Blog

As you know, the coronavirus pandemic has created both a health crisis and an economic crisis. As of this writing, there are over 160,000 known cases.[1] By the time you read this, there will certainly be more - and that number does not reflect those who have been infected but not tested. The economic cost, meanwhile, has resulted in millions of Americans losing their jobs. Some economists at the Federal Reserve estimate the unemployment rate could rise as high as 32%![2]

The long-awaited Coronavirus Aid, Relief and Economic Security (CARES) Act was passed, totaling $2.2 trillion in its final form.

By buying large amounts of some debt (treasuries and agency mortgages, primarily, but also targeted purchases in other segments), the Fed has agreed to become a natural source of promised or actual demand where there otherwise might not be any.

Economic news for the week was largely focused on dramatic actions from Congress and the Federal Reserve, intended to stem damage from the coronavirus-related shutdowns that have just begun. Other released data from months prior to the virus outbreak is now largely considered ‘stale’, but included mixed results for new home sales and durable goods orders.

After losing ground in 2018, U.S. stocks had a banner year in 2019, with the S&P 500 gaining almost 29% — the highest annual increase since 2013.[1] It's too early to know how 2020 will turn out, but it's been rocky so far, and you can count on market swings to challenge your patience as an investor.

RMDs waived for 2020; 10% Early Distribution Penalty waived up to certain amounts; Plan Loan Rules relaxed

Economic news last week was largely dwarfed by the dramatic efforts in progress by Congress and the Federal Reserve to stem the tide of economic and financial market damage from coronavirus-related shutdowns. Other released data included weaker retail sales and manufacturing indexes, while housing data exceeded expectations.

On March 20, 2020, the Department of Education announced terms for student loan relief for tens of millions of borrowers in response to COVID-19. Here are answers to some questions about the new rules.

These are difficult times, not only from an economic and investment standpoint, but a community one as well. This societal strains and uncertainty over depth and time-frame of the current pandemic add to the volatility in financial assets. Keep in mind, though, as we’ve mentioned in prior notes, that these periodic shocks are far from abnormal. In fact, they’re healthy checks on risk-taking, and allow a reset of expectations and re-pricing of risk.

As is the case in every bear market, it’s the elusive question that everyone is seeking a precise answer to. Sharp market declines and volatility are built around uncertainty, whether it be in the financial system (e.g. 2008), terrorist events (2001), commodity price shocks (1970s), wars, or other surprises.

No doubt the market gyrations of the last several weeks have rattled the nerves of many investors. After markets bounced around the -20% and -25% levels from the peak in February, now touching -30%, a question we've been asked several times is: 'How and when does this end?'