Stock market news live updates: Stock futures open flat with stimulus talks in focus; California Covid-19 cases top 500K – Yahoo Finance

Stock News

Posted on August 2, 2020

Stock futures struggled for direction Sunday evening, pointing to a mixed start to the first session of August as investors awaited another set of corporate earnings reports this week and a slew of data on the state of the labor market as parts of the country continue to grapple with a rise in coronavirus cases.

Stimulus discussions in Washington also remain in focus. As of late last week, Democratic and Republican lawmakers were in a logjam over the details of a new virus-related economic relief package, with the enhanced $600 per week in unemployment benefits having expired last Friday.

Democrats have pushed for a more than $3 trillion stimulus plan to extend this benefit at the $600 per week level, and also offer direct payments and more aid for state and local governments for food and housing assistance, and funding for schools and virus testing. The Republican stimulus plan, which totals around $1 trillion, would also include direct payments, but a lower level of enhanced weekly federal unemployment benefits and smaller sums in aid for Covid-19 testing and other funding.

Some economists highlighted that the lapse in enhanced unemployment benefits as negotiations remain under way would generate a near-immediate negative impact on consumer spending.

“The expiration last week of enhanced unemployment benefits will take about $12 billion per week out of consumers’ spending power – that’s 3.3% of weekly GDP – until some form of replacement passes Congress,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, estimated in a note Sunday.

“The gap between the two sides is so huge, to say nothing of the splits within the Republican ranks, that the chance of a deal before the recess, from August 10 through September 7, appears to be diminishing rapidly,” he added.

New coronavirus cases rose in some states over the weekend, with the ongoing outbreak further weighing on a linear economic recovery. California, the nation’s most populous state, on Sunday reported more than 9,000 new cases, in a total larger than the average over the previous 14 days of just under 8,900. The state has the highest number of total positive cases in the country, with the total breaching 500,000 for the first time this weekend.

But other areas that had seen resurgences recently, including Arizona and Florida, reported a slowdown in their numbers of new cases on Sunday.

Federal Reserve Bank of Minneapolis President Neel Kashkari, a voting member of this year’s Federal Open Market Committee, told CBS’s “Face the Nation” on Sunday advocated for tightened stay in place restrictions to help stem the spread of the coronavirus, and by extension, speed up the economic recovery in the US.

“If we were to lock down hard for a month or six weeks, we could get the case count down so that our testing and our contact tracing was actually enough to control it the way that it’s happening in the Northeast right now,” Kashkari said, according to a transcript of the interview.

“Now, if we don’t do that and we just have this raging virus spreading throughout the country with flare ups and local lockdowns for the next year or two, which is entirely possible, we’re going to see many, many more business bankruptcies, small businesses, big businesses, and that’s going to take a lot of time to recover from to rebuild those businesses and then to bring workers back in and re-engage them in the workforce,” he added. “That’s going to be a much slower recovery for all of us.”

Elsewhere, corporate earnings season continues Monday with companies including Tyson Foods (TSN), Clorox (CLX) due to report before market open, and Virgin Galactic (SPCE), Take-Two Interactive Software (TTWO) and Diamondback Energy (FANG) due after market close.

—

Here were the main moves in equity markets, as of 6:11 p.m. ET: