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What Effect Will Lockdowns Plus New Stimulus Checks Have On Markets This Week

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Wall Street begging for stimulus checks. Gold is golden. Bonds are «dead money».
Fresh stimulus and new stimulus checks to some individuals is in the works. Wall Street is begging for it.
But will an ever increasing chorus of governors calling for a return to partial lockdowns, not to mention lockdowns in Japan over the weekend, lead investors, both foreign and domestic, to cash out this week?
For now, all eyes are on the consumer. What shape are they in to keep the market going, thanks to unemployment insurance and money from the Payroll Protection Program keeping most people solvent.
Signals are now emerging that the initial boost from pent-up demand in early summer is fading. Consumers aren’t all that interested in attending theme parks and retail in masks on 90 degree days. They are staying home. Consumer confidence is slipping lower due to government enforced joykills.
That, plus market concerns about labor markets, clouds the outlook and could be exacerbated if the government does not announce its final relief bill this week. It was expected last week.
Renewed stimulus will backstop millions of workers afloat, especially those who were told to go home again after a bring stint back in the gym, the mall, or the local restaurant.
Untold millions more are not expected to get their old jobs, according to one study by the University of Chicago published earlier in the pandemic. If true, that will be the second wave hit to consumer sentiment after the initial wave was protected people from a severe wipeout thanks to the government.
Announcements of more lockdowns, or schools opening and then reclosing, will sour Wall Street. More talk of school opening policies is expected this week. Some investors will see a political angle. But all will see an economy and a society on pause if schools in the northeast — the early epicenter and first to recover from the coronavirus outbreak — force students and teachers into hiding.
The U. S. Is Flatlining
U. S. tech companies are doing great, we learned from last week’s earnings reports. Staying-at-home was profitable for companies dependent on its end users to be plugged in as much as possible.

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