Tag: Current Events

CARES Act and Coronavirus Relief

Apr 2, 2020

Law hammer gavel CARE Act Book
Here are a few ways the government is alleviating the hit to retirement accounts

From Our Partners at PAI: The CARES (Coronavirus Aid, Relief, and Economic Security) Act has been a topic of discussion for weeks as legislators discussed the best way to give Americans a much-needed boost as the economy has faltered due to the Coronavirus. Signed into law in late March, there are several provisions that will help students, workers, and retirement plan participants to maintain more financial stability during this challenging time.

 

CARES Act changes retirement plan provisions for loans and tax-advantaged withdrawals

Retirees and workers alike have likely been groaning when looking at stock values over the last several weeks. While it takes some time for market volatility to level out, these provisions included in the CARES Act may provide retirement plan participants with additional flexibility and more options for loans and penalty-free withdrawals during this stressful time.

PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS

Workers who are experiencing financial difficulty due to the effects of COVID-19 on their careers, health, and overall financial wellness will be able to take a penalty-free distribution from a retirement account, like a 401(k) or IRA, between January 1, 2020, and December 31, 2020.

Under normal circumstances, there is a 10 percent penalty tax added to the taxes paid on distributions from a retirement plan before a participant reaches age 59 1/2. However, the CARES Act includes a provision that allows eligible participants to take up to a $100,000 distribution from a retirement account without the addition of the 10 percent tax that normally accompanies an early withdrawal. This tax-favored withdrawal may be repaid to an eligible retirement plan within three years of taking the distribution, with the option to repay beyond the normal annual contribution limits.

Eligible participants for a coronavirus-related distribution are those who have been diagnosed with the virus (or have a spouse or dependent diagnosed), experience adverse financial consequences as a result of being quarantined, unable to work, laid off, or those who had work hours reduced due to the virus.

TEMPORARILY INCREASED LIMIT ON RETIREMENT PLAN LOANS

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Road to Recovery: COVID-19 Case Update

Apr 1, 2020

long road to recovery from COVID-19
Investors have historically been rewarded for investing during these crisis events, and we believe the time for suitable investors to consider adding some risk to their portfolios may be approaching

Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States.  At Epic Capital, we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the Chart of the Day, while the number of new cases in the United States has continued to climb, the number of new cases seen outside of the US has begun to drop in recent days. In fact, Italy, the worst-hit country in terms of total deaths from the virus, reported on Tuesday that new cases hit a two-week low. (more…)

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When Bear Markets Bounce

Mar 30, 2020

Stock Markets Bear Bull
The recent bounce has bulls feeling pretty good given how bad they felt just a week ago

The big equity bounce has continued, with the S&P 500 Index up more than 17% from the multi-year lows hit last Monday. The big question on many investors’ minds is could this be a bear market rally? After all, some of the most spectacular short-term bounces took place during bear markets. (more…)

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Will the Fed’s Bold Moves Keep Bond Yields Up?

Mar 27, 2020

Bond Yield Rates Increasing
It is logical to think that the incredibly bold moves from the Fed will help keep yields down.

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 and bond yields. (more…)

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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.

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Making Sense of Skyrocketing Jobless Claims

Mar 26, 2020

jobless layoff claims
The personal and economic disruptions represented by the latest new jobless claims number are staggering

Weekly new jobless claims were reported this morning, and to no one’s surprise they rose to levels thought unimaginable just a few weeks ago. As shown in the LPL Chart of the Day, 3.3 million people filed new claims for unemployment benefits in the week ending March 21, almost 5 times the previous high of 695,000 set in 1982. (more…)

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Market Update: Wednesday, March 25

Mar 25, 2020

Market Update
Market Update

DAILY INSIGHTS

Stocks trying to add to huge gains. Futures are indicating a flat to slightly positive open as stocks attempt to add to historic gains from Tuesday on optimism surrounding eventual passage of the fiscal stimulus plan in the Senate. The Dow had its fifth best day ever, up 11.4%, which ranked as its best day since March 1933. It is important to note, however, that the largest gains ever have tended to take place during bear markets, as volatility is heightened. Additionally, the S&P 500 Index hasn’t been up back-to-back days for 28 trading sessions, tying the longest streak since World War II. (more…)

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Market Volatility Stresses Liquidity

Mar 25, 2020

Market Water Volatility book ripples
Traditional safe havens such as US Treasuries, gold, or cash,have seen signs that liquidity has dried up.

The COVID-19 pandemic has caused unprecedented market volatility in recent weeks that has investors and traders scrambling to assess the economic and market impact of the aggressive containment measures. (more…)

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Market Update: Tuesday, March 24

Mar 24, 2020

Market Update
Market Update

Stimulus prospects help lift global markets. S&P 500 Index futures hit their “limit up” circuit breaker of 5% overnight following Monday’s losses while major Asian and European indexes posted gains. Extraordinary measures by the Federal Reserve (Fed) to backstop the economy and progress on an approximately $2 trillion fiscal stimulus package by Congress, along with oversold conditions, are the primary drivers of the bounce. While most of the conditions for a durable rebound that we have outlined in our Road to Recovery Playbook have been met, uncertainty remains high, and we know historically that bottoming has been a process. (more…)

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How Markets Bottom

Mar 24, 2020

Stock Market Bottom
Nobody knows exactly how this market bottom will play out.

With US equities firmly in a bear market, even the most long-term investors are now looking ahead to when the selling may stop and where the S&P 500 Index might ultimately bottom. “Nobody knows exactly how this market bottom will play out,” said LPL Financial Senior Market Strategist Ryan Detrick. “However, using history as guide, we know markets tend to retest or even slightly break previous lows.” (more…)

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More Insights

Apr 3, 2020

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, reach for a bucket.” —Warren Buffett

Apr 2, 2020

From Our Partners at PAI: The CARES (Coronavirus Aid, Relief, and Economic Security) Act has been a topic of discussion for weeks as legislators discussed the best way to give Americans a much-needed boost as the economy has faltered due to the Coronavirus. Signed into law in late March, there are several provisions that will … Continue reading “CARES Act and Coronavirus Relief”

Apr 1, 2020

Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States.  At Epic Capital, we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the Chart of the Day, while the number of new … Continue reading “Road to Recovery: COVID-19 Case Update”

Mar 30, 2020

The big equity bounce has continued, with the S&P 500 Index up more than 17% from the multi-year lows hit last Monday. The big question on many investors’ minds is could this be a bear market rally? After all, some of the most spectacular short-term bounces took place during bear markets.

Mar 27, 2020

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 … Continue reading “Market Update: Friday March 27, 2020”

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