Mar 22 , 2020
Coronavirus cases in the U.S. surged above 33,000 on Sunday, as Covid-19 infections topped 337,000 worldwide. The U.S. is accounting for more new virus cases than any other country, with New York infections soaring. Congress hit a major roadblock on a $2 trillion coronavirus stimulus package amid Democratic objections, while a top Federal Reserve official said the U.S. economy could contract 50% in the second quarter.
More states are enacting stay-at-home orders. Meanwhile, Sen. Rand Paul, R-Tenn., has tested positive for the coronavirus. Two more senators self-quarantined, making a total of five Republicans unavailable for any stimulus vote.
U.S. Coronavirus Cases Top 33,000
U.S. coronavirus cases jumped 9,339 Sunday to 33,546. The U.S. is behind only China and Italy in terms of total confirmed coronavirus cases. U.S. coronavirus deaths have climbed to 419.
The U.S. is now adding more new cases than any other country.
New York state has nearly 16,000 Covid-19 cases, up more than 5,400 so far today. Nearly 11,000 cases are in New York City itself.
New York officials have been among the most vocal in warning of shortages of key medical equipment and protective gear, calling on federal aid and supplies. FEMA Director Peter Gaynor said the federal government is prioritizing supplies to hard-hit states such as New York, Washington and California.
"I think that the scenes out of New York are going to be shocking, former FDA Commissioner Scott Gottlieb said on CBS' "Face The Nation" on Sunday. "I think that the hospitals in the next two weeks are going to be at the brink of being overwhelmed."
Much of the rise in confirmed coronavirus cases in the U.S. stems from a rapid increase in Covid-19 testing.
Testing will continue to ramp up in the next several weeks, with private labs and tests rushing in. LabCorp (LH) is now able to do more than 20,000 Covid-19 tests per day. The FDA on Saturday gave emergency approval to a Cepheid Covid-19 test that produces results in 45 minutes. The test can run on over 23,000 Cepheid GeneXpert machines, including nearly 5,000 in the U.S. Cepheid is a unit of Danaher (DHR).
One bright spot: Washington state, which had the first clear outbreak in Seattle, appears to have be leveling off in terms of daily new cases even as testing has increased substantially.
Sen. Rand Paul Tests Positive
Sen. Rand Paul has tested positive for the coronavirus, according to Paul's Twitter account. Paul is the first senator, and third member of Congress, to contract Covid-19. He is not showing any symptoms but was tested due to his travel and events. He is now under quarantine. Utah GOP Sens. Mike Lee and Mitt Romney are self-quarantining after they recently had lunch with Paul. Vice President Mike Pence and his wife tested negative Saturday. One of his staffers had tested positive, the first known coronavirus case in the White House.
More States Order 'Stay-At-Home' To Slow Covid-19 Spread
A California "stay-at-home" order when into effect on Friday, telling the state's 40 million residents to stay at home unless going to grocery stores, pharmacies, health care or other "essential" needs or work. All people must work at home unless they provide "essential" services such as health care or emergency responders.
Illinois and New Jersey followed suit Saturday night. New York's order effective Sunday night, with Gov. Cuomo saying he may close parks if social distancing isn't being followed. Ohio and Louisiana on Sunday announced "stay-at-home" order that kick in Monday evening. Connecticut's order begins Monday night with Oregon working on a similar measure.
All told more than 100 million Americans are under or coming under "stay-at-home" orders.
More states are likely to follow. St. Louis will begin a stay-at-home order Monday night. Some states have closed "nonessential" businesses or at least bars and dine-in restaurants.
At least 45 states have closed all of their schools.
New York City airports briefly shut down on Saturday, as the coronavirus crisis is causing staffing issues at air-traffic control sites around the country.
Coronavirus Economic Impact
Along with the "stay-at-home" measures, businesses are scaling back or halting operations while ordinary Americans curtail normal activities.
General Motors (GM), Ford (F) and other automakers have shut down North America plants, with Tesla (TSLA) closing its Fremont plant this Monday. Many retailers have closed all their stores and several fast-food chains have shifted to takeout or drive-thru only, even where they are not required to. Airlines have slashed capacity by half, or more, as travel evaporates.
All of these actions should help "flatten the curve," limiting the spread of coronavirus cases, easing the burden on hospitals and giving more time to ramp up testing, churn out needed medical gear such as ventilators and masks, and to develop treatments and vaccines.
But the economic impact is severe. Initial jobless claims for this past week likely exploded to two million or more, which would be triple the all-time record.
St. Louis Fed President James Bullard told Bloomberg News that second-quarter GDP could crash 50% quarter-on-quarter, with unemployment exploding to 30%. In the Great Depression, unemployment peaked at 25%.
Morgan Stanley predicts a 2.4% annualized decline in Q1, followed by a 30% plunge in Q2.
Amid all the gloom, Walmart (WMT) and Amazon (AMZN) are going on hiring sprees. Walmart is hiring 150,000 while Amazon is adding 100,000 as both face increased demand amid coronavirus pandemic shopping.
Coronavirus Stimulus Deal In Trouble
The coronavirus stimulus package could approach $2 trillion. Senate provisions, still in flux, would provide aid would include direct checks to many Americans, expanded jobless benefits, loans to small businesses aid to states and hospitals. It would also give Treasury Secretary Steven Mnuchin $500 billion in discretionary funds to aid businesses.
Senate Democrats defeated a procedural vote to advance coronavirus rescue legislation, in part on the $500 billion in discretionary funds. The vote wasn't on the stimulus package istelf, which is still unfinished. But it would have made it easier to approve a final deal Monday.
House Speaker Nancy Pelosi, D-Calif., who opposes the current Senate stimulus framework, said the House plans to introduce its own legislation.
Monday night, Mnuchin continued negotiations between Senate Majority Leader Mitch McConnell, R-Ky. and Senate Minority Leader Chuck Schumer, D-N.Y.
McConnell said that if there's no deal, he hold the procedural vote again, at 9:45 a.m. ET, with stock markets open for trading.
Meanwhile, with Sen. Paul testing positive and Lee and Romney joining two other GOP senators already in self-quarantine, McConnell has 49 Republican senators available to vote on an eventual coronavirus stimulus package. The Senate currently does not allow for remote voting, though there is a push to change the rules.
On Sunday morning, Mnuchin said that, combined with the Federal Reserve, the government would have up to $4 trillion to support the economy.
Over the past week, the Fed and central banks around the world have been stepping up extraordinary monetary stimulus. The Fed has ramped up its buys of Treasuries and mortgage-backed securities and is likely to absorb much of the massive Treasury debt issuance in the coming months.
The Fed is providing support for money markets and will extend its remit to municipal bonds. The coronavirus rescue package could expand the Fed's power to buy corporate debt.
Coronavirus Stock Market Crash
With the economy in an unprecedented meltdown, the current coronavirus stock market crash is understandable. The Dow Jones Industrial Average plunged 17.3% last week to its lowest level since November 2016, a few weeks after President Donald Trump was elected. The S&P 500 index skidded 15% while the Nasdaq composite retreated 12.6%. All of those are on top of huge losses in the past month.
President Trump and McConnell had hoped to have at least a tentative stimulus deal before the stock market opens Monday. Dow Jones, S&P 500 and Nasdaq futures fell 5% or more, hitting limit down just moments after trading began at 6 p.m. ET. Futures resumed trading as they pared losses, but were down sharply.
In 2008, House Republicans voted down the TARP rescue package, triggering another big stock sell-off before the plan finally passed.
The New York Stock Exchange trading floor will be closed as of Monday. Most stock trading is now electronic.
Dow Jones Stocks Under Pressure
Dow Jones aerospace giant Boeing was already reeling from the 737 Max grounding for the past year. Now airlines may have no need for any new jets for the foreseeable future. Boeing stock crashed 44% just last week to its lowest level in nearly seven years.
Boeing suspended its dividend and buybacks late Friday, aiming to preserve cash and win over lawmakers reluctant to bail out the company.