Top News  Shutterstock Congress is set to give the final green light to President Biden's $1.9T economic stimulus plan today, clearing the way for one of the largest relief packages in U.S. history. It's being hailed as a centerpiece of Biden's first 100 days, and includes $1,400 payments for most Americans, expanded unemployment insurance, funding for schools and public health, and state and local government aid. The legislation also includes a per-child cash payment of at least $3,000 for one year, an expansion of "Obamacare" subsidies for two years, as well as aid for restaurants, agriculture and small businesses.
Thought bubble: The consensus among economists is that the stimulus will boost the economy and supercharge the recovery. A forecast from Moody's says the plan can add up to 7M American jobs - which is important given the levels of unemployment - while the OECD said Tuesday that the program highly enhances the economic outlook even outside the U.S. But there are also those that have raised concerns that the sheer scale of the spending could lead to a spike in inflation, as well as deficit hawks who have expressed worries about additional borrowing and what that might mean for the national debt.
That conversation is also playing out in the political sphere, where Democrats have dubbed it the "largest anti-poverty measure in a generation" or what White House Press Secretary Jen Psaki called the "most progressive piece of legislation in history." On the other side of the fence, GOP members have said the package goes too far in its expansion of public assistance, pointing to the only $75B (7% of the $1.9T price tag) which is directed at COVID testing, contact tracing and vaccine distribution.
Statistics: A Pew Research Center poll released yesterday found that 70% of U.S. adults favor the $1.9T coronavirus relief bill, including 41% of Republicans and Republican-leaning independents and 94% of Democrats and Democratic leaners. In assessing the proposed spending in the aid package, 41% of Americans view it as about right, while another 25% say it spends too little, and only a third of Americans say the legislation spends too much money.    | | Top News Shutterstock Congress is set to give the final green light to President Biden's $1.9T economic stimulus plan today, clearing the way for one of the largest relief packages in U.S. history. It's being hailed as a centerpiece of Biden's first 100 days, and includes $1,400 payments for most Americans, expanded unemployment insurance, funding for schools and public health, and state and local government aid. The legislation also includes a per-child cash payment of at least $3,000 for one year, an expansion of "Obamacare" subsidies for two years, as well as aid for restaurants, agriculture and small businesses.
Thought bubble: The consensus among economists is that the stimulus will boost the economy and supercharge the recovery. A forecast from Moody's says the plan can add up to 7M American jobs - which is important given the levels of unemployment - while the OECD said Tuesday that the program highly enhances the economic outlook even outside the U.S. But there are also those that have raised concerns that the sheer scale of the spending could lead to a spike in inflation, as well as deficit hawks who have expressed worries about additional borrowing and what that might mean for the national debt.
That conversation is also playing out in the political sphere, where Democrats have dubbed it the "largest anti-poverty measure in a generation" or what White House Press Secretary Jen Psaki called the "most progressive piece of legislation in history." On the other side of the fence, GOP members have said the package goes too far in its expansion of public assistance, pointing to the only $75B (7% of the $1.9T price tag) which is directed at COVID testing, contact tracing and vaccine distribution.
Statistics: A Pew Research Center poll released yesterday found that 70% of U.S. adults favor the $1.9T coronavirus relief bill, including 41% of Republicans and Republican-leaning independents and 94% of Democrats and Democratic leaners. In assessing the proposed spending in the aid package, 41% of Americans view it as about right, while another 25% say it spends too little, and only a third of Americans say the legislation spends too much money. | |
| Stocks Back in January, we reported on the usages of stimulus checks, which have provided a financial lifeline to millions of Americans, though for others, they represented an opportunity to boost their savings. That was thanks to the $2.3T CARES Act enacted in March 2020 and the $908B stimulus bill passed in December, which provided $1200 and $600 to all Americans making under $75,000 - regardless of their employment and financial situation.
Backdrop: Securities trading was among the most common uses - across nearly every income bracket - for the checks issued in April, according to software and data aggregation company Envestnet Yodlee. For many consumers, trading was the second or third most common use for the funds, behind only increasing savings and cash withdrawals. In fact, Americans that earned between $35,000 and $75,000 annually traded stocks about 90% more than the week prior to receiving their stimulus check.
Things aren't likely to change this time around. "I do think that you will find a lot of that stimulus money will end up in the market, and I think if anything it's a bullish catalyst," said Randy Frederick, vice president of trading and derivatives for Charles Schwab. A Deutsche Bank survey of 430 retail investors last month also found that on average they plan to put 37% of any stimulus checks directly into equities.
Go deeper: Goldman Sachs even recently raised its 2021 net equity demand estimate from households from $100B to $350B, reflecting "faster economic growth and higher interest rates than we had assumed previously, additional stimulus payments to individuals, and increased retail activity in early 2021." "We expect households will be the largest source of equity demand this year," wrote strategists from the firm. JJ Kinahan, chief market strategist at TD Ameritrade, has a similar forecast. "You have really started to see an interest from the individual investor in a way that we have never seen before," he added. | |
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