leader Kevin McCarthy (R-Calif.), on Fox News' Sunday Morning Futures, said the rescue package provides “$140 billion to the hospitals. This is directly so they get liquidity but also for that personal protection equipment that is so critical, because our medical community is really the modern-day soldier in this virus that we're battling. For the small business owner, we want to make sure we're keeping people employed. And if you are a small business with 500 employees or less to just a gig worker you'll get a guaranteed loan from government for two and a half times your payroll. If you use that money to pay your employees, if you already laid them off, get them back and pay him, the program will pay your rent, pay your utilities, and that is forgiven... this is a grant. If you are a larger business, you get a guaranteed loan, but you also get a retention program in there, through a tax advantage that the government will pay for half of your employee salary. That's to keep people working. Then the individual checks that will go and start in three weeks — $1,200 per person, $2,400 for a couple, $500 per child starting to phase down after earning $75,000. This is critical to get us through the next two months and get this economy coming back.”


Regarding a possible fourth virus-related package, McCarthy said, “I'm not sure we need a fourth package and before we go start drafting a fourth package, I'd like to these three packages we just put out unfold. Remember, it's more than $2 trillion, the largest we've ever seen, to take care and get this economy moving. Remember, for unemployment insurance, we're adding another $600 above what your state pays. We start paying in the first week, and we give you an additional 13 weeks. What concerns me is when I listened to [House Speaker] Nancy Pelosi (D-Calif.) talk about a fourth package, it's because she did not get the things that she really wanted to — to change the election law, a Green New Deal, expand it to make us pay for Planned Parenthood, and expand what you're seeing for sanctuary cities. Those are the things why this bill was held up for a week, but those are the things that we stopped.”


Regarding the timing of the $349 billion Small Business Administration loan/forgiveness programs, National Economic Council Director Larry Kudlow said Treasury Secretary Steven Mnuchin told him the SBA programs would be ready this coming Friday.


Pelosi on Sunday criticized President Trump's response to the coronavirus pandemic, saying "his denial at the beginning was deadly" and that as he "fiddles, people are dying... We should be taking every precaution. What the President, his denial at the beginning was deadly," Pelosi said in an exclusive interview with CNN's Jake Tapper. When asked about Trump suggesting to relax social distancing guidelines in parts of the country, Pelosi said, "His delaying of getting equipment to where it — it continues his delay in getting equipment to where it's needed, is deadly. And now I think the best thing would be to do is to prevent more loss of life rather than open things up, because we just don't know."


Regarding the coronavirus outbreak, the Trump administration is expected to release a risk assessment this week on any timeline to getting portions of the U.S. back to work — with a lot of disagreement and concern regarding any return of workers. Sen. Lindsey Graham (R-S.C.), speaking on Fox News' Sunday Morning Futures, said he had spoken this weekend with Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases. Graham said “I told Dr. Fauci there's a war with the virus. There's a spring campaign plan, a summer campaign plan and a fall campaign plan. This will come back in the fall, but I think the heat in the summer will lower transmissions. The virus generally doesn't do well in heat. To reopen the economy, you have to have a breakthrough in testing. We have to get testing back in real time not four or five days. So if you have a county out there with no infections, the only way we can safely open that county up for business is to have a testing regime, we don't have today. So I'd wait to get warmer before I tried to open up any parts of the economy. We need a risk assessment. Next week, and before we actually start turning the economy on, I think we need a breakthrough in testing and we need the support from the summer — that to me would be the cautious approach.”


Sunday Morning Futures' host Maria Bartiromo then asked Graham, “But what about the president saying the cure cannot be worse than the virus... we are talking about a recession at hand, we're already in a contraction, and we're expecting the economy to worsen, no business, no profits, no economic activity whatsoever.” Graham responded: “Yeah, that's the balance we're trying to make. They're trying to create a bump in the economy. You don't want to create a spike in the disease. The president said safety first. This package (Rescue Plan 3) is going to be a lifeline to people out of work. It is going to be a lifeline to businesses who have no revenue. So this bill we passed is going to help people for a couple of months. The summer will be here before you know it. What I would do is ramp up medical supplies. Then try to focus on testing antibiotics and therapies to destroy the disease in the fall. So this risk assessment is coming out next week about what parts of the economy you may reopen. I don't think you can safely open up any part of the economy until we have more testing.”


Graham then took aim at Pelosi: “She is blaming the pros in the United States for people dying because of the way he's [President Trump] led the country. That's the most shameful, disgusting statement of any politician in modern history. Let me tell you we've seen the best of America from our citizens helping each other, delivering groceries, having special shopping hours for senior citizens. She's the first politician to blame another politician for people dying. This is the same Speaker of the House who held up the bill in the Senate for days, because she wanted same-day voting, she wanted carbon neutrality for the airlines, she wanted $75 million for the Endowment for the Humanities and $25 million for the Kennedy Center. She is the one that held up the package in the Senate for days to get the Green New Deal put in a recovery package. So it's the most shameful, disgusting thing I've heard yet, and it needs to stop.”


On the economic front, jobs will be a major focus as the U.S. economy reels from the impact of the pandemic. The ADP employment report and weekly initial jobless claims report are due out before the March jobs report drops on April 4.


On the agriculture agenda, USDA on Tuesday will release Prospective Plantings and Grain Stocks reports, while the focus remains on whether China will continue to purchase U.S. farm products, including more corn and perhaps adding DDGs to the list, as some sources signal.



Economic reports for the week include:


     — National Association of Realtors reports pending home sales for February. Economists forecast a 1.3% decline, after a 5.2% jump in January. The housing market had been a source of strength for the economy before the coronavirus outbreak.
     — Federal Reserve Bank of Dallas releases its Texas Manufacturing Survey for March. Consensus estimates are for a minus 9.5 reading, a steep drop from February’s 1.2 figure.

     — Conference Board releases its Consumer Confidence Survey for March. Expectations are for a 110.8 reading, down from February 130.7 figure. If estimates prove correct, that would be the lowest reading since the late 2016.
     — Institute for Supply Management releases its Chicago Purchasing Managers’ Index for March. Economists forecast a 39 reading, well below the expansionary level of 50 and down from February’s 49 reading.

     — ADP releases its National Employment Report for March. Consensus estimates are for loss of 360,000 private-sector jobs. That would be the first negative monthly reading since early 2010, when the country was emerging from a recession. (This excludes a blip in September 2017, after hurricanes devastated several U.S. regions.)
     — ISM reports its Manufacturing PMI for March. Expectations are for a 47 reading, down from 50.1 in February.
     — The Commerce Department is likely to show construction spending rose 0.6% in March after gaining 1.8% in the month before.

     — Department of Labor (DOL) reports initial jobless claims for the week ending on March 28, with expectations initial claims for unemployment benefits fell to a seasonally adjusted 3 million. This past week, the DOL reported 3.28 million jobless claims for the week ending on March 21, the highest on record. The previous high was 695,000 claims in October 1982. More recently, jobless claims peaked at 665,000 in March 2009.
     — Commerce Department is expected to report the trade deficit narrowed to $40 billion in February from $45.3 billion in January.
     — Commerce Department is likely to show factory orders rose 0.2% in February, after falling 0.5% in the month before.
     — Fed Balance Sheet
     — Money Supply

     — BLS releases the jobs report for March. Economists forecast a loss of 150,000 nonfarm jobs, after gaining by 273,000 jobs in February and the first decline since September 2010. The unemployment rate is seen rising to 3.9% from 3.5%. Average hourly earnings are likely to have risen 0.2% in March and increased 3.0% from a year earlier. The average workweek is expected to have dropped to 34.1 hours in March from 34.4 hours in the month before. Manufacturing payrolls are expected to have decreased 20,000 in March after rising 15,000 in the month before.
     — ISM releases its Non-Manufacturing Index for March. Economists forecast a 45 reading, well below February’s 57.3 figure. The last time this index had a reading below 50 was in December 2009.


Key USDA & international ag and energy-related reports and events:


Monday, Mar. 30

     Ag reports and events:

  • Export Inspections
  • Rice Yearbook Tables
  • Vegetable and Pulses Yearbook
  • Egg Products
  • EU weekly grain, oilseed import and export data

     Energy reports and events:

  • Russian oil industry meeting with Energy Minister Alexander Novak

Tuesday, Mar. 31

     Ag reports and events:

  • Grain Stocks
  • Prospective Plantings
  • Rice Stocks
  • State Stories
  • Fruit and Tree Nut Outlook
  • Agricultural Prices
  • AmSpec, Intertek Malaysia palm oil export data for March 1-31

     Energy reports and events:

  • API weekly U.S. oil inventory report
  • EIA 914 production report
  • EIA Petroleum Supply Monthly
  • Oman crude official selling price to be released
  • Japan crude oil import data

Wednesday, Apr. 1

     Ag reports and events:

  • Broiler Hatchery
  • Cotton System
  • Fats & Oils
  • Grain Crushings
  • Australia commodity index
  • Brazil soybean, sugar, corn, coffee exports
  • International Cotton Advisory Committee releases monthly outlook in Washingtont

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • U.S. weekly ethanol inventories

Thursday, Apr. 2

     Ag reports and events:

  • Weekly Export Sales
  • Latest U.S. Agricultural Trade Data
  • Dairy Products
  • UN’s FAO World Food Price Index
  • Port of Rouen data on French grain exports

     Energy reports and events:

  • EIA natural gas storage change
  • Saudi Aramco could release crude oil official selling prices (May)
  • Singapore onshore oil-product stockpile data
  • Russia refining maintenance schedule

Friday, Apr. 3

     Ag reports and events:

  • CFTC weekly commitments of traders report
  • Peanut Prices
  • Livestock and Meat International Trade Data
  • U.S. Agricultural Trade Data Update
  • FranceAgriMer weekly update on crop conditions

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts


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