As COVID-19 continues to spread across the world, the US has overtaken other countries as the leader in the number of infected people, with more than 141,000 confirmed cases. Investors are now turning their attention to policymakers last week as a number of measures to boost the economy.
With the US and the global economy on brink of a recession (or perhaps it’s already in one), the focus last week was on congress, which after numerous failed attempts managed to pass a $2.0 trillion stimulus bill, the largest ever in recorded history. The bill was voted on and signed into law on Friday, but the anticipation not only kept investors on the edge but also resulted in the biggest three-day rally of the stock market since 1931. In this way, the Dow Jones Industrial Average surged by 13.68% last week, while the S&P 500 and the NASDAQ Composite advanced by 10.93% and 9.53%, respectively.
The stimulus package is one of the most far-reaching pieces of legislation ever introduced. It includes direct payments to individuals and to households with children, an extension of unemployment benefits, allocations to state and local governments, corporate aid, loans to small businesses, and allocations to the healthcare system.