Daily Archives: August 10, 2020

Americas

What’s in #Trump’s Executive Actions on #Coronavirus Aid—and What’s Not – WSJhttps://t.co/KKqnLX8T2O

— Christophe Barraud (@C_Barraud) August 10, 2020

#WhiteHouse officials, Democrats spar over legality, substance of executive orders – The Hillhttps://t.co/5tPCl8e36D

— Christophe Barraud (@C_Barraud) August 10, 2020

#Trump pledged to permanently scrap the payroll taxes used to fund Social Security and Medicare if he wins re-election – Business Insiderhttps://t.co/GlLYpY6htx

— Christophe Barraud (@C_Barraud) August 10, 2020

Kudlow says Trump 'did not mean that he was eliminating the Social Security tax' – The Hillhttps://t.co/yu7geYTcHR

— Christophe Barraud (@C_Barraud) August 10, 2020

Pelosi, Mnuchin open door to narrower COVID-19 aid through 2020 – Reutershttps://t.co/4otwLLzD7P

— Christophe Barraud (@C_Barraud) August 10, 2020

One-Third of American Renters Expected to Miss Their August Payment – Bloomberg
*Link: https://t.co/eA2LbQgQzi pic.twitter.com/BYyDblT1fW

— Christophe Barraud (@C_Barraud) August 10, 2020

Fed's Evans says another coronavirus aid package 'incredibly important': interview https://t.co/yyjcGMIKPg pic.twitter.com/rgv8Dao0OL

— Reuters Business (@ReutersBiz) August 10, 2020

Asia

#Coronavirus latest:
-U.S. health chief praises Taiwan’s virus response
-Global cases top 19.7 million; deaths pass 729,000
-Mexico reports 4,376 new cases
-Vietnam confirms two more deaths from virus, total cases rise to 841https://t.co/fsm9JPKKeW

— Bloomberg Asia (@BloombergAsia) August 10, 2020

Tencent shares fall further as worries about U.S. action persist https://t.co/dVZysdIChz

— Bloomberg Asia (@BloombergAsia) August 10, 2020

China's factory deflation slows in July as recovery gains strength https://t.co/0Flb0JpwqY pic.twitter.com/LUIcuwPkMa

— Reuters Business (@ReutersBiz) August 10, 2020

#Japan's summer holiday begins quietly amid requests to avoid trips – Kyodohttps://t.co/jo9fr6DYis

— Christophe Barraud (@C_Barraud) August 10, 2020

#China Seeks to Scrap Ratings Requirement for Some Bond Issuers – Bloomberghttps://t.co/6ZjP26r7EZ

— Christophe Barraud (@C_Barraud) August 10, 2020

Hong Kong and Chinese officials condemned and mocked a Friday move by the Trump administration to impose sanctions on Hong Kong’s chief executive, Carrie Lam, and 10 other senior officials for their roles in a crackdown on political dissent https://t.co/kXa6M8NWaF

— The New York Times (@nytimes) August 10, 2020

Europe

One in Three U.K. Employers Plans to Cut Jobs in This Quarter – Bloomberghttps://t.co/yZ64PJsuDW

— Christophe Barraud (@C_Barraud) August 10, 2020

citizens living in are to be granted extra rights to work and settle in a different country within the bloc. https://t.co/NM7ylRFvyT

— POLITICOEurope (@POLITICOEurope) August 9, 2020

According to a government-sponsored exit poll, President Aleksandr Lukashenko of Belarus won just under 80% of the vote against 4 rivals. Critics dismissed the election as rigged, and protesters faced a heavy police response. https://t.co/gWmRj15kUN

— The New York Times (@nytimes) August 10, 2020

Summary Key Macro Events

The US stimulus debate is likely to roll on this week after Donald Trump signed four presidential orders over the weekend (from 10)

CB Meeting (12)

2Q GDP 1st estimate (12)

CPI for July (12)

CB Meeting (13)

2Q GDP 2nd estimate (14)

Retail Sales for July (14)

Industrial Production for July (14)

Compliance meeting concerning the “Phase One” Trade deal (~Mid-August – no date for now)

 


 

China’s Data Deluge Set to Show Recovery Accelerating: Eco Week – Bloomberg
*Central banks in Mexico, Peru, New Zealand, Egypt set to meethttps://t.co/qoPqodFPtP

— Christophe Barraud (@C_Barraud) August 9, 2020

US stimulus debate, China inflation, UK growth figures https://t.co/PMKr1UCxdl

— FT Economics (@fteconomics) August 9, 2020

Markets could be challenged by Washington stimulus talks and China tensions https://t.co/kCw4AaJXkI pic.twitter.com/JGgIuQyF4L

— Patti Domm (@pattidomm) August 7, 2020

U.S., #China Plan to Review Phase-One #Trade Deal Mid-Month – Bloomberghttps://t.co/DlPvra8Ygp

— Christophe Barraud (@C_Barraud) August 5, 2020

U.S./China “#PhaseOne” Agreement: Good Luck For The Compliance Review
https://t.co/YvxWnY0MSJpic.twitter.com/tFWnooiZYD

— Christophe Barraud (@C_Barraud) August 5, 2020

 


 

Focus on Economic Calendar

Schedule for Week of August 9, 2020 https://t.co/H4nurtyEu6

— Bill McBride (@calculatedrisk) August 8, 2020

The U.S. retail-sales report for July caps another week of data that will shed more light on the pace of global recovery from the new coronavirus pandemic. https://t.co/7rH7AomgtK

— Real Time Economics (@WSJecon) August 9, 2020

The growth outlook for the world’s leading economies kept improving in July according to OECD data – Bloomberg
*However indicators show a weakness in recent trend
and remain well below pre-crisis levels and long term trends. pic.twitter.com/K2bDLCs22s

— Christophe Barraud (@C_Barraud) August 10, 2020

From Bourbon Street to Food Banks, Signs of a Slow U.S. Recovery – Bloomberg
*Link: https://t.co/wArVZDt3WM pic.twitter.com/eC5x0lMeKI

— Christophe Barraud (@C_Barraud) August 10, 2020

One-Third of American Renters Expected to Miss Their August Payment – Bloomberg
*Link: https://t.co/eA2LbQgQzi pic.twitter.com/BYyDblT1fW

— Christophe Barraud (@C_Barraud) August 10, 2020

The market value of the world’s equities has risen above the dollar value of the global economy. – Bloomberg
*Total stock-market capitalization reached $87.83T on Sunday, compared with the 2019 GDP of all countries at $87.75T.
*More interesting charts: https://t.co/K8hLgKY9Q1 pic.twitter.com/ti3wypOise

— Christophe Barraud (@C_Barraud) August 10, 2020

AAPL is 90% of the Russell 2000 pic.twitter.com/VntgwQNRte

— zerohedge (@zerohedge) August 10, 2020

After stimulus discussions between ground to a halt on Friday, President Donald Trump announced four executive actions on Saturday. The president’s four orders extend unemployment benefits, provide a payroll tax holiday, defer student loan payments through 2020 and extend the federal moratorium on evictions. Although the legal challenge seems obvious, several analysts also raised concerns about the effectiveness about Trump’s Executive Actions:

 

1- The administration is directing states to use a portion of the $150 billion Coronavirus Relief Fund (CRF) to pay augmented jobless benefits, covering 25% of a $400 weekly top-up to regular claims. To cover the remaining 75%, the federal government will repurpose $44 billion of the existing $70-plus billion in the Disaster Relief Fund (DRF). Even if a solution is better than none, using cash from the CRF and DRF doesn’t add extra stimulus.

 

2- According to Bloomberg, if the DRF is paying $300 a week to claimants, that amounts to around $30 billion per month (if employment situation remains broadly the same). As noted above, that money is capped at $44 billion, which at the current level of unemployment could run out in one to two months. Goldman Sachs economists said in a research note on Saturday that “The extra $400 unemployment payment is likely to last only a month.”

 

Struggling U.S. Economy Gets Limited Lifeline From #Trump Actions – Bloomberghttps://t.co/0F3J5bWdBg

— Christophe Barraud (@C_Barraud) August 9, 2020

The money for the new $300 federal boost to unemployment would last Into September…around the time for the big fight on the stopgap spending bill needed to avert Oct. 1 government shutdown

— Erik Wasson (@elwasson) August 8, 2020

 

3- The 6.2% collected from workers’ paychecks for social security would be deferred, not canceled as confirmed by Larry Kudlow yesterday. It means that both firms and workers will be on the hook for payments at a later date capping any boost to spending. Furthermore, the payroll tax holiday applies only to those making less than $100,000 a year and excludes the 20-plus million that are unemployed or exited the labor force in recent months.

 

Kudlow says Trump ‘did not mean that he was eliminating the Social Security tax’ – The Hillhttps://t.co/yu7geYTcHR

— Christophe Barraud (@C_Barraud) August 10, 2020

To recap:

1/ Evictions: No eviction moratorium or new rental $, asks HUD to “consider” if evictions should stop

2/ Unemployment: Uses $44B from FEMA to cover $300/week benefit for ~5 more weeks

3/ Taxes: Option to defer payroll tax payment, but w/o new law they’ll still be due

— Jeff Stein (@JStein_WaPo) August 9, 2020

 

4- The order also directs HUD to take action to “promote the ability of renters and homeowners to avoid eviction or foreclosure.” The WSJ highlighted that “It doesn’t reauthorize the eviction moratorium set in the Cares Act that expired at the end of July. That applied only to properties with government-backed mortgages, covering just one-third of renters.

 

What’s in #Trump’s Executive Actions on #Coronavirus Aid—and What’s Not – WSJhttps://t.co/KKqnLX8T2O

— Christophe Barraud (@C_Barraud) August 10, 2020

One-Third of American Renters Expected to Miss Their August Payment – Bloomberg
*Link: https://t.co/eA2LbQgQzi pic.twitter.com/BYyDblT1fW

— Christophe Barraud (@C_Barraud) August 10, 2020

 

5- Missing supports: Small-business aid is not an area where the White House has wiggle room to add additional funds while the actions also did not include another round of the checks that have been widely credited for helping to cushion the blow from the coronavirus pandemic.

 

$1,200 Stimulus Checks Not Included In Trump’s Executive Measures. Here Is What You’d Get – Forbeshttps://t.co/NCx3ISaaBT

— Christophe Barraud (@C_Barraud) August 10, 2020