Happy Wednesday and welcome back to On The Money, where we hope your Wednesday was as super as Joe Biden’s Tuesday. 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 soar as Biden victories, central banks calm anxious investors: Stocks on Wednesday closed with major gains after a string of major Democratic primary victories for former Vice President Joe Biden and a flood of global central bank stimulus.
The Dow Jones Industrial Average closed with a gain of 1,173 points, a roughly 4.5-percent rise, as the S&P 500 rose 4.2 percent and the Nasdaq Composite rose 3.8 percent.
- Wall Street analysts attributed Wednesday’s strong open to a rally in health care stock prices likely driven by Biden’s resounding Super Tuesday wins. Biden is seen among investors as less of a threat to the health care industry than his chief rival, Sen. Bernie Sanders (I-Vt.), who has proposed a nationalized health care system that would supplant private insurers.
- Market experts also credited the Federal Reserve’s emergency rate cut, subsequent cuts issued by central banks in Canada and China, and strong U.S. economic data released earlier Wednesday for the broader stock rally.
LEADING THE DAY
House passes $8.3 billion measure to fight coronavirus: The House overwhelmingly passed an $8.3 billion supplemental funding bill Wednesday to respond to the coronavirus, marking the first major step by Congress to tackle the growing number of cases and deaths in the U.S.
The 415-2 vote came just hours after lawmakers in both chambers struck the bipartisan deal for emergency funding. The Senate is expected to take up the measure as early as this week.
Lawmakers on both sides of the aisle praised the measure and called for the Senate to act quickly and send the bill to President Trump’s desk. The Hill’s Juliegrace Brufke and Jessie Hellmann break down the measure here.
- The bill provides $7.76 billion to agencies combating the coronavirus — three times the $2.5 billion initially requested by the White House.
- The legislation also authorizes another $500 million in waivers for Medicare telehealth restrictions, bringing the total to about $8.3 billion.
- Vaccine affordability also emerged Tuesday as a final roadblock to getting a deal.
- Who voted against it? House Freedom Caucus Chairman Andy Biggs (R-Ariz.) and Rep. Ken Buck (R-Colo.), citing concerns about spending levels.
Trump touts economic success at Hispanic convention: President Trump touted his administration’s economic agenda and its intended impact on Hispanic businesses during a Wednesday address to the Latino Coalition Legislative Summit.
“You’re having the best year you’ve ever had. I have to say that. Last year was your best, and we’re beating it this year,” Trump told the crowd.
“With the hard work, love and devotion of millions of incredible Hispanic Americans, our country is thriving, our people are prospering and our future has … really never looked better than it does right now,” he added.
- Trump touted the United States-Mexico-Canada Agreement, which he called “incredible” compared with the “horrible” North American Free Trade Agreement it replaced.
- Trump also said his administration will continue to pressure Venezuelan President Nicolás Maduro. The administration has consistently ratcheted up sanctions on Maduro while recognizing opposition leader Juan Guaidó as the country’s legitimate president, but Maduro has so far refused to budge from power.
The Hill’s Rafael Bernal takes us there.
Mnuchin details IRS challenges with cash-only marijuana businesses: Treasury Secretary Steven Mnuchin said Wednesday that the cash-only nature of marijuana businesses poses challenges for the IRS.
- Many states have legalized medical or recreational marijuana. However, banks have been hesitant to serve marijuana businesses even in states that have legalized use of the drug because they want to avoid violating federal anti-money laundering and illicit finance laws. That has led to cash-only marijuana businesses.
- “This creates significant problems for the IRS,” Mnuchin said at a hearing held by a House Appropriations subcommittee.
Mnuchin’s comments come as a House-passed bipartisan bill aimed at giving banks legal cover to serve the cannabis industry remains stalled before the Senate Banking Committee under opposition from Chairman Mike Crapo (R-Idaho).
GOOD TO KNOW
- Reuters: “The Federal Reserve unveiled new rules on Wednesday that create a ‘stress capital buffer’ to determine how much banks must hold in reserve to guard against downturns.”
- Asian businesses in Philadelphia are suffering from a sharp drop in business over “unfounded fears” linked to the coronavirus outbreak, the city’s Federal Reserve Bank revealed in a Wednesday report.
- Five top business leaders on Wednesday put on a united front to tell Americans not to panic about the coronavirus outbreak.
- Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland, said that the policy decisions made by the country’s central bank aren’t influenced by political pressure.