Over the weekend, the markets received another chunk of dough in the form of extended unemployment benefits, a payroll tax holiday, an eviction moratorium extension, and additional student loan payment deferment.
In anticipation, the markets charged higher with the confidence that more juice was on the way. For the week, the Dow rose 3.88%, the S&P 500 2.49%, the Nasdaq Composite 2.51% and the Russell 2000 6.03%. International stocks also rose with developed market stocks up 1.96% and Emerging Markets up 1%.
Congress Simply Couldn’t Agree (Shocking!)
Instead of attempting to reach a temporary agreement to help people who have been adversely impacted, both sides walked out with the typical finger pointing. I can only imagine the spin we’ll hear this week. Not that you need reminding, however this is an election year!!
President Trump took matters into his own hands by issuing Memorandums instead of waiting for Congress. Unemployment benefits are now extended to December 6, 2020 with the addition of $400 per week instead of the $600 that just expired.
Student loan payments can now be deferred until December 31, 2020 and you can’t be evicted from your residence for the time being.
If you earn less than $4000 on a bi-weekly basis your payroll taxes are being deferred for the balance of 2020, with the promise that if President Trump is re-elected, they will be forgiven.
You probably know where I stand. I favor continued unemployment benefits without additional compensation. I’m certainly OK with the eviction moratorium and deferring student loan payments ONLY if you are unemployed. In no way shape or form, do I believe that any payroll tax holiday is necessary at this time. If you’re working and making the same income you’re probably spending less money because of our social restrictions.
It doesn’t matter what I believe, only what the markets believe…. I do expect the markets to continue higher for a while, however not at the same warp speed, and with a few speed bumps. Technology has certainly led the markets, and I continue to believe new and continuous improving technological advances will do the same.
As the economy reopens, the parts of the market that have not nearly recovered, such as industrials, financials and energy could move noticeably higher. For August so far, these sectors have out-gained technology, however way too soon to call a change in leadership.
Schools and Cold Weather
We’re only a few weeks away from Grammar Schools, High Schools and Colleges reopening, offering in-person or virtual learning. The results of this process will certainly be watched closely, as a lot of money is typically spent during this time which is economically important.
Not to mention the importance of education is paramount to our future.
I also wonder what will happen if our restaurant situation doesn’t change when the weather turns colder. Hey, the election is less than 90 days away and the weather change probably won’t be that far behind. I don’t plan on dining outside in 0 degree weather.
For me personally, I certainly miss the typical way of dining, although we’re making do. I absolutely miss starting my days at Kennedy Fitness in Mount Laurel as those relationships are priceless. Working out at home is fine, however I miss the motivation and accountability.
So when will we be back to “normal” or will we? Will we actually get a true distributable vaccine sooner than later? I don’t know the answers, however certainly pondering the potential outcomes!!