Insights + Resources

Market Update: Thursday March 26, 2020

Mar 26, 2020

Market Update
Market Update

Sell the news. Stocks reversed earlier losses this morning and traded higher this morning after the Senate approved the roughly $2 trillion fiscal stimulus package and markets digested the unprecedented surge in weekly jobless claims. Wednesday’s gains marked the first two-day win streak for the S&P 500 Index in more than a month, after tying its longest streak without back-to-back up days since WWII. Stocks held up relatively well immediately after the historic weekly jobless claims report was released today at 8:30 a.m. ET, further evidence that a recession had already been priced into markets.

New jobless claims rise almost unimaginably. We knew the disruptions from the COVID-19 pandemic would be massive, but what it has meant to everyday workers finally came through in the numbers. Roughly 3.3 million people filed new claims for unemployment benefits in the week ending March 21, almost five times the previous high of 695,000 set in 1982. The number, while well beyond economists’ consensus forecast, is not a complete surprise, and markets have already been slowly pricing it in. Jobs are likely to return quickly once the economy gets going again, but we know the timing of that is uncertain. Until then, backstops from federal programs and support for businesses to help minimize further layoffs will be essential for millions of Americans. We discuss this more in today’s blog post.

Fiscal stimulus gets through the Senate. The roughly $2 trillion fiscal stimulus package has been approved by the Senate, and now the bill goes to the House, where it is expected to pass on Friday and be signed by President Trump shortly thereafter. Coming as the ranks of the jobless surge, the package will help cushion the economic and financial blow from the COVID-19 pandemic. This news allowed us to check off the policy response signal (#5) in our Road to Recovery Playbook. Importantly, this isn’t the end of the support, as another more targeted package will likely be necessary, and the Federal Reserve may have more in its arsenal, as Chair Jerome Powell noted this morning in a televised interview.

Tags: , ,

More Insights

Jul 10, 2020

With the economy and financial markets flashing mixed signals, it’s no wonder that lawmakers are deadlocked on whether to pass a Phase 4 of the CARES Act.

Jul 8, 2020

As states cautiously begin the process of relaxing their COVID-19 restrictions, some are wondering, “Why is the stock market doing so well when the economy is doing so poorly?” Ever heard of economic indicators?

Jul 6, 2020

Your car insurance premium is based on more than your driving history. The amount you pay for auto insurance is determined by a complicated algorithm that takes many factors into consideration. Your driving history is just one variable used to calculate your rate. Read on to learn more about what auto insurance carriers look at … Continue reading “What Determines Car Insurance Rates?”

Jul 3, 2020

As Americans adjust their spending habits in a rapidly changing economy, they are building cash reserves at an unprecedented rate. The Bureau of Economic Analysis reported on May 29th that the personal savings rate hit a historic 33% in April. To put that into perspective, it’s the highest number since the Bureau started tracking personal … Continue reading “An Unprecedented Rush to Cash”

Jul 1, 2020

The Fourth of July holiday will be very different this year. Although it’s a time to enjoy family and friends, and maybe even watch some fireworks, social distancing and a new wave of COVID-19 cases also may take a seat at the picnic table. We all continue to believe our doctors and medical community will … Continue reading “Fourth of July Optimism”

Insights + Resources >