5 Big Winners On Historic $2 Trillion Coronavirus Stimulus
Zacks Investment Research | Mar 25, 2020 08:58AM ET
Over the past three months, stocks have taken a severe beating as investors remained apprehensive regarding the coronavirus pandemic, and its subsequently impact on corporate earnings and global economic growth. The pandemic has compelled several nations to resort to prolonged lockdown, which may result in both big and small companies defaulting as they grapple to survive a revenue slump.
But as investors try to make sense of the coronavirus-induced business slowdown, US Senate leaders have reached a historic agreement with the Trump administration to rescue American taxpayers and businesses ravaged by the deadly pandemic.
After days of marathon negotiations, the White House and the Senate struck a deal for rescue package worth $2 trillion, which stands out to be the biggest congressional bailout in US history. And it was certainly the need of the hour as intensifying coronavirus crisis overwhelmed the healthcare system and grinded the economy to a halt.
Senate majority leader Mitch McConnell said that “at last, the Senate has reached a bipartisan agreement on a historic relief package for this pandemic.” He further added that it’s a “wartime level of investment into our nation.”
So, what’s in the deal? At least $250 billion are expected to be set aside for direct payments to individuals and $350 billion to be provided to small business houses as loans. Nearly $500 billion to be set aside for distressed companies and $250 billion for unemployment insurance benefits.
The deal also prohibited bailed-out airlines to buy back stocks, or issuing any bonuses to chief executive officers. Further, the bill prohibits President Trump, Vice President Mike Pence and other members of the Congress from receiving any kind of government aids.
The landmark agreement is expected to inject enough cash to bolster the economy, and provide the required liquidity and help stabilize the financial markets. The Fed has also stepped up and unleashed an array of stimulus measures to date. The central bank said that it would buy an unlimited amount of Treasurys and mortgage-backed securities to stem the economic damage from the coronavirus outbreak.
The Fed, by the way, has already trimmed borrowing costs and pumped billions of dollars into the banking system to sustain the credit flow. Policy makers unanimously agreed to trim benchmark federal funds rate a full percentage point to a range of zero to 0.25%. Earlier this month, in a rare inter-meeting move, the Fed cut its benchmark interest rate by half a percentage point to a range of 1-1.25%.
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5 Best Stocks to Buy on Stimulus Measures
US lawmakers’ agreement on a sweeping stimulus package designed to curb the economic fallout from the coronavirus-induced public health crisis will certainly help fundamentally sound stocks stay afloat. Thus, investing in some of them seems prudent.
These stocks flaunt a Zacks Rank #1 (Strong Buy) and a Zacks Investment Research
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Zacks Investment Research
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