Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Illustration: Sarah Grillo/Axios
Big Tech was buoyed by the exact thing that prevented the dreadful GDP report from being even worse in the second quarter: the pandemic stimulus measures.
Why it matters: The stimulus is in the spotlight as its key expanded unemployment benefits provision is set to lapse despite coronavirus cases surging across the country, reimposed lockdown measures and more businesses shuttering.
What's happening: Personal income soared by a staggering 7.3% in the second quarter from the prior three months — a phenomenon that doesn't typically happen in the middle of a recession.
- It was made possible by measures like the extra $600 in weekly unemployment benefits and the one-time stimulus checks, which made up for the collapse in wages.
- Strip out government support programs and personal income fell 6.1%.
The big picture: Big Tech executives, whose companies have become a symbol for the deep divide between the soaring stock market and the downward spiraling economy, touted these stimulus measures as a reason why their businesses thrived in the second quarter.
- What they're saying: The increase in demand for Apple products came down to a range of factors — including economic stimulus in the U.S, Apple CEO Tim Cook said during an analyst call on Thursday.
Worth noting: As the pandemic raged, these companies have come to represent a whopping 22% of the S&P 500.
- Their combined market value jumped by $250 billion in late trading after their earnings were released, giving these companies a bigger hold on the stock market.
- It's also a win for traders who have bet these so-far Teflon-protected companies would come out even bigger in the midst of the economic collapse caused by the pandemic.
Yes, but: Big Tech companies, along with others, are expressing concerns about what happens to the economy — and their business — after the stimulus runs dry.
- "We don’t know what the subsequent economic stimulus will look like. And to the extent that stimulus decreases in the future and recession lingers, that could impact consumer purchasing power for advertisers in areas like e-commerce," Facebook CFO Dave Wehner said on the company's analyst call.
Driving the news: The enhanced employment benefits millions of Americans are relying on will lapse.
- The Senate adjourned until next week, without a deal to extend the benefits (or even replace them with an alternative amount).
- There's also little progress on negotiations so far on a broader, supplemental stimulus package.
The bottom line: Hopes for a swift economic rebound are being downgraded, with analysts paring back estimates for Q3 growth as additional stimulus hangs in limbo.