Stocks pared overnight losses after Fed goes “all in” again. Stocks reversed big losses overnight in the futures market after initial disappointment that policymakers in Washington, DC, could not reach an agreement on a stimulus deal on Sunday night was followed by more central bank support.
The Senate proposal is reportedly in the $1.5 trillion range in size and our sources in Washington suggest passage today is very likely, despite several members of the Senate being in quarantine and one, Senator Rand Paul of Kentucky, having contracted the illness. The agreement, combined with the Federal Reserve’s (Fed) shock and awe response this morning (more below) will help cushion the blow of the oncoming recession.Many jobs will unfortunately be lost during this crisis, but these efforts may save some.
Fiscal policy bazooka is on the way. We don’t know the specifics of the package, but we do know it will represent roughly 6% of US gross domestic product and will include direct payments and tax relief for consumers and a substantial lending facility backed by the US Treasury to help cushion the blow for impacted businesses. The failure of the Senate’s procedural vote followed the typical path of these negotiations and may lead to more compromises today, including more worker protection clauses and more restrictions on loans initiated by the Treasury. We will discuss today on the LPL Research blog.
Fed not out of ammunition just yet. The Fed this morning announced open-ended asset purchases in a historic aggressive attempt to mitigate disruptions in financial markets and re-establish free flow of credit to consumers, businesses, and state and local governments. The first piece of today’s new policy response from the Fed, essentially “QE infinity,” will enable the central bank to buy as many securities as needed to stabilize those markets. The next phase, which will accompany the stimulus working its way through Congress, will provide a Main Street lending facility to help preserve as many jobs as possible over the next 60 to 90 days as the crisis plays out.
What is a circuit breaker? Multiple times over the past two weeks investors have been greeted with something they haven’t seen in years, a circuit breaker. In the simplest since, this is a pause in trading after a significant drop in the stock market. We examine this new development more in detail Circuit Breakers Explained.
When you lose a spouse, partner, or parent, the grief can be overwhelming. In the midst of that grief, life goes on. There are arrangements to be made, things to be taken care of – and in recognition of this reality, here is a checklist that you may find useful at such a time. If … Continue reading “Estate Planning Checklist for When a Spouse or Parent Passes”
The first week of 2021 has already had many ups and downs. Just because it’s a new year doesn’t mean that the 2020 issues go away, and so far, 2021 has been no exception to this rule. The markets opened on January 4 and traded lower out of the gate, with the S&P 500 dropping … Continue reading “2021 Opens With a Bang”
A new year offers a welcomed turn of the calendar and a fresh start. However, it’s difficult to put 2020 completely behind us just yet because the COVID-19 pandemic still presents a significant threat. Healthcare workers continue to perform heroically, while the rest of us must continue to make sacrifices until vaccines are widely distributed. … Continue reading “Market Update: 2021 Brings a Fresh Start”
After a bit of political posturing on stimulus details in December, the $900 billion Consolidated Appropriations Act of 2021 (2021 CAA) was signed into law by President Trump as the COVID-19 pandemic continues to impact employers and employees. Here’s a quick recap of five key highlights providing stimulus to those that need it:
Financially, many of us associate April with taxes – but we should also associate April with important IRA deadlines. From current and previous IRA contribution deadlines, to RMD deadlines, keep an eye on the calendar. April 15, 2021 is the deadline to take your Required Minimum Distribution (RMD) from certain individual retirement accounts. Keep in … Continue reading “IRA Contribution Deadlines are Approaching”
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