Market gives up some gains into the weekend. Following the historic run over the past three days, US equities are lower in early trading Friday. The United States now has more confirmed cases of COVID-19 than China, though far fewer deaths. The stimulus package is expected to pass through the House of Representatives today before heading to the White House for President Trump’s signature, though if any lawmaker objects to the special “voice vote,” a delay remains a possibility.
Will investors take weaker economic news in stride? Earlier this week, the IHS Markit Flash U.S. PMI Composite™ for March 2020 reached an all-time series low, with manufacturing and services being hindered by COVID-19 and social distancing. In our Road to Recovery Playbook, we have a factor that emphasizes whether or not there is visibility into the probability and severity of a US recession. We believe this particular economic release certainly points toward recession, but importantly, we believe that was already the expectation of most investors. In fact, on the day of this economic release, the S&P 500 Index rallied nearly 10% as investors increasingly believed Congress would pass a massive fiscal stimulus package. For more details read today’s LPL Research blog.
A bull market? The Dow gained more than 20% from the recent lows in a record three days. Many in the media have dubbed this a new bull market. At this time, the market is in the process of forming a bottom, but we’d be very careful to call this a new bull market as large bounces tend to happen, even in bear markets.
Could yields actually rise after the Fed’s bazooka? With the major stock market indexes all entering a bear market this month, it’s no surprise that stocks have stolen most of the spotlight. However, actions taken by the Federal Reserve (Fed) to support what may be considered the safest part of the bond market, US Treasuries, may actually have more lasting implications for investors’ portfolios. We look at where Treasury yields might be headed following unprecedented moves by the Fed over the past week in today’s Blog.
Financially speaking, retirement might differ from your expectations. Just as few weathercasters can accurately predict a month’s worth of temperatures and storms, few retirees find their financial futures playing out as precisely as they assumed. Because of this, some common financial assumptions (and anxieties) about retirement are worth examining.
Information vs. instinct. When it comes to investment choices, many people believe they have a “knack” for choosing good investments. But what exactly is that “knack” based on? The fact is, the choices we make with our assets can be strongly influenced by factors, many of them emotional, that we may not even be aware … Continue reading “Making Investment Choices”
In corporate America, pension plans are fading away. Only 16% of Fortune 500 companies offered them to full-time employees in 2018, according to Willis Towers Watson research. In contrast, legal, medical, accounting, and engineering firms are keeping the spirit of the traditional pension plan alive by adopting cash balance plans.1
I’d like for you to meet my friend, Hugh. He’s a retired film stuntman who, after a long career, is enjoying his retirement. Some of what he’s enjoying about his retirement is sharing part of his accumulated wealth with his family, specifically his wife and two sons. Like many Americans, Hugh likes to make sure … Continue reading “The Gift Tax”
“Never confuse a single defeat with a final defeat.” — F. Scott Fitzgerald The economic struggles in our country are among the worst we’ve ever seen. In April, a record 20 million people lost their jobs, and 36 million people have filed for unemployment since the COVID-19 pandemic struck in mid-March. Record drops in consumer … Continue reading “Better Times Are Coming”
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