World stocks surged 11% on Wednesday and commodities also made gains, as COVID-19-battered markets leapt on news of a $2 trillion U.S. coronavirus stimulus package. News of the deal being reached gave world equity indexes their first back-to-back gains in a month as volatility gauges eased away from crisis levels. Europe’s main markets in London, Frankfurt and Paris all opened 4%-5% higher after the Nikkei in Tokyo had risen almost 7%.
The U.S. coronavirus stimulus deal, billed as a $2 trillion package, is expected to include $500 billion in direct payments to people and $500 billion in liquidity assistance.
In the currency markets, the dollar slipped for a third straight session as the scramble for liquidity was soothed again by the super-sized U.S. stimulus plan.
In metals markets, gold changed hands at $1,610.0 per ounce XAU=, retaining its gains of almost 5% on Tuesday, its biggest jump since 2008.
Oil prices bounced another 2% as hopes for U.S. stimulus also boosted hopes for global demand.
“Ladies and gentleman, we are done,” White House legislative affairs director Eric Ueland said right before 1 a.m. after leaving Senate Majority Leader Mitch McConnell’s office following negotiations that have gone around the clock since last Friday. “We have a deal.”
McConnell formally announced the agreement on the Senate floor, saying, “At last, we have a deal. After days of intense discussions, the Senate has reached a bipartisan agreement on a historic relief package for this pandemic.”
The majority leader described it as “a war-time level of investment for our nation,” and said that the Senate would move to pass it later in the day on Wednesday. The Senate will re-convene at noon. An exact time has not yet been set for the vote.
Larry Kudlow, President Donald Trump’s chief economic adviser, called the package “the single largest main street assistance program in the history of the United States” at a White House briefing on Tuesday. “This legislation is urgently needed to bolster the economy, provide cash injections and liquidity and stabilize financial markets to get us through a difficult and challenging period in the economy facing us right now,” Kudlow said.
Under the plan as it was being negotiated, individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 — and an additional $500 per each child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.
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MacDailyNews Note: More info on the Prevention & Treatment of Coronavirus Disease 2019 (COVID-19) via the U.S. CDC is here. Track the Coronavirus COVID-19 Global Cases by the Center for Systems Science and Engineering (CSSE) at Johns Hopkins University (JHU) here.