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.
The news keeps getting better for Social Security recipients. It’s now projected that benefits will increase 6.1% in 2022, up from the 4.7% forecast just two months ago. That would be the most significant increase since 1983.1,2
Inheriting wealth can be a burden and a blessing. Even if you have an inclination that a family member may remember you in their last will and testament, there are many facets to the process of inheritance that you may not have considered. Here are some things you may want to keep in mind if … Continue reading “Coping with an Inheritance”
It’s long been an aspirational target for entrepreneurs. It literally goes beyond “blue sky,” in terms of location, to a place no business has gone before: Outer Space! The name of the game is commercial space travel.
With all the attention given to inflation, stock prices, and job reports, it’s been easy to overlook the remarkable move in the bond market during the past few months as bond yields have fallen. The yield on the 10-year treasury closed at 1.37% on Friday, July 9, down from its 2021 high of 1.74% in … Continue reading “The Quiet Fall in Bond Yields”
On July 6, oil prices reached a six-year high of $76.98 a barrel. This benchmark came as the Organization of the Petroleum Exporting Countries (OPEC) and allies failed to reach an agreement regarding an increase in production.1 This rise in cost follows a year in which OPEC and allies cut production amidst the COVID-19 pandemic. … Continue reading “Oil Prices Hit Six-Year High”
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