By: Economic & Finance Report
Eureka!!!!!! Finally a resolution for the stimulus package to be garnered to the American people and American struggling small businesses; in the United States. The stimulus package reached by the Republican & Democrat Senate & House leadership; will have a full vote by the US Senate & House of Reps on Monday, December 21, 2020.
The $900 billion price tag leaves out state aid, that governors and mayors across party lines have indicated they desperately need, to revive their local economies. Local officials will have to figure out ways to attribute their fiscal budget without the aid support being provided by the federal government.
The stimulus deal was reached late Sunday night December 20, 2020 by both Republicans and Democrats. It had been in negotiations for months, as Democrats and Republicans had been jostling for superiority on what should be included for the second wave of stimulus checks to the American people and American small businesses. The package aid was desperately needed because of the collapse of the economy, caused by the coronavirus pandemic. -SB
Image Credit: Forbes.com
1) Database-software giant Oracle is moving its headquarters out of California (Silicon Valley) to Austin Texas making Oracle the latest tech giant to flee California. The software company had been based in Silicon Valley since it was founded in 1977. High technology industries have a long history in Austin, with IBM, Dell Technologies, and Samsung setting up shop in the city. Depending on their job, many of Oracle employees can choose their office location, as well as continue working from home part- time or full time. This is yet another account of technology talent packing up and leaving the famous tech capital of Silicon Valley for Texas, with Austin, in particular, being a popular destination for relocation. Other tech companies like Hewlett Packard Enterprise, are moving to other cities in Texas, who is relocating their headquarters from San Jose, California to Houston.
2) The Senate has unanimously passed a stopgap funding measure Friday, to avoid a government shutdown for one week, while lawmakers work to close a deal on government funding. Friday evening President Trump then signed the spending bill into law, which keeps the government open at current funding levels. The longest government shut down was for 35 days in 2018, which was the longest-ever shutdown in modern U.S. history. The nonpartisan CBO (Congressional Budget Office) estimates tax revenue is down $2 billion in 2019 because the IRS had halted some operations during the 2018 shutdown.
3) The $908 billion dollar coronavirus relief proposal is going to be split into two packages by lawmakers. The plan will have a $160 billion dollar part that ties together the two most controversial elements, which is more money for state and local governments and protections against coronavirus-related lawsuits. The second part is $748 billion dollars including another round of Paycheck Protection Program funding for small businesses, unemployment benefits, and more money for vaccine distribution, testing and schools. Splitting off the two most controversial items makes it easier to at least pass a smaller coronavirus agreement as part of a government funding deal. Congress is quickly running out of time to cut a big deal on coronavirus relief, the bipartisan group having been negotiating for weeks, to try to finalize its bill after announcing a framework earlier this month.
4) Stock market closings for – 11 DEC 20:
Dow 30,046.37 up by 47.11
Nasdaq 12,377.87 down by 27.94
S&P 500 3,663.46 down by 4.64
10 Year Yield: down at 0.89%
Oil: down at $46.56
1) Denmark has announced it will stop offering new oil and gas licenses in the North Sea and will phase out oil production all together in 2050 as part of the country’s goal to become fossil free. The Social Democrat government reached a deal with a majority in parliament to drop Denmark’s 8th licensing round plus any future exploration plans. Conditions for the oil and gas companies currently operating in Danish waters will remain unchanged until production stops in 2050. The decision will cost the country about $2.1 billion dollars a year. Production for 2020 is 83,000 barrels of oil plus natural gas equivalent of 21,000 barrels. With Denmark being the European Union’s largest oil producer, this decision will resonate around the world.
2) Reports are that a $908 billion dollar stimulus plan has gained the support of top congressional Democrats and several senior senate Republicans, that combines many of the central priorities of congressional leaders of each party, as well as those of President-elect Joe Biden. There is funding for health officials to help with the distribution of the coronavirus vaccine, as well as aid for hospitals, the hungry, and the U.S. Postal Service. The most expensive item in the bipartisan plan is $288 billion in assistance for U.S. businesses, with lawmakers insisting that funding is geared primarily toward assisting small firms, including continuation of the Paycheck Protection Plan. There is also a range of funding for smaller measures aimed at meeting other critical needs facing the country such as schools and education funding, transportation systems, agriculture, housing and rental assistance, the vaccine program, and the U.S. Postal Service.
3) Employment picture is darkening, with the U.S. economy adding in November the fewest workers in six months, hindered by a resurgence in new COVID-19 cases that, together with a lack of more government relief money, threatens the recovery from the pandemic recession. The Labor Department reported the addition of 245,000 jobs in November, much less than the 440,000 expected, and far less than the 610,000 in October. The unemployment rate slipped from 6.9% down to 6.7%, but that was because fewer people were looking for work. With bipartisan consensus, there is hope of the $908 billion dollar aid package passing before Congress breaks for the holidays.
4) Stock market closings for – 4 DEC 20:
Dow 30,218.26 up by 248.74
Nasdaq 12,464.23 up by 87.05
S&P 500 3,699.12 up by 32.40
10 Year Yield: up at 0.97%
Oil: up at $46.09
1) Exxon has announced that it will dramatically mark down the value of its natural gas properties, a result of the slow oil price recovery. The plan is to take a non-cash charge of $17 to $20 billion dollars, which is a massive hit for a company who has long opposed to taking writedowns. Exxon erred when it acquired XTO Energy, a natural gas giant, for $41 billion dollars in late 2009. Now, about half of that purchasing value has now been erased. The natural gas market is depressed with the price of gas now less than half of what it was when Exxon purchased XTO Energy. Other oil companies such as Chevron, BP and Shell have also taken massive write downs. This write down also means that Exxon will limit its near term capital spending in gas
2) Failed talks have exposed a dangerous fissure at OPEC’s core, which its partners are quietly working to repair. Diplomatic efforts center around Saudi Arabia and the United Arab Emirates on how much crude oil to pump in the coming new year. OPEC rescued the oil market this year, after an unprecedented slump in oil prices, by slashing production to compensate for the demand decline because of the pandemic. But with oil prices down for so long, many OPEC member countries life blood revenues are down which impairs operations of those governments. This puts a lot of pressure on individual countries to break away and pump without any restrictions or quotas to get the monies they need. Privately, some OPEC members are talking about even leaving the cartel and going their own way with oil.
3) During the Thanksgiving holiday week, fewer Americans applied for unemployment benefits, thereby reversing an uptick in jobless claims over the previous two weeks. But still unemployment claims remain historically high, indicating many companies are continuing to lay off workers, despite the economy recovering from the impact of the coronavirus. Some 712,000 people applied for unemployment benefits, a drop of 75,000 from the week before. Another 288,000 applied for Pandemic Unemployment Assistance, a special program for self-employed and gig workers, as well as others who don’t qualify for regular state unemployment. In addition, millions are struggling to find work during the pandemic. All told, about 20 million people are now receiving some type of jobless aid, with 12 million set to lose their benefits the day after Christmas unless Congress agrees to extend funding.
4) Stock market closings for – 3 DEC 20:
Dow 29,969.52 up by 85.73
Nasdaq 12,377.18 up by 27.82
S&P 500 3,666.72 down by 2.29
10 Year Yield: down at 0.92%
Oil: up at $45.64
By: Economic & Finance Report
Jack Ma’s Ant Group IPO was supposed to be going public on the Shanghai Stock Exchange recently, but has been halted by the Chinese government for disagreements between the Chinese government and Jack Ma (AliBaba/Ant Group’s co founder).
The IPO was listed to raise over $37 billion dollars USD, making it the biggest share sale in the history of the global stock markets. Saudi Arabia’s Aramco holds the biggest share offering title; currently with its share offering last December 2019, raking 29.4 billion dollars USD. The spectators will have to wait and see, if or when the IPO will go public -SB
Image Credit: MoneyControl.com