The Top Internet Stocks Were Disasters

The $900 billion stimulus is here. Further good news is the money will go out quickly. The $600 direct payments started going out on Tuesday evening. Even better news is there won’t be a delay in unemployment benefits. The 14 million people on benefits that could have lost them won’t see any issues. Plus, the 20 million people on unemployment benefits will be getting the extra $300 per week right away. This will help consumer spending in January. To be clear, 11 weeks of benefits won’t be enough to get to the end of this pandemic especially with the slow vaccine distribution at the onset. 11.4 million vaccine doses have been given to the states, but only 2.1 million have been administered.

The bad news is the $2,000 checks (additional $1,400) will not be going out because Mitch McConnell plans to attach unpopular items to this vote because it would be politically treacherous for Senate Republicans to vote on just the stimulus checks. It looks very bad if they vote no, but some of the diehard base doesn’t support the checks. Checks certainly aren’t fiscally conservative.

That’s not to say we oppose the checks. We’re just saying why some might oppose them. The monkey wrench in this situation is the Georgia Senate elections which could shift the balance of power in the Senate to the Dems which would increase the likelihood of another stimulus. The Georgian GOP candidates support the stimulus checks, but what is important is who controls the Senate because McConnell determines what the Senate votes on. He’s extremely powerful.

Economic Activity Tanks

Our expectation was and still is that this wave of COVID-19 cases won’t tank the U.S. economy like what occurred in the spring. That’s certainly the case with manufacturing data. It seems to be less so the case with the consumer, but with this latest stimulus, the consumer should get some help. That being said, the chart below shows economic activity fell to a standstill around the holidays which could be construed as a good thing because it means the virus didn’t spread any more than it already has been spreading.

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