The daily business briefing: December 21, 2020
Congress reaches $900 billion COVID-19 stimulus deal, Tesla debuts in the S&P 500, and more
Lawmakers reach deal on $900 billion COVID-19 relief package
Congressional Democrats and Republicans reached a deal late Sunday on a new $900 billion coronavirus relief package. The legislation will include stimulus checks of $600 per person, with smaller benefits for those who earned more than $75,000 last year. The package also includes enhanced unemployment benefits of $300 per week starting as early as Dec. 27. Negotiators have been pushing for financial relief as record numbers of coronavirus infections, hospitalizations, and deaths have stoked concerns of more economic damage as previous benefits expire. "More help is on the way," Senate Majority Leader Mitch McConnell (R-Ky.) said. The deal is considerably smaller than the $2.2 trillion stimulus package passed in March, but still one of the largest ever.
Tesla makes its S&P 500 debut
Tesla on Monday makes its debut in the S&P 500, becoming the most valuable company ever admitted to Wall Street's main benchmark index. Tesla shares jumped to a record high on Friday in busy trading ahead of the move. The surge came as index-tracking funds bought $90.3 billion Tesla shares to keep their portfolios in lockstep with the S&P 500. The electric-car maker's stock has gained 70 percent since mid-November, when its admission to the S&P 500 was announced. The shares are up by 700 percent in 2020. The stock gains have lifted Tesla's market value to $660 billion. It is now the sixth most valuable publicly traded company in the world.
Stock futures fall before votes on coronavirus relief and federal spending
U.S. stock index futures dropped sharply early Monday, hours after Congress reached a deal on a new COVID-19 relief package, as concerns about a virulent new coronavirus strain in the U.K. prompted a London lockdown and widespread travel restrictions against Britons. Futures for the Dow Jones Industrial Average and the S&P 500 were down by more than 2 percent several hours before the opening bell. Those of the Nasdaq fell by about 1.5 percent. Negotiators finalized the deal as a deadline arrived for approving a broad spending bill needed to avert a government shutdown. Congress passed a one-day extension to keep government agencies running while the relief package and spending bill are finalized. The coronavirus stimulus package and the spending legislation are headed for votes on Monday.
U.S. airport traffic high despite calls to avoid holiday travel
Airport travel is surging ahead of Christmas and New Year's despite surging COVID-19 cases and pleas from public health officials for Americans to avoid traveling over the holidays. More than 1 million people passed through U.S. airport security checkpoints daily over the weekend, a level not seen since Nov. 29 at the end of the Thanksgiving weekend. Experts say Thanksgiving travel and gatherings contributed to the December surge in coronavirus infections. The seven-day rolling average of new cases has jumped from 176,000 a day before Thanksgiving to more than 215,000 a day. The Centers for Disease Control and Prevention has issued an advisory telling Americans that "postponing travel and staying home is the best way to protect yourself and others from COVID-19."
Brewers, restaurants to get boost under COVID-19 relief bill
Brewers and restaurateurs are among the big beneficiaries of the coronavirus stimulus package Congress is set to vote on Monday. Lawmakers did not immediately release details of the agreement, reached after months of negotiations, but it reportedly permanently extends lower tax rates for beer, wine, and spirit makers who had been bracing for excise tax increases Jan. 1. The package also reportedly includes a business-meals tax break President Trump has pushed for 2021 and 2022. Some lawmakers and economists didn't think it was a good idea to offer a "three-martini-lunch" during the pandemic because it encourages indoor dining. But restaurateurs, including Wolfgang Puck, convinced Trump that it would help struggling restaurants. Sen. Tim Scott (R-S.C.) called the measure a "no-brainer" that will "help save millions of restaurants."