What’s happening: Talks in Brussels about a € 750 billion ($ 859 billion) aid package lasted until its fourth day on Monday, as the frugal northern countries stood firm by limiting the proportion of subsidies in the combination, instead of loans. The conditions that would be attached to the financing also remain a point of discussion.
“We are not there yet,” said Dutch Prime Minister Mark Rutte. “Things could still fall apart, but it seems a little more hopeful than it did last night.”
This is good news considering that the euro is rising on the assumption that an agreement will be reached. The coin rose to $ 1.15 on Monday, its highest level against the dollar since early 2019.
There is a lot left in the air, and not only liberal and conservative legislators face off. Republicans in the White House and Senate disagree on the amount of funding that should be awarded to the U.S. Centers for Disease Control and Prevention.
At stake: An explosion of coronavirus cases in the Sun Belt states has threatened the fragile recovery of the US, pressuring lawmakers to quickly agree on the next round of assistance. Goldman Sachs said in a note to clients that consumer spending could drop back to June levels if other states with an increasing caseload follow California by reimposing strict social distancing.
The bank said that if the recovery stops or reverses this quarter, growth is likely to be stronger than expected in 2021. But it could also lead to long-term scarring of the economy.
“This could come in the form of permanent business closings or, with the now-stagnant job market recovery, led by setbacks in the Sun Belt, missed opportunities to quickly re-hire workers even on temporary layoffs,” wrote the strategists led by chief economist Jan Hatzius. Sunday note
Although the supplemental relief technically doesn’t expire until July 31, this will be the last week benefits are paid. If no consensus is reached, more than 25 million people will be thousands of dollars poorer each month, reports my colleague at CNN Business, Tami Luhby.
Investors feel good about the vaccine schedule.
Investors are increasingly optimistic about the timeline for a Covid-19 vaccine as governments accumulate pre-orders and data from clinical trials continues to come in.
The latest: A Deutsche Bank survey of 500 market professionals released Monday shows growing optimism, with 56% of respondents expecting a vaccine in the next 12 months. That’s a 37% increase in June.
The positive outlook comes as drug makers publish clinical study results that could be promising, triggering sharp increases in stocks.
The company has already signed agreements with countries around the world to supply hundreds of millions of doses if its vaccine is determined to be safe and effective. Shares of AstraZeneca have recovered almost 24% this year and gained another 4% on Monday in London.
Pfizer shares rose more than 7% last week, while BioNTech soared 21%. Valneva’s shares rose 10% in Paris on Monday.
Some movements linked to Covid-19 drugs are even more dramatic. Shares in Synairgen, a British biotech company, rose 451% in London on Monday after the company said a trial of its coronavirus treatment reduced the number of patients needing to be placed on ventilators. Its shares have soared more than 2.794% so far this year.
Why do the largest companies in Silicon Valley bet on India?
Since the early 2020s, the biggest tech names in the US have invested around $ 17 billion in the country, reports my CNN Business colleague Rishi Iyengar.
See here: Amazon promised $ 1 billion in January, Facebook invested nearly $ 6 billion in late April, and Google topped them all last week with a commitment of $ 10 billion. They are part of a wave of investment in India’s tech industry this year that now exceeds $ 20 billion, with most coming from the United States.
The avalanche of investments highlights something that has been true for years: India’s digital economy, with more than 700 million Internet users and approximately 500 million still to connect, is simply too big a prize for Big Tech to do. ignore.
But geopolitics could also be playing a role. India’s diplomatic dispute with China has spread to technology, aligning it with the Trump administration’s own mistrust of Chinese companies. Diminishing scope of technology cooperation with China, coupled with new threats to footholds in places like Hong Kong, have made the presence in India even more crucial.
“China, through recent actions, has effectively delivered the United States to India for a generation,” said Ravi Shankar Chaturvedi, director of research at the Tufts University Business Institute in the global context.
Until next time
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