Fed Unveils Bigger Tool Box

April 9, 2020 will go down in the history of the Federal Reserve as a watershed day. The Fed came out with a plethora of lending programs that cover all manner of assets and asset classes the likes of which have never been employed before in the Fed’s storied history. In essence, the Fed is…

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Exploring More Recovery Scenarios

The risk-on rally this week ran out of steam yesterday afternoon as investors ran too far ahead of the good news on slowing case level growth. It’s not hard to see that New York-based traders reacted with enthusiasm as case counts tapered for a third straight day in the Big Apple, but New York does…

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Markets Looking for Peak in Case Numbers

Is April 30th a Realistic Target? Now that all but the most recalcitrant states have opted for some form of stay-at-home order the U.S.’s number of reported COVID-19 cases should start to level off, but the trajectory this week and next will most likely still be upwards. The latest lockdown actions will exacerbate the economic…

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Leisure/Hospitality Job Losses Dominate March Employment Report

We were expecting bad job numbers in March but not the horrific numbers we’ll see next month. That’s because the survey for the March jobs report occurred on March 12 and that was when the weekly jobless claims jumped a pedestrian 282,000. The subsequent weekly claims hit 3.3 million and 6.6 million yesterday so the…

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Sobering Numbers Close a Quarter We’ll All Remember

We suppose it’s possible to have an uglier quarter to personally live through, but from a national perspective the collective financial and personal experience of the first quarter of 2020 certainly puts it in the running for Worst Quarter Ever. Good bye and good riddance. Here are some numbers for you:  from the S&P’s all-time…

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Another Fiscal Stimulus Bill in the Works?

More Fiscal Bills to Come? Now that the U.S. has surpassed China in the number of reported COVID-19 cases, and the trajectory still scarily upwards, calm talk from the administration won’t be sufficient to keep markets from starting to price in more dire scenarios for both the death toll and the economic hit. That is…

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Risk-Off Mood Returns as Case Counts Mount

When the Chairman of the Federal Reserve takes it upon himself to appear on the ever-popular Today Show, you know you’re living through unique times, but that’s where we find ourselves. The money quote from Powell was “not to worry about the Fed running out of money.” That tells you they will be all-in and…

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$2 Trillion Fiscal Stimulus Bill Agreed to as Virus Cases Grow

While the Fed jumped into the unfolding crisis with both feet, investors have been nervously awaiting the details of a fiscal stimulus package out of Congress, and we finally got one yesterday evening. With the $2 trillion package agreed to but still awaiting formal passage, the risk-on mood was strong with stocks anticipating the deal…

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Fed Announces Unlimited QE While Stimulus Bill Stuck in the Senate

Since their emergency rate cut last Sunday the Fed has been hyperactive in instituting new programs in order to provide liquidity and apply some cushion to the economic fall.  The Fed quickly grasped the gravity of the situation and the coming dive in economic output with an array of programs that we thought/hoped we wouldn’t…

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When will the Economy Rebound?

As the virus spreads its way across the U.S., the question turns to how long will this last? You’ve no doubt seen the charts that compare case numbers by country and across time. Looking at the results from China they started reporting cases in early January and are now taking tentative steps to return to…

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Fed’s Sunday Rate Cut Sets Up Another Volatile Week

The Fed met in emergency session yesterday and cut rates 100bp (0.0%-0.25%) and also reinstated quantitative easing. The move on a Sunday afternoon underscores the seriousness of the developing coronavirus and the Fed dug deep into its tool kit. In addition to cutting rates to zero they also announced they will purchase $500 billion in…

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It’s Friday the 13th, Just Sayin’

It’s risk-on Friday (the 13th) after several countries stepped in overnight with both fiscal and monetary plans to deal with the ongoing crisis. The biggest of the plans is from the EU with officials ready to suspend fiscal rules to increase flexibility in dealing with the crisis, and the normally fiscally conservative Germans are declaring…

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