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Starbucks Stock Is Rising as $2 Trillion Economic-Rescue Package Nears Approval

By John Rosevear - Mar 25, 2020 at 2:19PM

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A quick post-virus economic recovery seems more likely now.

What happened

Shares of Starbucks (SBUX 3.87%) were moving higher on Wednesday, up 4.6% as of 3 p.m. EDT, amid a broad-based market rally as U.S. lawmakers appeared to be closing in on a $2 trillion economic-rescue package. 

So what

Starbucks is one of many companies that stands to benefit indirectly from the $2 trillion package that was nearing approval in Congress on Wednesday. By providing relief for many individuals and businesses in the near term, the economic-rescue package aims to help the economy recover quickly after the coronavirus pandemic fades -- avoiding a prolonged, deep recession.

3 cold-drink cups with Starbucks logos.

Image source: Starbucks.

The likely success of the package helped boost many stocks. Starbucks' shares rallied on Tuesday after CEO Kevin Johnson said the company is applying lessons learned in China to help its stores in North America weather the storm.

Now what

Johnson has assured investors that Starbucks's balance sheet is in good shape and that it should have no trouble weathering a period of sharply reduced revenue. The company's stores in the U.S. and Canada have moved to a "takeout-only" model, removing seating, and the company has boosted sick-time and other benefits for its workers.

It'll be a while before we can start to see how the post-pandemic economy is likely to shape up. But Starbucks has made the right moves to weather the current storm -- and to prepare for what could lie ahead. 

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