COVID-19 relief bill: Wall Street sees an economic 'tailspin' if Trump doesn't sign

Wall Street is moving quickly to crystalize around the view that if President Trump doesn’t sign a new $ 900 billion bipartisan COVID-19 stimulus bill, then investors will get torched.

EvercoreISI strategist Dennis DeBusschere thinks a “tailspin” in markets and the economy will emerge if Trump doesn’t whip out his pen and sign on the dotted line immediately. Yet, that uncertainty is where things stand right now after Trump surprised many in D.C. with his take on the stimulus bill hammered out by bickering lawmakers in Congress this week.

In a video posted on Twitter Tuesday evening (below), Trump said the relief package “really is disgraceful” and includes “wasteful” items. “It’s called the Covid relief bill, but it has almost nothing to do with Covid,” Trump said in a video now viewed 21.3 million times. Trump called for stimulus checks of $ 2,000 for individuals and $ 4,000 for households.

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President Trump in the days since the Nov. 3 election

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US President Donald Trump arrives for a wreath laying ceremony at the Tomb of the Unknown Soldier on Veterans Day at Arlington National Cemetery in Arlington, Virginia, on November 11, 2020. – US President Donald Trump made his first official post-election appearance Wednesday for what should be a moment of national unity to mark Veteran’s Day, now marred by his refusal to acknowledge Joe Biden’s win. The president visited Arlington National Cemetery, four days after US media projected his Democratic rival would take the White House. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

US President Donald Trump attends a “National Day of Observance” wreath laying ceremony on November 11, 2020 at Arlington National Cemetery in Arlington, Virginia. – US President Donald Trump made his first official post-election appearance Wednesday for what should be a moment of national unity to mark Veteran’s Day, now marred by his refusal to acknowledge Joe Biden’s win. The president visited Arlington National Cemetery, four days after US media projected his Democratic rival would take the White House. (Photo by Brendan Smialowski / AFP) (Photo by BRENDAN SMIALOWSKI/AFP via Getty Images)

President Donald Trump gives two thumbs up to supporters as he departs after playing golf at the Trump National Golf Club in Sterling Va., Sunday Nov. 8, 2020. (AP Photo/Steve Helber)

President Donald Trump salutes as he participates in a Veterans Day wreath laying ceremony at the Tomb of the Unknown Soldier at Arlington National Cemetery in Arlington, Va., Wednesday, Nov. 11, 2020. (AP Photo/Patrick Semansky)

President Donald Trump plays a round of Golf at the Trump National Golf Club in Sterling Va., Sunday Nov. 8, 2020. (AP Photo/Steve Helber)

President Donald Trump speaks at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump waves to supporters as he departs after playing golf at the Trump National Golf Club in Sterling Va., Sunday Nov. 8, 2020. (AP Photo/Steve Helber)

President Donald Trump speaks at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump arrives at the White House after golfing Saturday, Nov. 7, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump walks away after speaking at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump, center standing, as he participates in a round of golf at the Trump National Golf Course on Saturday, Nov. 7, 2020, in Sterling, Va. (AP Photo/Patrick Semansky)

President Donald Trump leaves the podium after speaking at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump participates in a round of golf at the Trump National Golf Course on Saturday, Nov. 7, 2020, in Sterling, Va. (AP Photo/Patrick Semansky)

President Donald Trump speaks in the East Room of the White House, early Wednesday, Nov. 4, 2020, in Washington. (AP Photo/Evan Vucci)

STERLING, VA – NOVEMBER 07: U.S. President Donald Trump golfs at Trump National Golf Club, on November 7, 2020 in Sterling, Virginia. News outlets projected that Democratic nominee Joe Biden will be the 46th president of the United States after a victory in Pennsylvania. (Photo by Al Drago/Getty Images)

President Donald Trump walks away after speaking at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump speaks at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump plays a round of Golf at the Trump National Golf Club in Sterling Va., Sunday Nov. 8, 2020. (AP Photo/Steve Helber)

President Donald Trump speaks at the White House, Thursday, Nov. 5, 2020, in Washington. (AP Photo/Evan Vucci)

President Donald Trump speaks in the East Room of the White House, early Wednesday, Nov. 4, 2020, in Washington. (AP Photo/Evan Vucci)

US President Donald Trump watches from the motorcade as he returns to the White House in Washington, DC, after playing golf on November 7, 2020. – Joyous celebrations erupted in Washington on Saturday after Joe Biden was declared winner of the US presidency, as several people poured into the streets of the US capital — some of them chanting, cheering and singing in front of the White House. (Photo by ALEX EDELMAN / AFP) (Photo by ALEX EDELMAN/AFP via Getty Images)

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Under the proposed legislation brought to Trump’s desk, single people earning up to $ 75,000 will receive a check of $ 600. Married couples bringing in $ 150,000 will get a check of $ 1,200. Both amounts are half of what was paid out directly to folks in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The bill also includes $ 1.4 trillion in funding to keep the government open.

Stocks surprisingly shrugged off Trump’s bluster. The Dow Jones Industrial Average, S&P 500 and Nasdaq were all solidly in the green by afternoon trading Wednesday.

But investors shouldn’t be lulled into complacency on the stimulus issue. Absent Trump’s signature, the government could risk another shutdown and households would continue to grapple with the financial fallout of the COVID-19 pandemic. That would arguably create the condition for the “tailspin” suggested by EvercoreISI’s DeBusschere.

“This is one of the more interesting things I have seen in my career. We would be going into recession by choice. This is something that the political actors in Washington have the power to prevent. And they should act to present it,” RSM US LLP Chief economist Joe Brusuelas told Yahoo Finance Live. “If they don’t and this just continues well into January and nothing gets done, we are likely to see a double-dip recession. That still create conditions that will delay recovery and create an expansion that’s weaker than it otherwise has to be.”

By most recent economic measures, relief from the government is needed now more than ever as the pandemic rages on and wreaks havoc.

New homes sales tanked 11% in November, the Census Bureau reported Wednesday. The Commerce Department reported Wednesday consumer spending fell in November for the first time since April. On Tuesday, the Conference Board said its closely watched consumer confidence index dropped to 88.6 in December from a downwardly revised 92.9% in November.

“This is not stimulus,” Brusuelas argues. “This is direct aid to the American people who are in need of it during this holiday season.”

Dust off your pen, Trump.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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