Lawmakers will vote on the stimulus package, mutant strain Covid isolates the UK and is a day of risk in the markets.
Today!
The House and Senate will vote today approximately $ 900 billion pandemic assistance package and the White House said President Donald Trump would sign it. The agreement includes help for small businesses, the unemployed and direct payments to most Americans. The bill to be voted on by lawmakers will be attached to $ 1.4 trillion measure to fund government operations by the end of the year. As part of the commitment needed to reach an agreement, Democrats were allowed to insert a provision that yes prohibits the Federal Reserve from restarting a program that supports corporate bonds and small businesses that expires Dec. 31.
Isolation
The UK has been plunged into chaos after the government revealed that a new strain of coronavirus is “authorities effectively shut down the south-east of the country, including London, restricting travel inside and outside the region. Most European countries have banned flights and ships to Britain. Given the bans on freight travel, there is a risk of delays essential food supplies in the days before Christmas. A WHO official said it could take more than a week to find out how the new strain works responds to vaccines.
And this…
If being sidelined from the rest of the world was not a headache enough for British Prime Minister Boris Johnson, he also faces ongoing Brexit negotiations crawl without any agreement. There are only days left for the UK to leave the single market of the European Union, talks remain stalled on the issue of fishing rights. The European Parliament, which has a veto on the whole agreement, warned that it will not be able to ratify any agreement in time for the end of the transition period on 31 December. The bad weekend in the UK can be seen more clearly in the foreign exchange markets where the pound has fallen more than 2.2% against the dollar.
Risk
Investors are looking for security as concerns about the Covid mutant strain in the UK and more travel restrictions increase. Overnight, the MSCI Asia Pacific index fell 0.7% and Japan’s Topix index closed 0.2% lower. In Europe, the Stoxx 600 index had fallen 3.3% at 5:50 a.m. Eastern Time, with all sectors of the industry firmly in the red. The futures of the S&P 500 were it fell more than 2.5% and the 10-year Treasury yield stood at 0.888%. Oils also fell and fell gold.
Going up…
The Chicago Fed’s national activity index for November is at 8:30 p.m. Shares of Tesla Inc. they are starting to trade on the S&P 500 index, and the first signs are a difficult start with corporate stocks. 6% lower in premarket trade. Being Christmas week, Wednesday is very busy getting economic data with claims for unemployment, durable goods orders and personal income, posted then.
What we have been reading
This is what caught our attention over the weekend.
And finally, that’s what Sid is interested in this morning
The world is rushing to close connections with the UK, including travel by plane, ferry and rail. The British are once again concerned about the threat of food shortages. Overseas logistics companies cancel business plans at the risk of inventories and equipment being trapped on the island.
Welcome home to a new coronavirus mutation that puts an end to the free movement of people, goods and services, with or without a tough Brexit. All this means that the fact that negotiators have just passed another deadline to formalize a new European trade agreement has a diminished real-world importance at the moment. However, it is worth noting that the European Parliament now has no time to ratify any agreement before the end of the transition period this year. And the bloc’s 27 national governments will still have to have their say in any 11-hour deal that seems less likely.
One opinion will naturally state that the UK has an additional incentive to take a more accommodating stance, given its already broken supply chains and intensified economic problems. Even before news of this new strain of virus was reported, households were increasing their savings rapidly.
But equally, with Britain so shady, the economy on the ground, supply chains already baffled and Brexit expectations so low, a tough exit from the European trade bloc may not seem like a material blow: it will increase the incentive to go there alone.
Follow Sid Verma of Bloomberg on Twitter at @_SidVerma
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