Daily Market Color March 19, 2020Senate Passes a $1T Fiscal Stimulus Package Risk assets fall despite second wave of Congressional spending. The Senate voted 90-8 to pass a second bill costing up to $1T to provide relief for those affected by the coronavirus and to increase the supply of available tests. The House is in recess this week, but it is expected that President Trump will sign the bill into law early next week. Congress is already discussing a third stimulus package that could total up to $1.3T including $500 billion in direct payments to Americans and up to $50 billion in credit support for airlines. The S&P 500 fell 5.2% on the day yesterday while the 10-year Treasury yield rose 11 basis points to 1.19%. Fed and ECB announce new monetary measures to curb virus impact. The Fed announced a slate of new measures to support short term funding markets. The Fed stated that the Money Market Mutual Fund Liquidity Facility would aid “in meeting demands for redemptions by households and other investors, enhancing overall market functioning and credit provision to the broader economy.” The ECB in turn announced they would purchase up to €750 billion worth of bonds to help alleviate liquidity issues. This latest package brings total quantitative easing from the ECB up to €1.3T this year- ECB President Christine Lagarde adding that “there are no limits to our commitment to the euro.” Day ahead. With economists expecting large layoffs due to the coronavirus, US jobless claims figures were at 281,000, 70,000 higher than last week’s 211,000. The Philadelphia Fed’s manufacturing survey for March fell to -12.7 from last month’s 36.7. The White House will hold their daily coronavirus briefing at 11 EST.
