On The Money: Stocks close with steep losses driven by coronavirus fears | Tax season could bring more refund confusion | Trump's new wins for farmers may not undo trade damage

On The Money: Stocks close with steep losses driven by coronavirus fears | Tax season could bring more refund confusion | Trump's new wins for farmers may not undo trade damage
© Getty

Happy Monday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

Write us with tips, suggestions and news: slane@thehill.com, njagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane, @NJagoda and @NivElis.

ADVERTISEMENT

 

THE BIG DEAL--Stocks close with steep losses driven by coronavirus fears: Stocks fell sharply Monday as the international scramble to contain the coronavirus raises fears of a harsh economic blowback.

  • The Dow Jones Industrial Average closed with a loss of 453 points, falling 1.6 percent to reverse its 2020 gains. The S&P 500 index also fell 1.6 percent, while the Nasdaq Composite sunk 1.9 percent.
  • Stocks for airlines, travel companies, cruises, resorts and casinos all fell between 2 percent and 8 percent.

 

What happened: Monday's losses followed a sharp rise in confirmed diagnoses of the lethal coronavirus, a respiratory illness that originated in central China and has spread to more than 2,700 cases in China, killing 81.

The Centers for Disease Control and Prevention (CDC) confirmed five cases of coronavirus in the U.S. by Sunday, and announced Monday that it was monitoring 110 people in 26 states for potentially contracting the illness.

 

ADVERTISEMENT

The risks ahead: A prolonged outbreak in China could dampen the country's already slowing economy, a key driver of global growth, as the world braces for a sluggish 2020. A rapid increase in cases reported beyond China could drive even broader declines in economic activity, according to experts. 

"If the epidemic spreads globally, or if the number of deaths rises sharply, the knock-on impact on the global economy could be high, especially if international air travel is severely disrupted as a result of the epidemic," wrote Agathe Demarais, global forecasting director at The Economist Intelligence Unit, in a Monday research note.

 

ON TAP TOMORROW

 

LEADING THE DAY

Trump's latest wins for farmers may not undo trade damage: President TrumpDonald John TrumpWhere do we go from here? Conservation can show the way Gov. Ron DeSantis more popular in Florida than Trump Sotomayor accuses Supreme Court of bias in favor of Trump administration MORE's new water rule cements a campaign promise to farmers to reverse a controversial Obama-era policy, but it may not be enough to win over an agricultural industry that has seen markets evaporate under his trade wars.

In the past two weeks, Trump has delivered some of his biggest wins for farmers, shepherding through an initial trade deal with China that would boost agricultural purchases, securing the passage of a new agreement with Canada and Mexico, and on Thursday, offering his replacement for Obama's Waters of the United States (WOTUS) rule that was near universally-despised by farmers.

But Trump's efforts to woo farmers who say they are undecided for 2020 may come up short, as a new water policy will do little to counter the financial hits agricultural producers have taken from tariffs. The Hill's Rebecca Beitsch tells us why.

 

Trouble in farm country: Disappearing markets in China have left stockpiles of soybeans. Oil policies and trade wars have diminished the market for corn-based ethanol. And extreme weather has made it a tough year for farming in the Midwest. 

  • "There's been a lot of grumbling. It's all going to depend on who the candidate is that he'll be facing this fall, but I've got to think that there are a good chunk of farmers that supported him this time are going to be bailing this fall," said Tim Dufault, a self-described "radical moderate" who grows wheat and soybeans on his fourth-generation family farm in Crookston, Minn.
  • "We haven't had a lot of good news in farm country, and we needed some wins, and now we've had three in a row," said Shayne Isane, a farmer with 5,000 acres outside Badger, Minn.
  • "There just is no financial recovery so far," said Tim Burrack, a farmer Arlington, Iowa who estimates he's lost $265,000 to various Trump policies.

 

Tax season could bring more refund confusion: The second tax filing season under President Trump's tax law kicked off on Monday, and much of the attention will be on tax refunds, a source of frustration for many taxpayers last year.

Reports of people unexpectedly owing the IRS instead of receiving refunds, and taxpayer uncertainty over how they were going to be impacted by the Trump law, led tax preparers to report increased anxiety from their clients during last year's filing season.

The tax world is hoping to avoid a repeat of that this filing season and the IRS has undertaken efforts to help prevent taxpayers from getting unpleasantly surprised over their refund.

But how the new season plays out could largely depend on the extent to which people who were unhappy last year adjusted the amount of taxes withheld from their paychecks. The Hill's Naomi Jagoda explains.

 

GOOD TO KNOW

 

ODDS AND ENDS

  • More than half of the areas around the world able to grow grapes used for wine could become unsuitable for the purpose in 80 years due to climate change, according to a new study.
  • An ally of Venezuelan President Nicolás Maduro hired a lobbyist with connections to President Trump as part of the country's efforts to ease sanctions and build bilateral relations with the U.S., the Associated Press reported Monday.