Trump Calls Decision on Reopening U.S. Economy the Biggest of His Life

Posted on 04/11/2020 12:46 PM

EU announces ban on U.S. poultry meat, products following turkey bird flu incident

 


In Today’s Updates


 

* Trump describes decision on when and how to reopen country most difficult in his life
* EU bans all U.S. poultry re: turkey bird flu; casts shadow over U.S./EU trade talks
* Some possible parameters surface re: coming Covid-19 ag aid proposal
* A virtual summit of G20 energy ministers fails to agree on plan re: oil glut
* Americans start getting Covid-19 aid payments
* Airline aid coming soon
* Tax ambiguity lurking in small-business loan forgiveness program could cost billions
* Apple, Google partner on coronavirus contact-tracing technology
* Trump admin. increasing ability of mental-health providers to offer telemedicine
* Beyond coronavirus: Path to the next normal
* 19 states have postponed state-level or municipal elections

 


MARKET FOCUS


 

Markets: For the holiday-shortened week, the S&P 500 surged 12.1% for its biggest one-week gain since 1974, while the Dow rallied 12% and the Nasdaq jumped 10.6%. The Dow remains down around 17% off its most recent high and the S&P is still down nearly 18%.

 

Wells Fargo analysts nailed it in a research note to clients when they wrote, “Policy Moves Are More Important than the Data.”

 

Saudi Arabia and Russia confirmed an oil production-cut deal, giving President Donald Trump the deal he wanted. Saudi Arabia will cut production by 3.3 million barrels per day, while Russia agreed to cut 2 million barrels per day. Some observers believe the OPEC+ agreement on its own should at least put a “floor” on historically low prices that have damaged the U.S. shale industry. Trump predicted that oil prices have already “hit bottom” and are “probably heading up.”

 

     A virtual summit of Group of 20 energy ministers failed yesterday to devise a detailed plan to help resolve an unprecedented oil glut partly triggered by the pandemic.
 

     Energy Secretary Dan Brouillette, the U.S. representative at Friday's G20 meeting, said during his prepared remarks that the coronavirus’ “devastating impact on world economies” has triggered an “enormous decline in crude oil demand” that will force U.S. oil production to fall this year for the first time since 2016. Brouillette said he expects U.S. oil production to fall nearly 2 million barrels per day by the end of 2020, while “some models show even more dramatic figures, up to 3 million barrels per day." The energy secretary reiterated the Trump administration view that those market-driven numbers count as the U.S. response to cutting oil production — along with its move to take surplus oil off the market by allowing companies to store crude in the SPR — and nothing more formal would be coming.

 


POLICY FOCUS


 

Trump calls decision on reopening U.S. economy the biggest of his life. President Trump on Friday described the decision on when and how to reopen the country as the most difficult one he’s had to make in his life, underscoring the careful line he is walking between concerns about the economy and public health during the coronavirus outbreak. “I don’t know that I’ve had a bigger decision. But I’m going to surround myself with the greatest minds. Not only the greatest minds, but the greatest minds in numerous different businesses, including the business of politics and reason,” Trump told reporters at a White House press briefing. “And we’re going to make a decision, and hopefully it’s going to be the right decision,” he continued. “I will say this. I want to get it open as soon as we can.” The new panel will be named the Opening Our Country Council, to make recommendations. Link to special report we filed on this on Friday.

 

     Efforts in the U.S. appear to be dependent on testing far more Americans than has been possible to date, though planning is still in the early stages. The economy would likely be reopened in phases, beginning in smaller cities and towns in states that haven't yet been heavily hit by the virus.

 

     The first batch of individual payments from the coronavirus stimulus hit bank accounts yesterday, but how quickly laid-off workers receive bigger unemployment checks depends on where they live. Millions of Americans will be left out as the Internal Revenue Service starts distributing $1,200 coronavirus stimulus — link to USA Today article.

        • The payments start to phase out for Americans who earn more than $75,000, or $150,000 for a joint return. The payments phase out completely for single filers with incomes exceeding $99,000, $136,500 for head of household filers with one child and $198,000 for joint filers with no children.
        • Students age 17 or older don’t qualify for a stimulus check if their parents or guardians claim them as a dependent. Their parents won’t get the $500 per child payment either. That applies only to children ages 16 and younger. The result is that many high school juniors and seniors won’t get a check and their parents won’t get the $500 additional stimulus credit.
        • Immigrants qualify for a stimulus check if they meet the eligibility criteria and have a valid Social Security number. Immigrants with green cards or H-1B and H-2A work visas are eligible for a check. Non-resident aliens, temporary workers and immigrants in the country illegally are not.

 

     The U.S. government won’t take a stake in small airlines seeking federal aid as part of a $2.2 trillion economic-stimulus package, the Treasury Department said.

 

     A tax ambiguity that could amount to tens of billions of dollars or more is lurking in the small-business loan forgiveness program. Tax experts say Congress should clarify whether expenses tied to loan forgiveness are deductible. Link to WSJ article for details.

 

What could the coming Covid-19 farmer aid package look like? Link to our special report on some possible breakdowns and questions being raised about the coming package that is expected to be sent by USDA Secretary Sonny Perdue to the White House (OMB and others) the week of April 13.

 

Update on bird flu in South Carolina turkey flock; EU issues a ban on U.S. poultry. As previously reported, an infectious and fatal strain of bird flu has been confirmed in a commercial turkey flock in South Carolina, the first case of the more serious strain of the disease in the U.S. since 2017. The high pathogenic case was found at an operation in Chesterfield County, South Carolina, marking the first case of the more dangerous strain since one found in a Tennessee chicken flock in 2017. In 2015, an estimated 50 million poultry had to be killed at operations mainly in the Upper Midwest after infections spread throughout the region.

 

     A laboratory in Ames, Iowa, confirmed the virus that had been killing turkeys was a high pathogenic H7N3 strain of avian influenza. It was reportedly was discovered on April 6. It has killed 1,583 turkeys and the remainder of the 32,577 birds in the flock were euthanized. State officials quarantined the farm, movement controls were implemented and enhanced surveillance was already in place in the area.

 

     “The flock was quickly depopulated and will not enter the marketplace,” said Joel Brandenberger, president of the National Turkey Federation, an industry trade group. “Thorough disinfecting and cleaning procedures have already been initiated on premises as well as surveillance of commercial flocks in the surrounding area. This occurrence poses no threat to public health. Turkey products remain safe and nutritious.” He said poultry farmers implement strict biosecurity measures year-round and routinely test flocks for avian influenza.

 

     As for trade impacts, the European Union announced that “Poultry meat and poultry meat products from the entire United States produced on or after April 8, 2020 are not eligible to export to or transit via the European Union. Within the United States, poultry slaughtered and processed before April 8, 2020 is eligible.” A U.S. source said, “The EU action makes no sense since in 2015 they did not do that. They regionalized it.” Another U.S. contact said, “This further sets back the chances for a meaningful trade agreement if this is how the EU responds contrary to international standards.”
 

Coronavirus update:

  • Summary: Globally, the number of cases topped 1.7 million, according to Johns Hopkins University data, even as officials voiced cautious optimism that social-distancing measures are slowing the contagion’s spread. More than 2,000 people in the U.S. died of coronavirus on Friday, a new daily high in the nation's fight against Covid-19. The U.S. became the country with the most reported coronavirus deaths, surpassing Italy, with 18,860 deaths. Reported U.S. cases reached 501,615. In Italy, where the number of confirmed new cases has trended down for many days, the death toll stood at 18,849. Japan reported a record 658 new cases, bringing the country’s total to 6,005, roughly double the number a week ago.
     
  • Apple, Google partner on coronavirus contact-tracing technology. Apple and Google are teaming up to build software into smartphones that would alert people recently in contact with someone infected with the coronavirus, an unprecedented collaboration between the makers of the operating systems behind billions of smartphones world-wide. Link to Bloomberg item for details.
     
  • Trump administration is increasing the ability of mental-health providers to offer telemedicine services, and a suicide-prevention program in the Veterans Affairs Department is expanding to other affected Americans.
     
  • Beyond coronavirus: The path to the next normal. The coronavirus is not only a health crisis of immense proportion—it’s also an imminent restructuring of the global economic order. Link to a McKinsey & Company report on how leaders can begin navigating to what will be next.

Other items of note:

  • The following 19 states have postponed state-level or municipal elections (this total includes states that have authorized the postponement of municipal elections on a statewide basis; Source: Ballotpedia):

    • Alabama: Primary runoff postponed to July 14.
    • Delaware: Select school board and municipal elections postponed.
    • Georgia: Primary postponed to June 9; primary runoff postponed to August 11.
    • Indiana: Primary postponed to June 2.
    • Iowa: Three special municipal elections postponed to July 7.
    • Kentucky: Primary postponed to June 23.
    • Maryland: Primary postponed to June 2.
    • Massachusetts: Two special state Senate elections postponed to May 19; two special state House elections postponed to June 2; municipalities authorized to postpone elections originally scheduled to take prior to May 30.
    • Missouri: Municipal elections originally scheduled for April 7 postponed to June 2.
    • New Jersey: Primary postponed to July 7; special municipal elections in the townships of Old Bridge and West Amwell and Atlantic City postponed to May 12; all school board elections scheduled for April 21 postponed to May 12.
    • New York: Special elections in the following districts postponed to June 23: State Senate District 50, State Assembly District 12, State Assembly District 31, State Assembly District 136.
    • Ohio: Absentee voting in the state's primary extended to April 27; final date for in-person voting, restricted to individuals with disabilities and those without home mailing addresses, set for April 28.
    • Oklahoma: Municipalities authorized to postpone elections originally scheduled for April 7 to a later date.
    • Pennsylvania: Primary postponed to June 2.
    • South Carolina: Municipal elections scheduled for March and April postponed to sometime after May 1.
    • South Dakota: Local governments authorized to postpone to June any elections scheduled between April 14 and May 26.
    • Texas: Special election for Texas State Senate District 14 postponed to July 14. Primary runoff postponed to July 14.
    • Virginia: Primary postponed to June 23.
    • West Virginia: Primary postponed to June 9.

 

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