Will another economic-relief bill suffice?

Will another economic-relief bill suffice?

After a few days of intense negotiations, the Democrats and the Republicans agreed upon another aid package.

Yesterday, the US Senate approved an aid package worth approximately $484 billion meant to help small businesses and the medical field, especially COVID-19 testing. The new stimulus package comes as a response to Trump’s request for the small-business-payroll program, in addition to the $2.3 trillion economic relief bill passed last month.

The most significant part of the bill consists of $310 billion for small business loans and the Paycheck Protection Program, which will supply the hit-hard small businesses with momentary cash flow.

Chuck Schumer, the Senate Minority Leader, stated for CNN that $125 billion are meant "exclusively to the unbanked, to the minorities, to the rural areas, and to all of those little mom-and-pop stores that don't have a good banking connection and need the help."

For COVID-19 testing, medical institutions will receive $25 billion. Health-care providers will get $75 billion. At the moment, the US tests 150,000 people per day, reaching a total of 4 million.

According to a tweet of President Trump, helping the rural hospitals is part of the aid package: "We are looking to help them and beyond. So we are looking at hospitals also as part of the package."

Analysts believe that even this is not enough, and they expect a new package, CARES 2, worth $1 trillion.

A new round of negotiations will take place regarding a fiscal relief for state and local governments, and tax incentives for individuals and businesses. The House will give the final vote on Thursday.

US indices didn’t have a very good week until now, mostly because the Oil futures price turned negative for the first time in history, but equities have shown a strong inelasticity to market news recently. The indices are positive pre-market, with USA30 up by 1.3%, while USA500 and TECH100 earning 1.4% each.

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Sources: businessinsider.com, marketwatch.com, investing.com

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Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

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