The Opening Belle - McConnell Postpones Vote on $2,000 Stimulus

Senate Majority Leader Mitch McConnell on Tuesday put off a vote on increasing COVID-19 relief checks from $600 to $2,000 and urged senators to override President Donald Trump’s veto of a defense bill, in a rare challenge to his fellow Republican three weeks before Trump leaves office.

McConnell tied the larger checks, which were demanded by Trump and supported by Democrats, to two other measures the president wants but which most Democrats oppose.

The maneuver was likely to kill off all three measures.

Trump earlier on Tuesday assailed Republican leaders on Twitter, seeking to pressure them into increasing the checks and supporting his veto of the defense bill because it doesn’t repeal legal protections for social media companies that he wants scrapped.

The Senate must approve the higher relief payments as soon as possible, “unless Republicans have a death wish,” Trump tweeted, appearing to refer to next week’s close Georgia runoff elections that will determine control of the Senate.

A growing number of Republican Senators support raising the checks, including David Purdue and Kelly Loeffler, who are running in the Georgia races.

But other Republicans, worried about the cost to taxpayers, remain adamantly opposed.

Democrats believe their support for the $2,000 checks and Republican opposition will help them in Georgia.

McConnell introduced a bill late on Tuesday that combined the $2,000 checks with a provision scrapping the social media legal protections and another to study election security, a key issue for Trump who has claimed without evidence that fraud robbed him of victory in the November election.

McConnell has rejected Schumer’s call for a standalone Senate vote on the increased stimulus checks.

He has also refused to cave to Trump’s demands on the military bill, setting the stage for a vote to override the president’s veto in coming days.

It would be the first time Congress overrides a Trump veto.

“For the brave men and women of the United States armed forces, failure is simply not an option,” McConnell said. “So when it’s our turn in Congress to have their backs, failure is not an option either. I would urge my colleagues to support this legislation one more time.”

Overturning a presidential veto requires votes by two-thirds of the House and Senate. The House voted for an override on Monday and if the Senate follows, the bill becomes law despite Trump’s opposition.

The Senate is expected to hold a procedural vote on Trump’s veto on Wednesday evening, which could lead to final passage later in the week or over the weekend.

In a Twitter storm just before the Senate session started on Tuesday morning, Trump attacked “weak and tired” Republican leaders.

U.S. Treasury Secretary Steven Mnuchin said on Tuesday that $600 stimulus checks could begin arriving in people’s bank accounts as soon as this evening.

Mnuchin tweeted that payments may begin to arrive by direct deposit as early as Tuesday evening, and will continue arriving into next week. The government will begin mailing out paper checks on Wednesday for people without government-registered bank accounts.

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Oil gained more ground on Wednesday as a U.S. coronavirus fiscal aid package and a decline in crude oil inventories lifted prices.

“Oil prices have remained supported by a weaker U.S. dollar overnight and have finally found a friend in the API inventory report,” said Stephen Innes, chief global market strategist at Axi, a broker.

“This morning the American Petroleum Institute reported a much larger draw versus consensus in crude oil inventories for the week ending December 25.”

Oil prices could gain strength as vaccination programmes around the world begin next year, allowing countries to relax restrictions on movement and business activity.

U.S. physical crude oil grades strengthened on Tuesday as the API reported a decline in stockpiles, dealers said.

Crude oil stocks fell by 4.8 million barrels last week to about 492.9 million barrels, exceeding analysts’ expectations in a Reuters poll for a draw of 2.6 million barrels, data from API showed. [API/S]

In the short-term, concerns over coronavirus lockdowns are likely to cap gains.

China revised down its official GDP growth rate for 2019 to 6% from 6.1%, mainly due to a lower estimate for manufacturing output, a change that will make it slightly easier for officials to report economic expansion this year.

Gross domestic product in 2019 was 435 billion yuan ($67 billion) smaller than the initial estimate released in January, China’s statistics bureau said Wednesday. That amount is roughly equal to the GDP of Ghana last year, based on World Bank figures.

According to the latest estimate, China’s nominal GDP was 98.7 trillion yuan in 2019. The manufacturing sector saw the largest change -- with value-added output reduced by 503.8 billion yuan from an earlier estimate -- followed by the finance, transportation and construction sectors.

China often makes small revisions to GDP data, based on factors such as the collection of more comprehensive data from businesses. Beijing in January revised up the annual growth rates between 2014 and 2018. In 2019, it revised the estimated growth of 2017 GDP downwards by 0.1 percentage point to 6.8%.

Global index publisher FTSE Russell said it may delete more Chinese companies from its global benchmarks, after the Trump administration on Monday strengthened an executive order barring U.S. investment in Chinese firms with alleged military backing.

The U.S. Treasury Department on Monday published guidance clarifying that the executive order, released in November, would apply to investors in exchange-traded funds and index funds as well as subsidiaries of Chinese companies designated as owned or controlled by the Chinese military.

FTSE Russell, which has so far announced the exclusion of nine Chinese companies from its global indexes in response to the executive order, said in a statement late on Monday that it is reviewing the U.S. clarification and will make evaluation for “potential additional exclusions”.

FTSE Russell reiterated it will publish an announcement on Jan. 4, 2021, with any additional deletions being effective from the open on Jan. 7.

FTSE Russell has so far deleted from its global indexes eight U.S.-blacklisted Chinese companies, include Hangzhou Hikvision Digital Technology Co and China Railway Construction. It will remove Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC) in January.

Rival index publishers S&P Dow Jones Indices and MSCI made similar moves following Donald Trump’s November executive order.

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The Nationwide House Price Index in the UK increased 7.3 percent year-on-year in December of 2020, the most in six years, and beating market forecasts of a 6.7 percent rise.

Compared to the previous month, house prices increased 0.8 percent, after a 0.9 percent gain in November. “The outlook remains highly uncertain. Much will depend on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy.

However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March. ", Robert Gardner, Nationwide's Chief Economist, said.

Millions more people in England are expected to be placed under tougher coronavirus restrictions amid escalating case numbers.

Government sources have indicated an announcement later will see more areas move into tier four - "stay at home".

Health Secretary Matt Hancock is due to detail the changes - which could be introduced within days - in the House of Commons after 14:30 GMT.

Secondary schools are on course not to open as planned next week as ministers prepare to push "far more areas" into a Tier 4 lockdown on Wednesday.

Boris Johnson held a key Covid-O committee meeting that will pave the way for a major expansion of Tier 4 restrictions and for school reopenings to be delayed for at least a week.

It came as Covid cases surged to a record daily high of 53,135, with 414 deaths, piling pressure on the Prime Minister for a full national lockdown to combat the spread of the new and highly infectious strain of the virus.

Most Government scientists are now saying a national lockdown will be needed next month if schools are to reopen before the February half-term.

Mr Johnson is expected to chair a meeting on Wednesday to decide whether delaying the opening of secondary schools to all pupils for just a week until January 18 will be sufficient to stem the virus.

"Delaying for a week is not going to be enough for the scientists. If we are going to do something then it needs to be for the whole of January," said a source.

Professor Andrew Hayward, a member of the Scientific Advisory Group for Emergencies (Sage) and the New and Emerging Respiratory Virus Threats Group (Nervtag), called for "early decisive national action" to be taken, with the whole country told to stay at home.

He said that rather than an indefinite shutdown, schools could return "a little bit later" with testing and other methods in place.

The coronavirus vaccine designed by scientists at the University of Oxford has been approved for use in the UK.

It marks a major turning point and will lead to a massive expansion in the UK's immunisation campaign, which is aimed at getting life back to normal.

The UK has ordered 100 million doses from the manufacturer AstraZeneca - enough to vaccinate 50 million people.

The approval, by the medicines regulator, means the vaccine is both safe and effective.

The Oxford-AstraZeneca vaccine was designed in the first months of 2020, tested on the first volunteer in April, and has since been through large-scale clinical trials involving thousands of people.

The Oxford-AstraZeneca vaccine will lead to a significant increase in vaccination as it is cheap and easy to mass produce.

Crucially it can be stored in a standard fridge - unlike the Pfizer-BioNTech jab which needs ultra cold storage at -70C - so it will be far easier to get the Oxford vaccine to care homes and GP surgeries.

Priority groups for immunisation - including the elderly, care home residents and health and care workers - have already been identified.

Two full doses of the Oxford vaccine gave 62% protection, a half dose followed by a full dose was 90% and overall the trial showed 70% protection.