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Lawmakers unveil bipartisan $900 billion coronavirus stimulus package as stalemate drags on

Bipartisan lawmakers are pushing a new stimulus plan as Nancy Pelosi and Mitch McConnell have made no progress on a coronavirus relief bill….

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Bipartisan lawmakers unveiled a coronavirus stimulus package Tuesday after months of congressional inaction on curbing the economic damage from the outbreak.

The roughly $908 billion proposal includes $288 billion in small business aid such as Paycheck Protection Program loans, $160 billion in state and local government relief and $180 billion to fund a $300 per week supplemental unemployment benefit through March, according to a draft framework. It would put $16 billion into vaccine distribution, testing and contact tracing, funnel $82 billion into education, put $45 billion into transportation and allocate funds for rental assistance, child care and broadband.

The proposal would not include another direct payment to most Americans. It also would offer temporary federal protection from coronavirus-related lawsuits — a provision Democrats have opposed — while states determine their own laws.

Democratic Sen. Mark Warner of Virginia, a member of the congressional group that has discussed a new relief plan, earlier called it an “interim package” to provide support until President-elect Joe Biden takes office in January.

“If there’s one thing I’m hearing uniformly it’s: ‘Congress, do not leave town for the holidays leaving the country and the economy adrift with all these initial CARES [Act] programs running out,'” Warner told CNBC’s “Squawk Box.”

It is unclear whether congressional leaders will embrace the proposal or if it will lead to a breakthrough before the end of the year, when many programs expire. Democrats have opposed liability protections and pushed for a $600 per week supplemental jobless benefit, while the GOP has pushed against new state and local aid.

Sen. Joe Manchin, D-W.V., who worked on the proposal, said the group had no assurances from House Speaker Nancy Pelosi, D-Calif., or Senate Majority Leader Mitch McConnell, R-Ky., that they would vote on the plan.

U.S. Senator Mitt Romney (R-UT) speaks as bipartisan members of the Senate and House gather to announce a framework for fresh coronavirus disease (COVID-19) relief legislation at a news conference on Capitol Hill in Washington, U.S., December 1, 2020.

Kevin Lemarque | Reuters

Still, it underscored the rumbling among rank-and-file lawmakers to pass more aid even as party leaders fail to break a months long impasse.

“It is absolutely essential that we pass emergency relief,” said Sen. Susan Collins, a Maine Republican who worked on the plan, at a news conference announcing the proposal.

The pandemic has rampaged through the country, straining hospitals and forcing state and local officials to implement new business restrictions to slow infections. At the same time, lifelines put in place by Congress earlier this year will expire at the end of the year, hitting Americans already struggling to cover costs.

The programs lapsing at the end of December include an unemployment insurance extension, a federal student loan payment moratorium and eviction protections.

Pelosi and McConnell have not yielded ground from their respective $2.2 trillion and $500 billion aid bills. Leaders of the Democratic-held House and GOP-controlled Senate have not held formal talks on stimulus since the 2020 election on Nov. 3.

Talks between the Trump administration and Democrats collapsed before the election. On Tuesday, Pelosi and Treasury Secretary Steven Mnuchin plan to speak for the first time since late October.

Mnuchin told reporters that the pair will focus on a spending bill Congress needs to pass before Dec. 11 to avoid a government shutdown. They plan to mention coronavirus relief, he said.

Mnuchin later said during congressional testimony that he spoke with McConnell, President Donald Trump, House Minority Leader Kevin McCarthy, R-Calif., and White House chief of staff Mark Meadows and they agreed that Congress should craft a targeted fiscal response. The Treasury secretary said he wants to focus on “what we can pass quickly on a bipartisan basis to get the most difficult parts of the economy,” relief.

During the stalemate, members of both parties have urged compromise to ease some of the pressure on the economy and health-care system. On top of the economic programs, the federal government will likely need to approve funds to streamline distribution of Covid-19 vaccines in the coming months.

Senators who have joined in the discussions about the aid proposal include Warner, Collins, Manchin, Sen. Lisa Murkowski, R-Alaska, Sen. Mitt Romney, R-Utah, Sen. Maggie Hassan, D-N.H., and Sen. Bill Cassidy, R-La. House members including Democratic Rep. Josh Gottheimer of New Jersey and Republican Rep. Tom Reed of New York, leaders of the Problem Solvers Caucus, were also involved.

U.S. Senator Angus King (I-ME) holds a chart as bipartisan members of the Senate and House gather to announce a framework for fresh coronavirus disease (COVID-19) relief legislation at a news conference on Capitol Hill in Washington, U.S., December 1, 2020.

Kevin Lemarque | Reuters

Federal Reserve Chair Jerome Powell has also repeatedly called on Congress to send more fiscal relief to boost the economy. Asked about the aid proposal during congressional testimony Tuesday, he said it seemed the plan targets “a lot of the areas that could definitely benefit from help” and will “be experiencing a challenging winter.”

If the unemployment programs expire at the end of the year, about 12 million Americans could lose benefits. The two policies allow people to receive insurance for longer than they normally would and make freelance workers, contractors and others who normally would not qualify for benefits eligible to receive them.

Warner led a letter from about 30 Democratic senators to the chamber’s leadership on Tuesday calling to extend both policies. They wrote that the loss of benefits around Christmas would be “particularly cruel,” especially as the outbreak is expected to worsen in the winter months.

Some lawmakers could push to tie coronavirus aid provisions to a spending bill.

— CNBC’s Ylan Mui and Jeff Cox contributed to this report

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Source: https://www.cnbc.com/2020/12/01/coronavirus-stimulus-update-senators-to-unveil-relief-bill.html

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JPMorgan Chase beats profit estimates on strong trading, $5.2 billion release of loan-loss reserves

JPMorgan posted first-quarter profit of $4.50 a share, much higher than the $3.10 per share expected by analysts surveyed by Refinitiv.

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JPMorgan Chase on Wednesday reported profit and revenue that exceeded analysts’ expectations on robust trading results and a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop.

The bank posted first-quarter profit of $14.3 billion, or $4.50 a share including a $1.28 per share benefit from the reserve release, higher than the $3.10 per share expected by analysts surveyed by Refinitiv. Excluding the impact of a $550 million charitable contribution, which lowered earnings by 9 cents, the bank earned an adjusted figure of $4.59, exceeding the $3.10 estimate.

Companywide revenue of $33.12 billion exceeded the $30.52 billion estimate, driven by the firm’s trading operations, which produced about $1.8 billion more revenue than expected.

JPMorgan’s release of $5.2 billion in reserves is the biggest sign yet that the U.S. banking industry is now expecting to have fewer loan losses than it did last year, when it set aside tens of billions for defaults anticipated from the coronavirus pandemic. A year ago, the firm had added $6.8 billion to credit reserves.

“Overall, this was a great quarter for JPMorgan,” said Octavio Marenzi, CEO of consultancy Opimas. “It is now increasingly clear that the bank over-reserved, and that money is now flowing back into its earnings, concealing some of the weakness in consumer banking.”

JPMorgan shares dipped less than 1%.

Fixed income trading produced $5.8 billion in revenue, a 15% increase that exceeded analysts’ estimates by more than $800 million, on activity in securitized products and credit markets. Equities trading revenue surged 47% to $3.3 billion, a full $1 billion more than estimates, on “strong performance across products.”

JPMorgan, with the world’s biggest Wall Street bank by total revenue, was expected to benefit from robust investment banking fees driven by record issuance of special purpose acquisition companies, which saw more activity in the first quarter than all of 2020, itself a record year.

That came to pass: The firm said first-quarter investment banking revenue surged 222%, or a full $2 billion, to $2.9 billion, exceeding the estimate of $2.65 billion.

Most of the quarter’s reserve release came from the bank’s retail division: The firm said $3.5 billion was tied to the bank’s credit card borrowers, and another $625 million from home loan borrowers.

While that meant that the firm’s consumer and community banking division saw profit surge by $6.5 billion from a year earlier, to $6.73 billion, the bank said that card and mortgage revenue was impacted by lower balances as flush consumers pay down their debts.

In the release, CEO Jamie Dimon called loan demand “challenged,” but during a call with reporters Wednesday, Dimon added that the dynamic would ultimately be good for loan demand because consumers were in good shape.

Dimon struck an optimistic tone for the near-term economic future in the U.S., similar to comments he made this month in his annual shareholder letter.

“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth,” Dimon said in the release.

Analysts will also be curious about the pace of share repurchases the bank is expected to make. Last month, the Federal Reserve said banks that pass the industry’s 2021 stress test at mid-year will be allowed to resume higher levels of dividend payouts and buybacks starting June 30.

Shares of JPMorgan rose 21% so far this year, compared to the 25% advance of the KBW Bank Index.

After JPMorgan’s earnings statement, Goldman Sachs also released first-quarter results that crushed forecasts with record first-quarter net profits and sales due to strong performance in trading and investment banking.

Here are the JPMorgan numbers:

Earnings: $4.59 per share vs. $3.10 per share expected by analysts polled by Refinitiv.
Revenue: $33.12 billion vs. $30.52 billion expected.

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Correction: JPMorgan’s EPS figure comparable to estimates has been adjusted 9 cents higher to account for a one-time charitable contribution.

JPMorgan shares dipped less than 1%.

Source: https://www.cnbc.com/2021/04/14/jpmorgan-jpm-earnings-q1-2021.html

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Coinbase drops below debut price

Coinbase held its direct listing on the Nasdaq on Wednesday, luring public market investors who’ve been waiting to get into the cryptocurrency exchange.

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Coinbase shares opened at $381 on the Nasdaq Wednesday morning, giving the cryptocurrency exchange an initial market cap of $99.6 billion on a fully-diluted basis. Shares quickly shot up as high as $429, giving it a market cap of $112 billion on a fully-diluted basis, before dropping back below the debut price.

The price was still well above the reference price of $250 set on Tuesday night, but no shares were traded on public markets at that price.

Skirting the traditional IPO process, Coinbase listed its stock directly, allowing employees and existing shareholders to sell shares immediately at a market-based priced.

Excluding options and restricted stock units, Coinbase’s market cap was about $80 billion at the opening price. Including options and RSUs, it’s already one of the 85 most valuable U.S. companies.

Founded in 2012 as a way to simplify the purchase of bitcoin, Coinbase has emerged as the most popular crypto exchange in the U.S. and soared in value alongside digital currencies bitcoin and ethereum. The service now has 56 million users, up from 43 million at the end of 2020 and 32 million the year before that. In its last private financing round in 2018, investors valued Coinbase at $8 billion.

Coinbase is hitting the public market as a record amount of cash pours into cryptocurrencies and tech investors are thirsty for high-growth stories. Snowflake, Palantir, DoorDash, Airbnb and Roblox have all gone public in the past six months and have market capitalizations ranging from $45 billion to $106 billion.

Relative to those companies and others in the IPO pipeline, Coinbase’s recent growth is unparalleled. The company said last week in announcing preliminary first-quarter results that revenue in the period surged ninefold from a year ago to $1.8 billion, and net income climbed from $32 million to between $730 million and $800 million. The number of monthly transacting users (MTUs) climbed from 2.8 million three months earlier to 6.1 million.

For the full year of 2020, revenue more than doubled to $1.28 billion, and the company swung from a loss in 2019 to a profit of $322.3 million.

Most transactions on Coinbase involve the purchase of bitcoin or ethereum, which have been on a historic tear, climbing over 800% and 1,300%, respectively, in the past year. The company has said that its short-term performance will largely be determined by crypto prices.

Bryan Armstrong, Coinbase’s co-founder and CEO, owns 39.6 million shares. In August, Armstrong was granted a multibillion-dollar performance award tied to the company’s stock price, potentially letting him purchase up to 9.29 million options at $23.46 over 10 years.

WATCH: Coinbase public debut is historic moment for cryptocurrencies

Founded in 2012 as a way to simplify the purchase of bitcoin, Coinbase has emerged as the most popular crypto exchange in the U.S. and soared in value alongside digital currencies bitcoin and ethereum. The service now has 56 million users, up from 43 million at the end of 2020 and 32 million the year before that. In its last private financing round in 2018, investors valued Coinbase at $8 billion.

Source: https://www.cnbc.com/2021/04/14/coinbase-to-debut-on-nasdaq-in-direct-listing.html

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States rush to replace J&J vaccine appointments after FDA recommends pause

The FDA and CDC recommended a pause in the use of J&J’s vaccine after six women developed a rare blood clotting disorder.

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More than two dozen states took steps Tuesday to halt inoculations with Johnson & Johnson‘s coronavirus vaccine, shortly after the Food and Drug Administration recommended to pause its use after reports some women developed a rare blood clotting disorder.

The states, like the FDA and the Centers for Disease Control and Prevention, stressed that they were acting out of an abundance of caution, as more than 6.8 million doses of J&J’s vaccine have been injected and only six of the blood clotting cases have so far been reported.

J&J said in a statement that “no clear causal relationship” has been identified between the rare type of blood clots and the vaccine, adding it is working closely with regulators to assess the data.

New York Health Commissioner Dr. Howard Zucker said the state will “immediately” stop administering the single-dose J&J inoculation, and will use Pfizer‘s two-shot vaccine in its place for already scheduled appointments.

At least 25 other states, along with Washington, D.C., and Puerto Rico, also announced they are taking J&J’s vaccine doses out of their distribution plans.

Those precautions may not be in effect for long, however: Acting FDA Commissioner Janet Woodcock said Tuesday that she expected the pause to last only for a matter of days.

Dr. Anne Schuchat, principal deputy director of the CDC, noted Tuesday that people who got the J&J vaccine more than a month ago are at very low risk for developing the blood clots. All six reported cases occurred in women ages 18 to 48, whose symptoms developed within two weeks after they received the shot.

New Jersey’s Department of Health said that all vaccination sites in the state “have been told to cancel or put on hold appointments for the J&J vaccine until further notice.” The agency said it will work with those sites to replace J&J appointments with an alternative two-dose vaccine.

Virginia “will cease all Johnson & Johnson vaccines” while the FDA investigates the “extremely rare possible side effect,” according to a statement from the state’s vaccination coordinator, Dr. Danny Avula.

Connecticut’s Department of Public Health recommended all Covid vaccine providers stop using J&J’s vaccine “for the time being” while the FDA and the CDC complete their review.

Ohio Gov. Mike DeWine and top health officials in his state issued a similar advisory.

Massachusetts’ Department of Public Health notified all vaccine providers in the state to stop administering the J&J vaccine, “effective immediately.”

The other states are Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, North Carolina, Rhode Island, South Dakota, Texas, Utah and West Virginia.

Source: https://www.cnbc.com/2021/04/13/states-rush-to-replace-jj-vaccine-appointments-after-fda-recommends-pause.html

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