Happy Monday and welcome back to On The Money, where we strongly advise you not look at your 401(k) tonight. 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–Dow Jones drops 1,031 points on coronavirus fears: U.S. stock markets tanked Monday amid fears that the coronavirus will continue to spread beyond China’s borders.
- The Dow Jones Industrial Average plunged 1,031 points, or 3.6 percent, among its largest one-day drops in terms of points, and its worst day since February 2018.
- The drop wiped out all of the market’s 2020 gains, which just last week had reached new summits.
- The decline followed reports that countries beyond China are struggling to contain the spread of the coronavirus. South Korea raised its alert level to the highest level as infections topped 830, while Italian officials worked to contain an outbreak of 220 cases and Iranian officials confirmed 61 cases.
- The vast majority of the 78,000 cases of the virus are in China, where more than 2,400 people have died from the illness.
The Hill’s Niv Elis explains what happened here.
The economic fallout: Steps to contain the virus have disrupted air travel and some businesses dependent on Chinese factories and other plants in the region, including supply chains for electronics, furniture and automobiles.
Some economists have predicted the virus will weaken growth in the near term, but also expect markets and the global economy to bounce back when the spread of the virus is under control.
Trump seeks to stop the bleeding: President Trump asserted Monday that the coronavirus is “very much under control” in the United States, even as stock markets plunged amid concerns about the spread of the virus.
“The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries,” Trump, who is traveling on official business in India, tweeted. “CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!”
- Trump has sought to project confidence in the steps his administration has taken to contain and mitigate the outbreak as cases are reported in the U.S. and at times has seemed to downplay the threat.
- The White House is expected to ask Congress for emergency funding to combat the virus, which is believed to have originated in the Chinese city of Wuhan, though it’s unclear how much Trump will request.
It’s also good to keep in mind that Trump reacts strongly to sharp movements in the stock market, which he frequently touts as a reflection of his economic agenda. Further attempts to soothe Wall Street’s concern can be expected.
Officials to request emergency funding: The White House is preparing to ask Congress for emergency funding to fight the coronavirus, a spokesman said Monday, but declined to say how much would be requested.
“We need some funding here to make sure that we protect all Americans,” White House spokesman Hogan Gidley said on Fox News.
He declined, however, to specify how much funding would be requested.
Some news outlets reported the administration would ask for approximately $1 billion, which some experts doubted would be enough funding.
But an administration official pushed back on that figure Monday, saying it is not accurate but adding that a final number has not yet been determined.
The Hill’s Peter Sullivan has more on the emergency funding here.
Wednesday, February 26: America’s Opioid Epidemic: Lessons Learned & A Way Forward
Join The Hill on Wednesday, February 26th in downtown Washington, D.C. as we host a conversation about expanding access to treatment and helping those battling opioid addiction begin the journey toward long-term recovery. We will be speaking with Nora Volkow, director of the National Institute on Drug Abuse, Rep. David Joyce (R-Ohio), Rep. Paul Tonko (D-N.Y.). RSVP today!
LEADING THE DAY
Housing advocates decry Trump budget cuts: Advocates for housing programs are bashing President Trump’s proposal to slash funds and accessibility to housing assistance.
- Trump proposed cutting a slew of federal programs to the bone in his fiscal 2021 budget released this month with a focus on housing aid.
- Overall, Trump’s budget would cut $8.6 billion from housing programs, a 15 percent reduction. Deeper cuts, to the tune of 43 percent, would hit public housing funds while also eliminating programs such as the National Housing Trust Fund, Home Investment Partnerships, Community Development Block Grant and Choice Neighborhoods.
- In addition to calling for reduced funding at the Department of Housing and Urban Development, the White House also called for changes to mandatory programs designed to provide housing assistance for low-income residents.
“We’re in the midst of an affordable housing crisis in this country,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition, an anti-poverty group. “It’s disappointing that they would propose such a budget that scales back so many supports for federal housing.”
GOOD TO KNOW
- The Wall Street Journal: “With Migrant Workers in Limbo, Part of China’s Economy Is Stalled”
- A statement from the Group of 20 (G-20) meeting of finance ministers in Saudi Arabia mentions climate change, despite reported resistance from the U.S. on including the language.
- Ed Silverman, the majority staff director for the Senate Banking Committee between 2009 and 2011, will join the financial sector watchdog group Better Markets, the non-profit announced Monday. Silverman most recently served as senior vice president and head of government relations for TD Bank.
- Intuit, which sells TurboTax, QuickBooks and Mint, announced Monday it will acquire Credit Karma for $7.1 billion.
- Bloomberg News: “Seattle Tech Employees Earn 56% More Than NYC Finance Workers”
- CNBC: “The average rate on the popular 30-year fixed mortgage hit 3.34 percent on Monday, according to Mortgage News Daily.