Happy Thursday and welcome back to On The Money, where we’re hoping to see a lot more dog pictures online if many of you are going to be working from home this much. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL– Stocks suffer worst losses since 1987 crash amid coronavirus panic: Stocks cratered Thursday as the escalating coronavirus pandemic and lingering questions about President Trump’s response drove the worst day of losses for Wall Street since the 1987 crash.
The Dow Jones Industrial Average closed with a loss of 2,352 points, dropping 10 percent for its steepest loss by percentage since falling 22.6 percent on Oct. 19, 1987–known as “Black Monday.”
The Dow’s Thursday losses also exceeded its 7.87-percent plunge on Oct. 15, 2008, the day the House voted down the financial sector bailout bill, which was the index’s most recent record for the steepest single-day drop by percentage.
The S&P 500 fell 9.5 percent to join the Dow in bear market territory — a 20 percent decline from a stock or index’s 52-week peak. The Nasdaq composite also dropped 9.4 percent, bear market territory.
- Thursday’s record-breaking losses come amid increasing panic over the humanitarian and economic toll of the COVID-19 coronavirus outbreak.
- Public health and government officials are urging Americans to adopt social distancing practices to avoid a sharp increase in confirmed U.S. coronavirus cases, which exceeded 1,000 on Wednesday and has claimed more than 30 lives in the U.S.
- The market rebounded slightly after the Federal Reserve announced it would offer $1.5 trillion in short-term loans meant to stabilize financial markets, but sunk again as lawmakers struggled to strike a deal on an economic rescue plan.
I’ve got more on the brutal day for the financial system here.
What drove the losses:
- The steep drop came after a series of events highlighted the degree to which U.S. life and spending will slow down because of the coronavirus. The NBA and NHL suspended their seasons, the NCAA cancelled its popular basketball tournaments and several states and municipalities said no events with more than 1,000 people should go forward.
- Stocks futures also plummeted after President Trump’s remarks from the Oval Office on Wednesday night, in which he also announced travel restrictions on European travel to the U.S., and extended those losses into Thursday morning.
Wall Street clamors for stimulus: Stocks tanked throughout Thursday as Trump and lawmakers negotiated over a bill to boost the government’s virus mitigation efforts and shore up economic protections for the most vulnerable Americans.
“Nothing happened overnight to soothe investors. In fact, you could argue things seem even more grim this morning,” wrote JJ Kinahan, chief market strategist at TD Ameritrade, in a Friday research note. “The travel ban and so many big events closing or being limited in scope seem to have ratcheted up worries about a recession.”
- The Democratic-led House was set to vote on a bill Thursday evening with the hopes of forcing the Senate into action before a previously scheduled congressional recess.
- The Democratic bill included provisions to ensure paid sick leave for all workers, expand unemployment insurance, guarantee free coronavirus testing and expand federal food assistance for low-income families and children.
- Senate Majority Leader Mitch McConnell (R-Ky.) dashed hopes of easy passage Thursday, denouncing the Democratic offering as an “ideological wish list” and canceling the Senate’s planned break, pushing the House to do the same.
LEADING THE DAY
Pelosi: Democrats open to tweaking virus bill, but won’t wait long for GOP backing:
Speaker Nancy Pelosi (D-Calif.) said Thursday that Democrats are open to amending their legislation to stimulate the economy amid the coronavirus turmoil, but warned that she won’t wait for Republicans to get on board.
“I don’t want to stick around because they don’t want to agree to language,” Pelosi told reporters in the Capitol.
“Everybody could have a complaint about this or that,” she added. “Save it for another day.”
The remarks both highlight the significant leverage the majority House Democrats have in the coronavirus debate and signal that Pelosi is not backing down from her initial plan to pass a relief bill through the House and then recess the lower chamber, putting enormous pressure on the Senate to act.
The Hill’s Mike Lillis fills us in here.
- Pelosi has been negotiating the second round of coronavirus relief with Treasury Secretary Steven Mnuchin for much of the week in search of a bipartisan deal that can move through the Republican-controlled Senate.
- The pair spoke again by phone Thursday morning, with Mnuchin suggesting amendments to the Democrats’ proposal. As a sign that an agreement is in reach, Pelosi characterized those changes as “all very reasonable.”
- But GOP leaders on Capitol Hill are balking at the Democrats’ bill, largely over provisions to expand paid leave for workers affected by the coronavirus — a benefit long-opposed by business-friendly Republicans in Congress.
Trump weighing potential emergency declaration for coronavirus: While lawmakers squabble over a deal, President Trump is weighing whether to declare a national emergency over the coronavirus, which would free up additional resources to combat the rapidly spreading disease.
The president indicated to reporters that using an emergency declaration under the Stafford Act was under consideration, but would not say definitively whether he would sign it on Thursday.
Asked if he planned to declare a national emergency on Thursday, Trump deflected.
- Trump can declare a national emergency or a major disaster declaration under the Stafford Act, which would enable the Federal Emergency Management Agency (FEMA) to mobilize additional resources and funding to fight the coronavirus.
- The president also said Wednesday he would use executive orders to offer financial relief to individuals and small businesses impacted by the fallout over the disease.
The Hill’s Brett Samuels explains here.
GOOD TO KNOW
- The number of American claims for jobless benefits has dropped by 4,000 for a second week in a row, showing that the effects of the coronavirus may not have yet reached the labor market.
- Even so, consumer confidence has plummeted alongside increasing fears about the spread of the coronavirus, according to new figures released Thursday.
- Republicans on the House Financial Services Committee introduced eight bills Thursday intended to finance economic relief during the coronavirus slowdown.