Plus, the Senate passed its $2 trillion coronavirus stimulus package, deaths from COVID-19 surpassed 1,000 in the U.S., and Wendy’s withdrew guidance for the year.
Stocks rose higher to start Thursday with the Dow climbing 700 points, or around 3%. The S&P 500 added 3.3%, while the Nasdaq gained 2.9%.
The Senate passed the historic $2 trillion coronavirus stimulus package last night in a unanimous 96-0 vote after days of heated negotiations. The bill now heads to the House, where it is expected to pass on Friday before heading for signature from President Trump. The bill includes an unprecedented injection of one-time direct payments to Americans, expanded unemployment benefits, loans and grants to businesses, and aid for hospitals, states, and municipalities as they battle the pandemic. The bill also requires insurance providers to cover preventative services for COVID-19. The bill, however, may not be enough to prevent a massive short-term hit to the economy, and economists and lawmakers are already saying more stimulus will be required with Congress already beginning to discuss the next round. “I’ve never seen Congress move so fast to do something so large,” said Jason Furman, a member of former President Barack Obama’s economic team during the 2008 Great Recession. “Unfortunately, the problem may be larger and faster.”
And larger and faster was indeed apparent with this morning’s jobless claims numbers. The Labor Department said today that the number of Americans who filed for unemployment claims last week surged to 3.28 million, more than ten times last week’s figure of 282,000, and far higher than peak unemployment during the Great Recession of 665,000. Consensus estimates from economists showed an expectation for 1.5 million new claims. “This shows the severity of the downturn, and the speed of it,” said Michelle Meyer, head of U.S. economics at Bank of America. “It speaks to the unusual nature of this recession — it is an abrupt plunge into recession versus prior downturns, where the shock has time to multiply. We could have very high numbers continue for the next few weeks.” Despite the bad news, stocks rallied. “This week’s jobless claims surge was well advertised before the print,” said Art Hogan, chief market strategist at National Securities. “People were talking about the potential of this to be as high as 6 or 7 million. The focus by the market now is on the fact we’re likely to get a historically large fiscal stimulus bill signed in the House by Friday. This is just the beginning of a tsunami of negative news… Everything on the economic data front is going to start looking horrendous.”
The death toll from COVID-19 surpassed 1,000 in the U.S. overnight, the sixth-highest total in the world, as confirmed cases rose to more than 69,000. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said at a White House press briefing yesterday, “Would this possibly become a seasonal cyclic thing? I’ve always indicated to you that I think it very well might.” Fauci added that the U.S. will likely see at least a second outbreak, “What we’re starting to see in the Southern Hemisphere of Southern Africa and the Southern Hemisphere countries, is that we’re having cases that are appearing as they go into their winter season. If they have a substantial outbreak, it will be inevitable that we need to be prepared that we’ll get a cycle a second time.”
Globally, cases rose to more than 492,000, while the global death toll rose to at least 22,000. In Canada, the number of cases rose 72% in a day to at least 3,385, while cases in Switzerland rose to 10,714 and confirmed cases in Spain rose by 8,578 to more than 56,188. Spain’s death toll has risen to 4,089, surpassing China’s, where the official number of fatalities from the virus stands at 3,291, but second to Italy where there are more than 7,000 deaths. Iran has imposed an intercity travel ban, and President Hassan Rouhani warned of a second surge of the coronavirus as cases rose following the Persian new year, while the Iraqi government has extended a countrywide lockdown through April 11.
And Wendy’s became the latest company to withdraw its 2020 forecast this morning, and also withdrew its long-term outlook for 2021 through 2024. The fast food giant said that same-store sales plunged 20% last week, while drive-thru orders made up around 90% of sales. Wendy’s also said it was planning on working to support its franchisees, and will be extending payments for royalties and marketing funds by 45 days for the next three months, and franchisees who rent property from the company will have their base rent payments deferred by 50% over the same period. Wendy’s has fully drawn down its revolving financing facility of about $120 million and has suspended its buyback program. The fast food chain has temporarily shuttered 46 U.S. locations and 189 international locations.
Stocks We’re Watching
Predictive Technology Group Inc (OTC: PRED): Predictive Technology Group shares jumped as much as 94% yesterday after the nano-cap announced that had notified the FDA of its intent to immediately distribute the validated Assurance AB COVID-19 IgM/IgG Rapid Antibody Test to laboratories and healthcare workers in the U.S. “Our company is committed to help with the global challenge of testing for the COVID-19 virus,” said Bradley Robinson, CEO of Predictive Technology Group. “Testing strategies for the pandemic are fluid and changing daily. We have worked diligently with our partners who have experience in testing tens of millions of patients worldwide. We appreciate their assistance in allocating resources and transferring vital knowledge for identifying individuals that have had an immune reaction and developed antibodies in response to virus exposure. Domestic and international governmental agencies, healthcare groups, pharmacies and employers have shown a strong interest in our test.”
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