Dear CP client,
Happy Friday! We hope everyone had a great week and experienced some of the improving spring weather across the country.
We’re outlining this week’s market update from the two different sides of the situation: promising and concerning. Just as economic activity started slowing even before states adopted lockdowns, activity is now recovering a little before those orders are lifted. There remains a long road ahead of us before things return to normal. Much of the damage occurred quickly, but it will take more time to get the virus under control and consumers confidently spending again.
- Congress passed another $484 billion coronavirus aid package. The measure would replenish funding to the Paycheck Protection Program for small businesses and provide funding for hospitals and virus testing. It’s the fourth coronavirus-related spending measure since early March, totaling almost $3 trillion.
- This week's data showed the first sequential increase in mortgage-purchase applications since the shutdowns began.
- This is the second week in a row of improving sentiment among home builders.
- Following economic shutdown, it could be argued that industries have nowhere to go but up.
Concerning News (or Is This Over Yet?)
Stock markets move on suggestions of hope for cures, resulting in some wild swings over the past two months. Investors are struggling to set prices for where corporate profits and the economy will be months into the future.
- 1 in 6 workers have now lost a job. That’s more than 26 million jobs lost over the past five weeks, more than the employment gains since the Great Recession.
- Mortgage bailouts increased by 9% in the last week alone. These forbearances represent $754 billion in unpaid principal.
- U.S. consumer sentiment index fell for a third straight month (from 89.1 in March to 71.8 in April) as people weigh the coronavirus pandemic and the possibility of an economic re-opening.
- Still searching for a remedy for COVID-19. There are no proven therapies to treat the disease, and both remdesivir and chloroquine have had disappointing test results.
- An historic crash in crude oil prices is driving U.S. shale into full-on retreat with operators halting new drilling and shutting old wells, moves that could cut output by 20% for the world’s biggest producer of oil and leave thousands of workers unemployed.
NEW NEWS on Economic Impact Payments: If you did not receive a direct deposit refund with your most recent tax return, then you must update your bank information to get a direct deposit of the stimulus. The IRS Get My Payment site has been updated and will allow you to confirm your eligibility and enter your direct deposit bank information. For security purposes you will need to provide specific information from your tax return to verify your identity. To avoid stimulus payment scams be sure to use the official irs.gov/coronavirus site and never provide information in response to a call, text or email.
If your day feels longer, you’re not alone: The pandemic workday is proving to be 3 hours longer than it was before we all started working from home (Bloomberg). Constant use of digital communication (e.g. Zoom) can be exhausting and mental health remains a significant concern for everyone during this time.
We will continue to stay vigilant and do everything we can to keep everyone informed during these ever-changing times. We take pride in supporting our clients and protecting your wealth so that you can maintain confidence in the face of this pandemic. As always, we are available to answer questions and are happy to set up virtual meetings to cover any concerns that you might have. If there’s anything we can do, let us know.
We know that each of you has been managing the challenges of the pandemic in different ways, and we send our best to all of you and your families. Stay safe & well!
Carol & Tim and your Clear Perspectives team