Pricing the future and stimulus update
Market update
US stocks participated in a surprising quick recovery soon after what was thought to be the beginning of a major destabilization. Part in thanks to a massive infusion of Federal Reserve stimulus, the market has already priced in the recovery from the Coronavirus. But are they right?
Technology stocks recovered the quickest, while energy, financials, and real estate still lag far behind. If you’re in a diversified portfolio, you’ll likely not feel the full effects of the market recovery as the most widely used indicator, the S&P 500 is 20% in tech.
Choppy waters are expected to continue in the near-future as investors go to battle over price. Volatility will likely pick up should a second wave of Covid-19 exposures hit unexpectedly. Additionally, the meltdown of US-China relations would mean a glut on the supply chain and another hit to consumer demand.
As we continue to navigate through uncharted territory, it’s prudent to remain focus on long-term goals, update your financial plan annually, and confirm your tolerance for risk. If you are feeling nervous or otherwise concerned about your portfolio, please book a meeting with me here.
Stimulus update
After the first round of IRS stimulus checks is nearing completion, the U.S. House is negotiating a second round of checks for slightly higher amounts^1. Also, another bill is in the works, the “Heros Act,” proposing ongoing monthly stipends of $2,000 for any individual earning less than $120,000/yr.^2 It’s likely that Republicans will counter with a lower amount.
The Paycheck Protection Program (PPP) is still accepting applications from business owners. You may receive 2.5x of total salary expense, including the amount that you pay yourself or that of employees. Apply through your bank or go through kabbage.com.
For a list of additional resources for businesses and non-profits, see https://www.finder.com/business-loans-coronavirus
If you’re an employee or self-employed and are out of work due to Covid-19, you may apply for unemployment benefits through your state. You could receive the state weekly benefit of $450/week plus an additional federal amount of $600/week.
At Eureka Wealth Management, I’ll help you navigate through these rough waters by identifying your tolerance for risk and help you prepare for the unexpected. To schedule an initial consultation, please call (760) 537-0791 or book a meeting at eurekawealthmanagement.com.
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