Weekly Market Review: July 20, 2020

Weekly Market Review: July 20, 2020

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The Federal Reserve did not hesitate to act as the enormity of the COVID-19 pandemic began to unfold globally. Over a period of less than two months beginning on 3/17 /20, the Fed implemented 11 different emergency facilities, four of which were previously used during the 2008 mortgage crisis and seven programs that had never been used in the central bank’s 106-year history. The 11 programs were designed to support corporations (big and small), cities, states, investment firms and money market funds, providing them with no less than $2.6 trillion of short-term, low-cost loans. Surprisingly, as of late last week, the Fed had loaned out just $104 billion of the $2.6 trillion, i.e., only 4% of the total funds made available (source: Federal Reserve).

It was a week of extremes for pandemic data. New York City, the one-time epicenter of the virus, reported zero COVID-19 related deaths on 7 /11 /20. As of just last weekend, the state of Vermont had not recorded a single pandemic death over the previous 30 days. But sadly, the United States recorded more than 77,000 new COVID-19 infections on Thursday 7/16/20, a single-day high for America (source: COVID Tracking Project).

The five largest banks in the U.S. announced last week their plans to set aside $35 billion to prepare for what could be a wave of future defaults – mortgages, credit cards, personal loans, auto loans and corporate bankruptcies (source: CNN). Notable

Numbers for the Week:

  1. OUR SPENDING DECLINES AS WE AGE – The average retired couple spends 23% less money in their sixth year of retirement compared to what they spent in their first year of retirement (source: Health and Retirement Survey).
  2. BLAME IT ON COVID-19 – Crude oil production in the United States has fallen from 13.1 million barrels a day as of Friday 3/13/20 (the day President Trump declared a pandemic-driven national emergency) to 11.0 million barrels a day as of Friday 7/10/20 (source: Department of Energy).
  3. THIS FALL – 57% of colleges anticipate they will offer “in-person” class instruction for the upcoming 2020-21 school year, just 9% will offer only online class instruction, while 29% of schools will provide a combination of “in-person” and online class instruction. The remaining 5% of schools have yet to decide as of Friday
    7/10/20 (source: Chronicle of Higher Education).
  4. IT CAN WAIT – An estimated 40% of American adults at least age 18 have delayed getting medical care over the previous month as of 7 / 15/20 due to the COVID-19 pandemic. American adults make up 249 million of our 330 million population (source: Census Bureau).

Mark R. Reimet, CFP®
CERTIFIED FINANCIAL PLANNER™

Jodie Booth
Financial Advisor