September is historically a gloomier month for the markets, and this year was no exception. However, our report today includes some good news (consumer confidence) and a list of where you can travel if you are ready to get away! First, let’s start with the latest Covid-19 news.
President Trump has tested positive for coronavirus. He and First Lady Melania Trump are in isolation, showing some symptoms but remaining on the job. (New York Times) Meanwhile, more than 200,000 Americans have lost their lives to Covid-19 this year. (Statista) According to the CDC, as of September 27, cases were trending upward in 26 states, especially in the west and central parts of the country. They advise wearing a mask, washing your hands, and staying six feet from others. (CDC.gov)
Pandemic kick-starts tech disruption and corporate social policies. While foremost a human tragedy, the pandemic is also reshaping business, society, and investing and retirement. A digital transformation has unfolded in the short time since the virus catapulted into the mainstream in March. Tech disruptions are likely to happen even faster in a post-Covid-19 world. In addition, companies are focusing on safety and wellness programs, integrating social policies as a new ‘business critical’ action. (Fidelity)
Stimulus update: House Speaker Pelosi and Treasury Secretary Mnuchin are “coming to terms” on key testing and tracing provisions in the next round of federal coronavirus aid. On Thursday evening, the House passed a $2.2 trillion coronavirus relief bill, but the bill is unlikely to get a vote in the Senate. If it doesn’t, a stimulus bill may not be passed until after the election.
National debt will top 100% of GDP at some point next year, a level the country last hit in the rebuilding years following World War II. (Fortune) Projections show debt-to-GDP will hit 200% by 2050, as the chart here shows:
Market update & key economic indicators
The S&P 500 lost almost 4% in September but is still positive for the third quarter and the year. Bonds gained slightly. We recognize elections bring uncertainty and many of our clients are expressing anxiety, however, we encourage everyone to remember that elections have little long-term bearing on market performance.
Consumer confidence posted a solid gain in September to 101.8, up from 86.3 in August. This indicates that the consumer thinks the worst days of the recession are over. Consumer spending accounts for 70% of economic activity in the US.
Purchasing declined in September. The August Purchasing Managers Index (PMI) declined to 54.6 from 56.0 in the previous month, driven by a constraint in supplier deliveries, inventories and imports. (Jill Mislinski)
The economy added 661,000 new jobs in September, less than the expected 859,000 jobs. In addition, the number of long-term unemployed people (out of work for at least 27 weeks, when state benefits traditionally expire) and the number of people who have lost jobs permanently have both grown, tightening the focus on the need for Congress to provide additional stimulus or benefits to avoid a long, dark winter. (Forbes) The chart below shows the last ten years of jobs data, with the shaded area indicating recessions.
Finish your refinance before December. Union Savings Bank (in the Midwest) will begin applying the Fannie Mae/Freddie Mac 0.5% adverse market fee to all refinances starting in December. Total costs for a refinance with Union Savings are $350 with 740+ credit and 25% equity. Thirty-year mortgages for new customers are 3.00%. Outside of the Midwest, check with your local banks to see if the new fee is in place yet.
Fly the Friendly Skies? United Airlines will offer Covid-19 tests to Hawaii-bound passengers in San Francisco starting October 15, so passengers can avoid the 14-day quarantine there. United may expand testing to other airports.
- Here is where you can go without restrictions: Albania, Belarus, Brazil, Dominican Republic, Mexico, North Macedonia, Serbia, Turkey and Zambia.
- With restrictions (mostly either a negative Covid-19 test required OR quarantine period): Antigua, Barbuda, Armenia, Aruba, Bahamas, Bangladesh, Bermuda, Cambodia, Costa Rica, Croatia, Ecuador, Egypt, Ethiopia, Ghana, Haiti, Ireland, Kenya, South Korea, UK and more.
- See the full list here CNN.com/travel.