Weekly Market Review: June 22, 2020

Weekly Market Review: June 22, 2020

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Fed Chairman Jerome Powell was blunt with his assessment of the U.S. economy during testimony before House and Senate committees last week. He admitted that the nation may be experiencing significant improvement in the number of employed Americans, but that the labor market will end up “well short” of the strong employment levels seen just before the pandemic hit the U.S. in early February 2020 (source: Federal Reserve).

The United States has never seen or required monetary action like the programs initiated by the Federal Reserve in the last 100 days. Wall Street “talking heads” have described that the Fed is “adding liquidity” to ensure that the financial markets don’t “freeze up.” What that really means: The Fed is printing money digitally (as much as $5 trillion by the end of 2021) and using the newly created funds to provide short-term credit lifelines to municipalities, states and businesses both big and small. This unlimited central bank support has likely taken the fear of a default off the table (for now) for thousands of entities in both the public and the private sector
(source: BTN Research).

The moratorium imposed by Congress to prevent lenders from repossessing homes from delinquent homeowners who have “federally-back mortgages” was extended last week from 6/30/20 to 8/31 /20. An average of 9,974 homes per month were repossessed by lenders during the first quarter of 2020 before the ban was implemented. Just 5,490 homes were repossessed in total during April and May (source: Attom Data Solutions).

Notable Numbers for the Week:

  1. WILL NEED TO KEEP WORKING – 71 % of 1,008 American adults surveyed in late April 2020 say that the COVID-19 pandemic has negatively impacted their retirement plans. 51 % say that the pandemic has also forced them to be “more open” to the idea of having some type of income-paying job during retirement (source: TD Ameritrade).
  2. MISS THE OFFICE – 1 in 3 American workers (32%) surveyed in May 2020 does not want to “work from home” when the option to return to an office environment is offered (source: Deutsche Bank Research).
  3. PANDEMIC DEATHS – 4,617 Americans died from the COVID-19 pandemic in the one-week ending Friday 6/19/20 as of 9am ET, bringing the national death total to 119,187. The 4,617 deaths were the smallest
    “Friday-to-Friday” death total recorded since Friday 3/27 /20 or three months ago (source: NBC Meet the Press, First Read).
  4. THE U.S. DOLLAR IS KING – 61 % of the world’s foreign exchange reserves, i.e., cash holdings of central banks around world, were held in U.S. dollars as of the end of calendar year 2019 (source: International Monetary Fund).

Mark R. Reimet, CFP®
CERTIFIED FINANCIAL PLANNER™

Jodie Booth
Financial Advisor