Saving and the Shutdown

Monday Morning Outlook

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 6/22/2020

Turning off the global economic light-switch, and then turning it partially back on, has sent shockwaves through economic data that, while anticipated, have been jaw-dropping in both directions.

    For example, US retail sales plunged a combined 21.8% in March and April, before rising 17.7% in May. Manufacturing production fell 20.0% in March and April, before gaining 3.8% in May. Nonfarm payrolls shrank 22.1 million in March and April, followed by a gain of 2.5 million in May. The savings rate surged to 33% in April, the highest rate ever recorded with current metrics.

    This week we’ll get some fresh numbers on home sales, orders for durable goods, and personal income and spending, and we expect it to be a mixed bag. Existing home sales are counted at closing, so the data for May was very weak, as closings in May reflect contracts signed in the lockdown months of March and April. New home sales in May should be better, because those are counted when contracts are signed, and lockdowns had been relaxed. New orders for durable goods should also look better after a 31.5% drop, combined, in March and April. Businesses investment plans froze during the lockdown and, in some cases, previously-made orders were cancelled. Now, orders should start to revive.

But the oddest report this week is going to come on Friday, when we get personal income and spending data for May. Remember, personal income surged in April, rising 10.5%. Normally, increases in personal income are a good sign, but not this time. Both private-sector wages & salaries and small business income plummeted.

Personal income soared in April because the government handed out checks (transfer payments), mostly in the form of one-time payments to taxpayers, but also through increased unemployment benefits. In other words, the US borrowed from future generations to keep income up for the current generation during the COVID shutdown.

But while transfer payments boosted income, spending fell for two reasons. First, people were locked inside, which restrains spending. And, second, many stores, restaurants, bars, theaters, and all kinds of other businesses, were closed anyway. The result: the savings rate surged to 33%, the highest level on record going back to at least 1959. Before this, the highest saving rate for any month before April was 17.3% in May 1975.

In total, the annual rate of government transfer payments rose by $3 trillion, while the annual rate of spending fell by $1.9 trillion. Factoring in the drop in other forms of income (like wages & salaries and small business income), annualized saving grew by $4.0 trillion in April. This means 75% of the burst in savings came from government transfer payments.

But what happened in April was a fluke that should reverse in May, as the one-time IRS payments dwindle and consumer spending rebounds. What happened was artificial, due to the economic shutdown and government reaction. While some of the rise in savings is pent-up demand, this savings rate is artificial, and reflects borrowing from the future. The shutdown destroyed wealth, and importantly, wealth-creating capacity. The artificially high savings rate should not be taken as a sign that all will be well.

Ultimately what matters is how much private-sector income revives, and how quickly. The early stages of the recovery will look like a "V," but we still anticipate a full recovery is years away: real GDP won’t hit the level of late 2019 until at least the end of 2021; the unemployment rate won’t be back down to 4.0% or below until 2023.

Entrepreneurs and innovators made great strides in the past few decades. Now, they have their work cut out for them digging out of the hole created by the shutdowns. Future growth will depend on how rapidly the government can end the lockdowns, and unwind the extraordinary measures taken over the last few months.

    Consensus forecasts come from Bloomberg. This report was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security. ~ ~

Stocks’ Rally Hits Roadblock With Worst Drop Since Mid-March

June 12, 2020  

Stocks’ Rally Hits Roadblock With Worst Drop Since Mid-March  

Dear Clients and Friends:  

The word unprecedented seems to have lost its meaning given the number of times we’ve heard it in recent months. But it’s a good word to help describe the confluence of events that include a global pandemic, an economic slowdown here and abroad, job losses, geopolitical tensions and civil unrest. If your head is spinning, we don’t blame you. What we are experiencing can be unnerving.  

The equity markets and the global economy have been shaken, and this week saw the markets’ best sustained rally since the ’30s dissipate in just a few hours, while gross domestic product continues to decline and COVID cases continued to rise in key areas. At one point, the S&P 500 had made up for this year’s losses – only to post its worst daily decline since March on fears of a second wave of coronavirus cases (several states have seen upticks of late), an additional 1.5 million jobless claims and the potential impact on domestic and global economies, explained Raymond James Chief Investment Officer Larry Adam. The uncertainty surrounding the availability of a potential vaccine compounded already low investor sentiment.  

“Elevated levels of optimism and great expectations of a strong economic and earnings rebound are being met with a dose of reality,” Adam said. “However, we remain optimistic over the longer term.”  

Senior Portfolio Strategist (Equity Portfolio & Technical Strategy) Joey Madere concurs, saying, “We continue to view the positives, such as an enormous fiscal and monetary response, as outweighing the potential negatives (e.g., the election, U.S./China trade rhetoric, virus resurgence).” As such, investors may want to accumulate favored sectors and stocks as this pullback plays out.  

Progress has been made in curtailing the spread of COVID-19, yet as the majority of states reopen and large gatherings from protests continue, there’s the potential of a second wave of the virus. Although another national stay-at-home order is unlikely, according to Healthcare Policy Analyst Chris Meekins, continued upticks in cases could lead to worsening health outlooks and stronger mitigation measures in affected regions.  

Whether we’ll see an additional round of stimulus out of D.C. remains to be seen, adds Washington Policy Analyst Ed Mills. “Back to work” is emerging as the theme of the next congressional fiscal relief package, but the direction of the economy and the trajectory of the virus will weigh significantly on the debate. For now, lawmakers anticipate short-term additional economic support with the launch of the Federal Reserve’s Main Street Lending Program, which could provide hundreds of billions in loans to midsized businesses left out of the previous government aid programs. The larger questions for the next congressional package revolve around aid to significantly affected sectors, extensions of expiring individual support (e.g., eviction rotection, unemployment insurance), additional tweaks to small business lending, and whether more direct payments are necessary.  

Here is a look at some key factors we are monitoring:  

Economy

  • Following its June 9-10 policy meeting, the Federal Open Market Committee left short-term interest rates unchanged and kept its asset purchase plans in place. Officials expect a gradual economic recovery and see no change in interest rates through 2022 – an outlook similar to those of private-sector economists, but disappointing for financial market participants.

  • While the National Bureau of Economic Research declared that the economy entered recession in February, it’s likely that the economy bottomed in April, explains Chief Economist Scott Brown. The job market picked up in May, motor vehicle sales improved, and many of the other monthly economic indicators are expected to show sharp improvement as state economies reopen. However, the May rebound came after very steep declines in March and April. Absent a vaccine or effective treatment against the coronavirus, a full economic recovery will take many quarters.

Equities

  • Volatility has crept back up in recent days. Strength from technology stocks masked some of the internal deterioration this week, as the Nasdaq composite was able to break out to new all-time highs, while the average S&P 500 company traded 7% lower.

  • Pullbacks are to be expected, says Madere, especially following the extremely rare up-move experienced over the past 50+ days. He notes that 2009, 1982 and 1975 periods were the only three instances with 25%-plus gains in a 50-day period since the 1930s – all of which were experienced coming out of recessionary bear markets and were followed by short-term pullbacks within the next month or two. Importantly, they all then experienced above average returns over the ensuing 12 months.

  • This pledge to keep rates low and the caution around economic growth from the chair of the Federal Reserve has been damaging to equity markets, explains Chief Fixed Income Strategist Kevin Giddis. What we have learned this week is that there is a cost to reopening the U.S. economy.

Bottom line

  • The equity market should climb higher over the next 12 months or so, Adam believes. Disappointments could lead to further downside volatility. Patience and a focus on asset allocation remain imperative in his view.

  • Recent volatility can be viewed as a needed (and healthy) consolidation for the market to digest its gains, so the fundamentals can begin to catch up to price. While opportunities exist, they come at various levels of risk for both stocks and bonds. Patience and caution are warranted.  

We share all this with you to lend perspective on what’s happening around the country and the world, in markets here and abroad. Know that we built your financial plan with your long-term goals in mind, and we’ve weathered volatility like this before. Of course, we’re always available to discuss your concerns, assess strategic opportunities and offer perspective when needed. Please do not hesitate to reach out to set aside some time to talk. Thank you for your trust in us.    

Sincerely,    

                                       

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. Economic and market conditions are subject to change. The S&P 500 is an unmanaged index of 500 widely held stocks. An investment cannot be made in this index. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.  

Material prepared by Raymond James for use by its advisors. 

The Recession is Over

Monday Morning Outlook

The Recession is Over To view this article, Click Here
Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 6/8/2020


The recession that started in March is the sharpest downturn since the Great Depression. As it turns out, it was also the shortest.

Friday's employment report should leave little doubt that the US economy has already hit bottom and is starting to recover. Every economist brave enough to make a public forecast thought nonfarm payrolls would drop in May and the unemployment rate would continue to rise. Instead, it was the opposite: nonfarm payrolls rose 2.5 million, and the unemployment rate dropped to 13.3%.

This doesn't mean the US is fully recovered, or even close; a full recovery is going to take at least a few years. But look for more positive numbers from here on out, including next week's reports on retail sales, industrial production, and home building.

Paul Krugman tweeted the possibility of the Trump Administration cooking the books, but that's absurd. Jason Furman, one of President Obama's top economists, pointed out that the Bureau of Labor Statistics has 2,400 career staffers and only one political appointee, with no ability to cook the books. The odds of a conspiracy among these career civil servants to help the Trump Administration are zero.

Some analysts have been saying that the unique nature of the economic downturn has made the unemployment rate unreliable, because, for example, PPP loans have allowed furloughed workers to be paid, even though they aren't working, so technically, some say, they are unemployed. Counting these workers as unemployed would have put the jobless rate at 16.3% in May versus the official report of 13.3%.

However, using the same method in April would have meant that jobless rate would have been reported as 19.5%, not the official estimate of 14.7%, which means the drop in the jobless rate in May would have been 3.2 percentage points (19.5% to 16.3%), not the 1.4 points reported Friday. And it's the change in the unemployment rate that matters for financial markets.

Meanwhile, initial jobless claims fell for the ninth consecutive week, and continuing claims remain below the peak hit in the week ending May 9, both consistent with an economy that is already hit bottom.

Another piece of evidence supporting the case for a recovery is that tax receipts look better. Every day the Treasury Department releases figures on various categories of tax receipts. These receipts vary wildly depending on the day of the week and the time of the month, so we like to compare them to 2015, because that was the last year the number of days in March through December fell on the same days of the week as 2020.

In the past five workdays, the Treasury collected $56.8 billion individual income and payroll taxes withheld from paychecks, up 11.8% from the same days in 2015. A month ago, in early May (specifically, the five workdays through May 7), these receipts were up 7.1% versus 2015. This acceleration signals the economy has turned a corner.

Which brings us to our outlook for equities. A month ago, with the S&P 500 at 2930, we projected that stocks would recover to 3100 by year end. But now we're barely under 3200. We continue to expect more gains, but don't expect it to be a straight line, with the S&P 500 finishing the year around 3350 and the Dow Jones Industrials average at 28,500.

Profits will be down substantially in the second quarter, but should recover strongly in the several quarters thereafter. Meanwhile, the money supply is growing rapidly, and the Federal Reserve is prepared to keep monetary policy loose for the foreseeable future, as should be clear after Wednesday's meeting.

The US has gone through tremendous turmoil so far this year, with a response to COVID-19 that included unprecedentedly widespread government-mandated economic shutdowns, followed by a combination of legitimate protests, riots, and looting. No one knows for sure what the second half will bring, much less 2021 and beyond. But we think that, like in the past, those who have faith in the future will be rewarded. This report was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

Follow Brian Wesbury
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Follow First Trust
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Sincerely,  

                                         

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

The attached information was developed by First Trust, an independent third party. The opinions are of the listed authors at First Trust Advisors L.P, and are independent from and not necessarily those of RJFS or Raymond James.  All investments are subject to risk. There is no guarantee that these statements, opinions, or forecasts provided in the attached article will prove to be correct. Individual investor's results will vary. Past performance does not guarantee future results. Forward looking data is subject to change at any time and there is no assurance that projections will be realized. Any information provided is for informational purposes only and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Dow Jones Industrial Average (DJIA), commonly known as “The Dow”, is an index representing 30 stocks of companies maintained and reviewed by the editors of the Wall Street Journal. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. 

Stocks’ Recovery Continues; NASDAQ Now Positive for the Year

June 2, 2020  

Stocks’ Recovery Continues; NASDAQ Now Positive for the Year  

Dear Clients and Friends:  

Stocks continued to move higher in May, as the S&P 500 rallied for a second consecutive month. Continued stimulus from fiscal and monetary authorities has boosted equities, bolstering expectations for an economic rebound later this year and into early 2021. However, positive equity headlines don’t tell the full story, cautions Raymond James Chief Investment Officer Larry Adam. While he expects equities to be higher over the next 12 to 24 months, near-term risks include rising geopolitical tensions with China as well as potential setbacks related to COVID-19. It helps that mitigation measures have the number of new cases, hospitalizations and the percentage of positive tests trending in the right direction. 

U.S.-China relations will likely emerge as a leading theme in the presidential race, explains Washington Policy Analyst Ed Mills. In May, the U.S. outlined restrictive measures targeting China on technology, capital markets and recent laws imposed on Hong Kong. Escalating confrontation between the U.S. and China may undo any progress made during the 2018-19 trade negotiations, and the relationship threatens to hit new lows in 2020, added Mills.

While there has been some promising data on vaccines and therapeutics in recent weeks, there remains a lot of uncertainty on the virus spread, consumer behavior and pace of the economic recovery, explains Joey Madere, senior portfolio strategist, Equity Portfolio & Technical Strategy.

Despite headwinds, equities pushed higher in May. The S&P 500 gained 4.53%, while the Dow Jones rose 4.26% and the Nasdaq delivered 6.75%. The S&P 500 is still down almost 6% on the year, however it has begun to regain key technical levels. Long-term opportunity for an ensuing bull market remains, Adam adds. 

Performance reflects price returns as of market close on May 29, 2020

Performance reflects price returns as of market close on May 29, 2020

Here is a look at some key factors we are watching, both here and abroad:

Economy

  • Recent economic data continues to reflect the record decline we’ve seen so far in 2020, including unprecedented job losses and declines in consumer spending. Aggressive action from the Federal Reserve (the Fed) has helped to ease strains in credit markets, and fiscal support from Congress has provided some cushion against the downturn.

  • The expansion of the Fed’s balance sheet and the increase in government borrowing are not necessarily inflationary. In fact, Chief Economist Scott Brown expects some downward pressure on prices given high unemployment and the excess in global productive capacity.

  • After the pandemic, the U.S. will need to get the federal budget on a more sustainable path, but the current elevated level of borrowing need not have an adverse impact on longer-term growth. The greater risk for the economy is ending support too soon, Brown notes.

  • As social distancing guidelines relax, Brown anticipates a sharp rebound in economic growth into the second half of the year, fueled partly by the buildup of savings during the lockdown. However, without a vaccine or effective treatment for COVID-19, many individuals may be reluctant to eat in restaurants, get on airplanes, or attend concerts or sporting events. A full recovery could take several quarters.

Equities

  • The rally in U.S. growth equities relative to the rest of the world is primarily driven by a handful of companies that have benefited from heavy exposure to technology and the work-from-home environment, with large cap and growth names leading the way. Missing is the broad-based rally in more cyclical names as well as the smaller companies, says Nick Lacy, chief portfolio strategist for Raymond James Asset Management Services.

  • Companies may face challenges returning to pre-pandemic profitability with double digit unemployment. The employment situation is likely to stay negative for a few years as some jobs are not coming back any time soon, notes Lacy.

  • The massive underperformance of value stocks relates mostly to those particular companies’ quality and profitability, both in the U.S. and abroad. 

International

  • During May, equity markets outside the U.S. continued to build on the gains of late March and April, although the strengths of these gains typically were lower than those seen in the mainstream American markets, reflecting lower technology sector weightings, according to European Strategist Chris Bailey.

  • Across Europe, both COVID-19 new cases and death rates moderated, allowing for tentative loosening of lockdown rules. Economic data – including corporate earnings results – remained exceptionally weak; however, both consumer and business survey data started to improve. Regional government stimulus efforts included an extension of the U.K.’s wage support scheme until the end of October and a Franco-German plan to bolster the eurozone’s recovery. 

  • Interestingly, the European Union plans to put significant funding behind its “green recovery,” making it more than just a buzzword. The EU proposed its largest-ever budget, including investments for the European Green Deal, the largest decarbonization initiative in world history, notes Pavel Molchanov, energy research analyst. The EU plan to sustain its post-crisis recovery focuses strongly on green initiatives, such as low-carbon electricity generation, including support for countries such as Poland and the Czech Republic, which have been heavily dependent on coal.

  • China and some other parts of East Asia continued their more advanced economic recovery, avoiding any notable COVID-19 second wave so far.

Fixed income

  • Overall, May was a very positive month for credit, for balance sheets and for issuance, with one notable exception – the drop within municipal spreads. The big drop reflects very low Treasury rates coupled with investor appetite for high-quality yield, explains Doug Drabik, managing director for fixed income research.

  • However, we also saw significant spread compression as well as a growing new issue calendar for corporate and municipal bonds, notes Chief Fixed Income Strategist Kevin Giddis.

  • These conditions have allowed state and local governments to tap the capital markets at much lower yields. Furthermore, there’s an expectation that a second round of COVID-19 relief could provide additional money to aid state and local governments with revenue shortfalls and budget deficits. If that happens, we could see municipal yields fall even further.

  • The Treasury offered its first 20-year bond since 1986, and it was a hit. The Treasury has said that it will need to raise $3 trillion in the second quarter of 2020, and the reopening of the 20-year bond helps to let the Treasury finance well out on the yield curve at just over a 1% rate.

Bottom line  

  • Savvy investors can consider using market pullbacks to add exposure to favored sectors (e.g., info tech, communication services, health care).Be sure to set aside emotion before thoughtfully adding to your portfolio. While opportunities exist, they come at various levels of risk for both stocks and bonds.

  • Be patient and steadfast. Please know that [I am/we are] thinking of you and your family and wishing you all good health.

As always, feel free to reach out with any questions you may have – about the markets, your financial plan or anything else that we may be able to help with. Thank you for your trust in us.   


Sincerely,

                                       

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS 




Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. Economic and market conditions are subject to change. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 is an unmanaged index of small cap securities. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates fall, fixed income prices rise.    

Material prepared by Raymond James for use by its advisors. 

SEC Regulation Best Interest: Important Disclosure Documents

Dear Clients and Friends:  

The Securities and Exchange Commission (SEC) recently adopted new regulations, including Regulation Best Interest, which we believe aligns well with our longstanding core value of putting clients first.

Effective June 30, 2020, all broker-dealers and investment advisers must provide clients with important disclosures to help with their investment decisions. In the coming months, you will receive a disclosure package from Raymond James that includes two new disclosures: 

  • Form CRS (Client Relationship Summary) – A two- to four-page document that describes accounts and services available as well as fees, charges and potential conflicts of interest associated with certain account types.

  • Important Client Information – An approximately 75-page booklet that provides additional details about the topics addressed in Form CRS, as well as further information regarding available investment products and services.

When you receive the package, we suggest you read the new disclosures. While no action is needed, we wanted to make sure you knew what to expect.

In the future, you may receive the Form CRS again on some occasions based on certain investment activities such as opening another account. The SEC wants to ensure investors are aware of available account choices as they are making decisions. By June, these disclosures will also be available on raymondjames.com/legal-disclosures.

How will I receive the upcoming mailing?

You will receive the disclosure package via traditional mail or electronically based on your document delivery preferences at the end of April. The magnitude of the client mailing required a longer production timeline for printing and mailing.

How can I update my delivery preferences for future mailings?

If you wish to receive future disclosure mailings, statements and other correspondence from Raymond James electronically, we encourage you to consider updating your preferences in raymondjames.com/ClientAccess via Account Services > Client Tools.

If you haven’t yet signed up for Client Access, now is a good time to do so given the limited physical contact during these unprecedented times. This secure, convenient online account access system complements the services we provide, offering instant availability of your financial information wherever you are in addition to the convenience of receiving statements and other communications electronically.  

Please feel free to contact us with any questions.    

Sincerely,    

                                       

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS    

Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change. Past performance may not be indicative of future results.  The performance noted does not include fees or charges, which would reduce an investor's returns. Material prepared by Raymond James for use by its advisors.  

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2020 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.  

Raymond James Financial Services does not accept orders and/or instructions regarding your account by email, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. Email sent through the internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all email. Any information provided in this email has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this email. This email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer.

LONGEVITY EVER AFTER

Dear Clients and Friends:

Longevity post.jpg

Volume 3 – May 2020  

Have you called your favorite aunt lately? What about your neighbor up the street? Studies show that elder fraud is more likely to occur when an older individual is isolated or there is an absence of a guardian.(1)  Now more than ever, it is important that we stay connected with our family members and friends, even if we must follow physical distancing. Coronavirus-related scams are on the rise, and the lack of in-person connection puts us at heightened risk.

Here are some tips to help protect against scams:(2)

  • Do not order at-home test kits. The U.S. Food and Drug Administration (FDA) has only approved one at-home test, and it still requires a doctor's order.

  • Ignore information about vaccinations. There are no approved treatments or vaccinations for coronavirus at this time.

  • Disconnect from robocalls. Robocalls are illegal, and scammers are using them to hook people with work-from-home and health insurance schemes.

  • Be wary of emails claiming to be from official government bodies. Reference sites like coronavirus.gov for important information. 

  • Research the organization before making a donation. It is great to help others during a difficult time, and we can help you research the best options before you make a gift.

We encourage you to visit the Federal Trade Commission’s “Coronavirus Advice for Consumers”  page. It is regularly updated with new scams. This will help you be in the know and protect you and your family and friends. If you ever have any questions about this topic, please don’t hesitate to reach out. Our office has a number of resources to help you manage the ongoing challenges related to the protection against financial fraud.

Additional Articles

Retirees And Seniors - It’s A Critical Time To Protect Your Finances | Forbes

Four Ways To Help Prevent Loneliness While You're Social Distancing | Forbes

Scammers Claiming To Be CDC Employees Seek Donations, Offer 'Tests' To Seniors | KSMU Radio

 

Sincerely,                                          


Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS ~


[1] Elder Fraud and Financial Exploitation: Application of Routine Activity Theory, Marguerite DeLiema, PhD, 2018, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6044329/


 [2] Coronavirus Advice for Consumers, Federal Trade Commission, 2020, https://www.ftc.gov/coronavirus/scams-consumer-advice  Raymond James is not affiliated with Broadspire Care Management, PinnacleCare or EverSafe.
   
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website's users and/or members             



Volatility Reemerges After “Too Far, Too Fast” Stock Gains

May 15, 2020      

Dear Clients and Friends:    

We hope you and your loved ones are safe and well, coping as best you can with the changes brought about by the coronavirus pandemic. As policymakers discuss the appropriate course for reopening the economy and mitigating both health and economic risks, it can be just as challenging to make personal decisions about how to proceed. Understanding recent volatility in the financial markets may be adding to your sense of uncertainty, we want to share with our valued clients the latest insights from strategists at Raymond James.   

The S&P 500 index has experienced declines this week. Volatility can be attributed to a variety of factors, including concerns from national health advisors over a possible resurgence in the spread of the virus as a result of reopening the country too soon, comments by the Federal Reserve chairman emphasizing downside risks to the economy, elevated jobless claims, partisan differences on additional fiscal stimulus legislation and renewed tensions between the United States and China.  

“As difficulties in ending social distancing have become more apparent, hopes for a rapid recovery seem to have faded,” Raymond James Chief Economist Scott Brown said.  

The S&P 500 had gained 31% over a 26-day period from its low on March 23 – too far, too fast, according to Joey Madere, senior portfolio strategist for the Equity Portfolio & Technical Strategy group. The rally was driven disproportionately by the Technology and Health Care sectors, which buoyed the index amid business closures and decreased consumer spending.  

“Given the size and speed of the recovery, it is not surprising to see the recent uptick in volatility over recent days,” Raymond James Chief Investment Officer Larry Adam said. “With equity valuations at multi-year highs, less optimistic messages weighed on the market this week. Volatility will likely remain elevated over the coming weeks and months as the market gauges the scope of the reopening of the economy and awaits a reliable therapeutic or vaccine. Despite this, we believe the trajectory for the market is up over the next 12 months.”  

The week’s renewed volatility reflects the short-term uncertainty around the competing needs to reopen the economy and mitigate the spread of COVID-19, the respiratory illness caused by the virus.  

“Early indications suggest improvements to consumer activity are likely to be gradual,” Madere said. “We expect volatility to continue, and would use pullbacks as an opportunity to continue to accumulate equities for the longer term. Remember, bear markets are often very fast and violent, whereas bull markets can last for years.”  

Congress has provided about $2.9 trillion – equivalent to about 14% of gross domestic product – in fiscal support for households, businesses, healthcare providers, and state and local governments. U.S. Federal Reserve Chairman Jerome Powell indicated further fiscal support will be needed, adding that it “could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”  

Raymond James Washington Policy Analyst Ed Mills is watching two developments that may affect markets: fiscal stimulus negotiations and the U.S.-China relationship. Mills views a fiscal stimulus proposal from the U.S. House of Representatives, where Democrats hold the majority, as a starting point for negotiations that could push the next phase of legislative relief response into June.  

“Some parts of the Democrats’ $3+ trillion bill could become part of the final package, particularly targeted state aid, healthcare funding and adjustments to small business lending programs,” Mills said. “But the scope of the state aid as currently structured, as well as various other spending initiatives, signal that Democrats and Republicans remain far apart on the core issues.”  

Mills also sees signs of escalating tensions in the U.S.-China relationship as a potentially significant risk for the market in the second half of this year should the Trump administration return to its trade-war playbook from before the Phase One agreement reached prior to the pandemic.  

“Election year political considerations increase the odds of a return to confrontation in the coming months,” Mills said.  

As we all look to stay abreast of the latest developments, we will continue to keep you updated with relevant, and hopefully, useful information. Meanwhile, you can find the latest from Raymond James on the coronavirus and market volatility here.  

Thank you for your trust in us.  

 

Sincerely,

                                         

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Their markets are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Individual investor’s results will vary. Past performance may not be indicative of future results. Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change.  

Material prepared by Raymond James for use by its advisors.

The Job Market

Economy and Policy

May 13, 2020

Chief Economist Scott Brown discussed current economic conditions on May 8th.

The April Employment Report was flawed, reflecting issues with data collection, classification, and methodology. However, results were consistent with an unprecedented, sharp deterioration in labor market conditions, mostly at the lower rungs.

Payrolls fell by more than 20 million, nearly erasing the number of jobs gained since the financial crisis. The unemployment rate jumped to 14.7%, but that understated the problem. Correcting for a classification issue, the figure would have been closer to 20%.

So many lower-income workers were jettisoned in April, average hourly earnings surged. None of this tells anything about where we’re going. While many are hoping for an economic rebound, recovery will take time and there is going to some permanent job destruction.

Nonfarm payrolls fell by 20.5 million in the initial estimate for April, the largest decline on record, dwarfing the amount of job losses during the financial crisis. Private-sector jobs were down 14.5% from a year earlier. Leisure and hospitality lost 7.65 million in April, down 48% in the last two months (5.49 million of that in restaurants). Manufacturing shed 1.3 million jobs. Construction lost 975,000. Retail jobs fell by 2.1 million. Temp- help payrolls fell by 842,000 (-30.9% y/y). State and local government lost 981,000 jobs, about two-thirds in education (in comparison, we lost about 700,000 state and local government jobs in total during the financial crisis).
Click here to view chart

In a normal April, we would expect to add around one million jobs. Prior to seasonal adjustment, payrolls fell by 19.5 million. The Bureau of Labor Statistics uses a birth/death model to account for business creation and destruction. This model does well in normal circumstances, but tends to miss badly at turning points. The model would have added 246,000 to the unadjusted payroll total, but the BLS adjusted that to -553,000 to account for the effects of COVID-19. Annual benchmark revisions will eventually correct that, but why worry about the nearest million or so at this point.

Weekly jobless claims have been trending lower in recent weeks, but the level remains elevated. Over the seven weeks ending May 2, 33.5 million workers had filed a claim. The Labor Department’s seasonal adjustment is multiplicative, which exaggerates the headline figure. Prior to seasonal adjustment, 30.7 million filed claims (18.7% of the labor force, or more than one in six workers). There may be multiple filings, as some workers get tired of waiting and file again, but that is likely small. On the other hand, a lot of workers can’t file, so the headline figure tends to understate the amount of job losses.

The unemployment rate spiked to 14.7% in April. Furloughed individuals should be tallied as “unemployment on temporary layoff,” but a lot weren’t. Enough, according to the BLS, to reduce the unemployment rate by about five percentage points. In other words, the unemployment rate should have been reported closer to 20%. The unemployment rate for teenagers jumped to 31.9% (from 14.3 in March and 11.0% in February). The rate for young adults (aged 20-24) rose to 25.7% (from 8.7% in March and 6.4% in February). For prime-age workers (25-54), the rate rose to 12.8% (from 3.6% in March and 3.0% in February).

Click here to view chart

The weakness in the labor market was better reflected in the employment/population ratio, which fell to a record low of 51.3% (vs. 60.0% in March and 61.1% in February).Average hourly earnings are lower in leisure & hospitality than in other industries (in February, $16.85 vs. $28.52 for the private sector as a whole). Hence, greater job losses in lower paying industries would boost the overall average. However, average wage gains picked up across a wide range of industries in April. It appears that lower-income workers fared the worst in general in April – not just in leisure & hospitality.

Click here to view chart

Many furloughed workers can expect to return to work at the economy opens up, but not all. The Payroll Protection Program, “recovery rebates,” and extended unemployment benefits should help to less the damage, but many will fall through the cracks and not every job will come back. There will be some permanent damage. How much is unclear.

Most of the economic data reports are backward-looking, but weekly jobless claims will remain the key real-time figure to watch. Claims have been coming down in recent weeks, but they have remained in the millions. Seeing claims falling a lot more would be a hopeful sign, but that may not happen anytime soon.

The opinions offered by Dr. Brown should be considered a part of your overall decision-making process. For more information about this report – to discuss how this outlook may affect your personal situation and/or to learn how this insight may be incorporated into your investment strategy – please contact us.

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates (RJA) at this date and are subject to change. Information has been obtained from sources considered reliable, but we do not guarantee that the foregoing report is accurate or complete. Other departments of RJA may have information which is not available to the Research Department about companies mentioned in this report. RJA or its affiliates may execute transactions in the securities mentioned in this report which may not be consistent with the report's conclusions. RJA may perform investment banking or other services for, or solicit investment banking business from, any company mentioned in this report. For institutional clients of the European Economic Area (EEA): This document (and any attachments or exhibits hereto) is intended only for EEA Institutional Clients or others to whom it may lawfully be submitted. There is no assurance that any of the trends mentioned will continue in the future. Past performance is not indicative of future results

QE Infinity and Beyond

Research Reports

QE Infinity and Beyond To view this article, Click Here


Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist


Date: 4/29/2020


The Federal Reserve has been extremely aggressive since the Coronavirus and related shutdowns hit the US economy and made it clear today that it will continue to be so until the US economy has gotten back on its feet. This includes keeping short-term interest rates near zero, continuing to expand its balance sheet with purchases of Treasury debt and mortgage-backed securities (both residential and commercial), as well as using facilities to maintain liquidity and the flow of credit to households, businesses (both large and small), and state and local governments.

Chairman Powell made it clear at his press conference that the Fed will continue to use the full range of its legal powers "forcefully, proactively, and aggressively" and wants to see an economic recovery that is "as robust as possible."

After the Great Recession, the Fed didn't raise short-term rates again until December 2015, well into the recovery, and when the unemployment rate was 5.0%. Given the Fed's commitment to make sure the economy heals from the current crisis, don't expect the Fed to raise rates for the next couple of years, perhaps not until 2024. As Chairman Powell said at his press conference, the Fed won't be in any hurry to raise rates.

Does this mean higher inflation? Not right away. If anything general price measures will keep falling in the short term due to lower commodity prices. After that, we expect a return of general price increases, but not rampant inflation. Yes, the supply of money is growing by leaps and bounds. But the demand for money by households and businesses has also grown enormously. Cash is King right now and likely to remain so over the medium term. One key issue is how long the federal government maintains very generous unemployment benefits in which a large share of workers can earn more through July by not working than by going back to work. If these benefits remain in place into 2021, we may see faster inflation as the businesses that are growing and hiring need to ramp up wages to entice people back to work. Time will tell.

Looking forward, expect more of the same in 2020: continued expansion of their balance sheet and short-term rates near zero.

This report was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

Follow Brian Wesbury
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Sincerely,                                            

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

The attached information was developed by First Trust, an independent third party. The opinions are of the listed authors at First Trust Advisors L.P, and are independent from and not necessarily those of RJFS or Raymond James.  All investments are subject to risk. There is no guarantee that these statements, opinions, or forecasts provided in the attached article will prove to be correct. Individual investor's results will vary. Past performance does not guarantee future results. Forward looking data is subject to change at any time and there is no assurance that projections will be realized. Any information provided is for informational purposes only and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. ~

Stocks Regain Ground as States Discuss Plans to Reopen

May 1, 2020    

Stocks Regain Ground as States Discuss Plans to Reopen  

Dear Clients and Friends:  

Globally, billions remain at home under some variation of COVID-related lockdowns and social distancing, a phrase many of us hadn’t heard or used up until this year. Unsurprisingly, this has affected just about every industry, from restaurants to airlines to the oil industry. Oil demand has dropped precipitously, prompting prices to briefly turn negative in April for the first time in history. While prices have begun to stabilize and governments are starting to ease lockdown policies, it will take a long time for oil demand to fully recover, explains Raymond James Energy Analyst Pavel Molchanov. “We anticipate COVID’s oil demand impact peaking in the second quarter, and then subsiding in the summer and especially toward the end of the year,” he added.  

Reopening state economies is a leading theme in the news, however, we believe that doing so will need to be done carefully and deliberately, most likely in phases, according to Washington Policy Analyst Ed Mills. Federal reopening guidelines are more restrictive than some might think in an attempt to stave off a resurgence in cases, which, of course, would hinder a return to large-scale economic normalcy. The timing of an economic restart remains up in the air, and there are still challenges around therapies, a possible vaccine, the impact on consumer behavior and the general trajectory of an economic recovery, adds Joey Madere, senior portfolio strategist, Equity Portfolio & Technical Strategy.  

In the meantime, the policy response has thus far activated close to $3 trillion to help people in need and bolster the economy, but lawmakers are not done yet. The scope and scale of another fiscal relief package will be heavily debated, but additional support for individuals, markets and the economy should arrive over the next few weeks, Mills notes.  

Despite deteriorating economic data (e.g., U.S. jobless claims increased by 26 million over a four-week span; consumer confidence declined to multi-year lows) as a result of stay-at-home orders to combat the coronavirus, risk assets moved sharply higher during April, explains Chief Investment Officer Larry Adam. Investors looked through the near-term halt in economic activity with increased optimism for a potential coronavirus therapeutic (Remdesivir). Market observers are also seeking more clarity regarding a timeline for the reopening of the U.S. economy.  

Record stimulus and a slowing of new COVID-19 cases has proved a more stable environment for U.S. equities, explains Madere. Stocks have continued to push higher, although they haven’t yet made up for the deep losses of last month and still ended April in negative territory. The S&P 500 climbed about 12.68% for April, while the Dow Jones rose about 11% and the Nasdaq delivered 15.45%. 


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Here is a look at some key factors we are watching, both here and abroad:  

Economy  

  • As mentioned above, economic data has taken a hit. Real gross domestic product fell at a 4.8% annual rate in the advance estimate for the first quarter, reflecting sharp declines in consumer spending (-7.6%) and business fixed investment (-8.6%), notes Chief Economist Scott Brown. Second quarter figures are expected to be much worse, as one in six American workers filed a claim for unemployment benefits over the six weeks ending April 25.

  • Following the April 28-29 policy meeting, Federal Reserve officials left short-term interest rates unchanged and retained their guidance that rates will remain low until the economy is firmly back on track. Fed Chair Jerome Powell said that the central bank will use its full range of tools to support the economy.

  • The economic outlook depends critically on the virus and efforts to contain it. As the economy begins to re-open, consumer spending will pick up, but gradually, and there is a risk of a second wave of infections that could lead to a longer period of social distancing. Once the virus is truly under control, the economy should improve significantly, but consumers may be reluctant to resume normal activities, Brown adds. 

Equities  

  • After dropping 34% from late February to  late March, the S&P 500 has been able to recover over half of its losses since then, but Madere believes the move has been too far, too fast. It is likely, in his view, that we’ll see a consolidation where the market can rebuild itself for a more durable path higher.

  • Earnings seasons is moving along, and the S&P 500 is expecting earnings contraction for the first quarter, mostly from the Energy, Consumer Discretionary, Financials, Industrials and Materials sectors. We’ve seen better performance from Health Care, Technology and Consumer Staples names. 

International  

  • Global equity markets outside of the United States also continued to build upon the stabilization seen toward the tail end of March, predominately on investor confidence about the economic outlook, according to European Strategist Chris Bailey.

  • COVID-19 cases appear to have peaked across most of Europe and East Asia. While we have seen unprecedented downward revisions to economic data as well as a large demand for wage subsidies and unemployment assistance, hopes of recovery have been boosted by both the magnitude of government/central bank responses and also the lack of a secondary infection wave in East Asia.   

Fixed income  

  • The bond market has calmed down considerably over the last couple of weeks. The 30-year Treasury is down 9 basis points from last month’s close, while all other yield curve points are within 3 basis points of where they closed in March. Municipal and corporate spreads have narrowed for the month, yet remain wide vs. pre-crisis levels, according to Chief Fixed Income Strategist Kevin Giddis and Doug Drabik, managing director for fixed income research.

  • Despite Treasury rates falling, municipal and corporate bonds have kept positive sloped curves with relatively wide spreads to maintain yield.

  • Demand for high-quality credits is strong. The market is also easing on concerns for the lesser credits as the government continues to provide support to facilitate more normalized trading. Government stimulus is contributing to lower yields and spreads as they bridge the dislocation, making loans more readily available for small to large businesses and municipalities. 

  • Interest rates on Treasuries are near historic lows across the yield curve and reinvestment risk is limited. New cash and cash flows for longer term strategic fixed income allocations may serve investors’ interests by pulling in maturities and reducing durations. Shorter holding periods will produce quicker reinvestment periods, thus positioning investors more strategically for an economic cycle turnover.

Bottom line  

  • Long-term investors may want to consider reserving some buying power to strategically add to positions during pullbacks.

  • From a fixed income perspective, this is a period to stick with high quality and conservative maturities, in general. 

We know life may feel very different from “business as usual” these days, but we hope you take some comfort in knowing your financial plan was tailored to your risk tolerance and ability to handle market volatility. Know, too, that we are thinking of you and your family and wishing you all good health.  

As always, please reach out with any questions you may have – about the markets, your financial plan or anything else that we may be able to help with. We want to hear how you’re holding up and look forward to speaking with you. Thank you for your trust in us.    

Sincerely,    

Matt Goodrich                                                       Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                      Co-Branch Manager, RJFS  

Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. Economic and market conditions are subject to change. The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 is an unmanaged index of small cap securities. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. An investment cannot be made in these indexes. Investing in the energy sector involves risks including the possible loss of capital, and is not suitable for all investors. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets.  

Chris Bailey is with Raymond James Investment Services, an affiliate of Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. Material prepared by Raymond James for use by its advisors. 

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2020 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc.  

Raymond James Financial Services does not accept orders and/or instructions regarding your account by email, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. Email sent through the internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all email. Any information provided in this email has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this email. This email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer. 

Falling Oil Prices Disrupt the Financial Markets

April 22, 2020    

Falling oil prices disrupt the financial markets  

Dear Clients and Friends:    

Lawmakers, business leaders and healthcare professionals around the country are searching for solutions to curtail the spread of COVID-19 and reopen the U.S. economy. In such challenging times, it can be difficult to know how to proceed. Because fluctuations in the financial markets may also give you cause for concern, We want to share with our valued clients the latest insights from the strategists at Raymond James.  

A sharp drop in the price of oil disrupted the financial markets this week, ending a record rally for equities. After the S&P 500 had its best 18-day performance since 1933, it’s not surprising to see the market digest those gains, Raymond James Chief Investment Officer Larry Adam said.  

“Equity markets do not move in a straight, uninterrupted line, especially in an environment predicated on headline news flow,” Adam said. “Continued uncertainty surrounding the timeline for the reduction of social distancing measures and the reopening of the economy, combined with an unprecedented decline in oil prices, led to an uptick in volatility.”  

Oil prices dropped precipitously because supply greatly exceeds demand at a time when travel is diminished and much of the world’s population is staying home to help curtail the spread of the virus. The price of West Texas Intermediate (WTI) crude oil – considered the benchmark for the price of oil in the United States – briefly went into negative territory.  

“The cause of this highly bizarre situation is a physical lack of storage,” said Raymond James energy analyst Pavel Molchanov. “Storage tanks around the world are becoming saturated.”  

The problem is especially severe at a storage hub in Oklahoma, where the WTI price is set. For now, Molchanov suggests the Brent price – considered the global benchmark – is a better reflection of oil industry fundamentals. The Brent price has come down, too, but is less affected by conditions at any single facility. It’s a strange reality to see oil prices so low at a time when many of us have nowhere to go.  

“In past decades, lower oil prices were beneficial to the economy,” Raymond James Chief Economist Scott Brown said. “Spending less to fill their gas tanks meant consumers had more money to spend on other things. But now we see big hits in energy jobs and capital spending when oil prices fall.”  

The sustainable solution to the oil glut is for demand to recover, but with billions of people around the world subjected to lockdowns or stay-at-home orders, no one should expect a “flip the switch” moment, Molchanov said.  

The reopening of the U.S. economy, it appears, will be similarly gradual. While state governments balance letting people return to work with the potential for increased COVID-19 cases, the federal government is expected to provide fiscal relief in the form of a fourth stimulus bill. Raymond James Washington Policy Analyst Ed Mills anticipates another $350 billion in funding for small businesses and $100 billion for the healthcare response to the virus.  

“While this is likely to be an interim step, we expect certainty around support for struggling businesses and the appetite for additional action on Capitol Hill to help provide ballast for the current market volatility,” Mills said.  

Adam, the firm’s chief investment officer, expects volatility will remain heightened for the near term.  

“Favorable news on the medical front – concrete evidence of a reliable therapeutic or vaccine – is the likely next catalyst to push the equity market higher,” Adam said. “Ultimately, assuming a modest rebound in both earnings and economic growth during the second half of the year, we expect the equity market to be higher relative to current levels over the next 12 to 24 months.”  

As we all look to stay abreast of the latest developments, we will continue to keep you updated with relevant, and hopefully, useful information. Meanwhile, you can find the latest on the coronavirus and market volatility here.  

Thank you for your trust in us.

 

Sincerely,  

                                         

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary. Past performance may not be indicative of future results.

Investing involves risk, and investors may incur a profit or a loss. Investing in the energy sector involves risks and is not suitable for all investors. All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change.  

Material prepared by Raymond James for use by its advisors.  

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2020 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.  

Raymond James Financial Services does not accept orders and/or instructions regarding your account by email, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. Email sent through the internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all email. Any information provided in this email has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this email. This email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer. 

Monday Morning Outlook 'Job Destruction'

Monday Morning Outlook

Job Destruction To view this article, Click Here

Brian S. Wesbury, Chief Economist
Robert Stein, Deputy Chief Economist
Date: 4/13/2020

Normally, we're not big fans of enhanced unemployment benefits. But the current severe economic contraction brought about by the Coronavirus and the government-mandated shutdowns of businesses meant to stop the disease is a completely different animal from a normal recession. It's not just that people are staying away from certain economic activities because of the virus: the government is requiring businesses to shut down, magnifying job losses across the country.

Initial jobless claims averaged 216,000 per week in the four weeks ending on March 7, before the shutdowns. That's a total of 863,000, which was very low by historical standards, particularly relative to the size of the labor force. In the four weeks since then, 17.1 million workers have filed claims, blowing away previous records.

Many of these layoffs were the direct result of the government forcing businesses to shut their doors. When people are being deprived of their livelihoods by government fiat it resembles a "taking" under the Fifth Amendment of the US Constitution. In this unique situation, unemployment compensation resembles a "just compensation" for that taking.

The problem is that the boost to unemployment benefits enacted by Congress is over-kill for many workers, leading to perverse incentives. For example, let's take a worker in California earning $46,700 per year. Normally, a layoff would give them six months of unemployment benefits at a rate of $450 per week, which is an annual benefit rate of $23,500, about half of what they were earning when they worked.

But Congress is now throwing in an extra $600 per week for unemployed workers, for four months. That means for four months these workers will get $1,050 in benefits per week, which translates into an annual benefit rate of $54,600, which is even more than they were earning when they were working!

Because the extra $600 is a flat extra benefit, the gap between what unemployed workers can get now versus what they were earning when they worked is even larger for lower-earning workers. And it's not just deep-blue states like California. In Texas, for example, unemployed workers who previously earned up to $58,000 per year will be better off unemployed, at least for the first four months.

Yes, as we've noted the extra benefits only last for four months. But it's hard to believe there won't be enormous political pressure to extend the length of those extra benefits come the summer when they'd otherwise expire. After all, the unemployment rate is still likely to be 10% or more.

Now think of what this means when we re-open the economy. Some workers will go back to work because they might fear their job disappearing if they hold-out. But many won't want to give up the higher payments and businesses will now be competing with government for workers at the same time they'll be digging out of a huge financial hole. In fact, many low margin businesses may not be able to afford those higher wages. Don't get us wrong; we like faster wage growth; what we don't like are government policies that create perverse incentives to avoid work once it becomes more available.

If wages go up because of bad policies that will leave less room for businesses to hire, leading to a more prolonged surge in unemployment and a slower return to the standard of living we had before the virus struck.

Early in the Great Depression, the Hoover Administration urged companies to maintain wages in spite of deflation. The idea was that if wages were kept high workers would have more purchasing power, boosting output. But workers who kept their wages were already getting a boost from falling prices. Meanwhile, firms that kept wages high wouldn't hire new workers. It made the Depression worse, not better. By boosting unemployment benefits, the government has put businesses in a position where they have to boost wages, indirectly making the same mistake as President Hoover.  

This report was prepared by First Trust Advisors L. P., and reflects the current opinion of the authors. It is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.

Follow Brian Wesbury
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Follow First Trust
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Sincerely,             

                               

Matt Goodrich                                                    Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC           Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                      Co-Branch Manager, RJFS  

The attached information was developed by First Trust, an independent third party. The opinions are of the listed authors at First Trust Advisors L.P, and are independent from and not necessarily those of RJFS or Raymond James.  All investments are subject to risk. There is no guarantee that these statements, opinions, or forecasts provided in the attached article will prove to be correct. Individual investor's results will vary. Past performance does not guarantee future results. Forward looking data is subject to change at any time and there is no assurance that projections will be realized. Any information provided is for informational purposes only and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. 

Here to help with new wellness and market resources

Dear Clients and Friends:

As the COVID-19 situation continues to develop, it’s difficult to even remember what day it is. One blends into the next. What does stay top of mind is the desire to stay connected, to let you know that we are wishing you and your family well. And that includes your emotional and mental health. We will keep sharing tips that we come across and will continue to reach out with the latest from Raymond James leaders who have their fingers on the pulse of the situation.

We know the news can be overwhelming, so we’ll only send you a curated selection – just enough to lend perspective and keep you informed.

Weekly Headings from CIO Larry Adam

We thought you’d enjoy the latest short video from Raymond James Chief Investment Officer Larry Adam. He highlights “10 encouraging signs amid this difficult market environment.” To help you prepare for the week ahead, Weekly Headings offers a glance at upcoming events and shares insights regarding the global economy and capital markets.

Weekly Market Guide from Mike Gibbs

For perspective on what’s going on in the markets, check out the latest portfolio strategy commentary in the Weekly Market Guide with Mike Gibbs, managing director of Equity Portfolio & Technical Strategy.  

Cares Act Resources   ​

You likely know someone whose livelihood or education has been impacted by the COVID-19 response. Here’s a brief glimpse at some assistance available through the Coronavirus Aid, Relief, and Economic Security, or CARES Act. The CARES Act is intended to combat the economic risks associated with a slowdown in individual spending and help businesses of all sizes avoid closures and employee layoffs. It also provides necessary funds to help support states and municipalities. Check out our latest digital resources:

For small businesses  

For students  

For healthcare providers and patients  

For those planning for retirement

We’d like to thank you for your continued trust but, perhaps more important, to send heartfelt gratitude to all those on the frontlines of essential services, those selfless individuals taking care of the sick, feeding us, stocking grocery shelves, and the countless volunteers who are working tirelessly on our behalf. Life is strange, but it’s inspiring to see our community continue to care for one another. Raymond James committed $1.5 million to support charitable organizations providing essential services like access to food and healthcare throughout communities affected by COVID-19.

As you know, we are doing our part to flatten the curve although we remain open for business. In the meantime, we’re also making a point to:

  1. Stay clean, close, calm and in touch via email, phone, social media and other electronic means. GoogleDuo, Marco Polo and  other video chat services should help.

  2. Set some boundaries. It is all too easy to be online and accessible 24/7. We strive to be as responsive as possible for our valued clients, but would still encourage anyone working remotely to get enough rest and step away from the computer on occasion. Only you know what is sustainable for you and your family, and your health and well-being should be top priority.

  3. Do something for others.  If you can, consider buying gift certificates to local retailers and restaurants in a show of solidarity. Buy tickets to future community events, including theater productions. Donate to artists, performers and arts venues if you can. Purchase items off your favorite charity’s wish list.

  4. Connect to the broader community. Many colleges and places of worship, for example, are holding online gatherings.

  5. Get some exercise. A brisk walk can clear your head, but there are also myriad online and streaming classes offered these days, from yoga to dance to guided meditations and everything in between. There are even classes aimed specifically at young ones (e.g., GoNoodle).

  6. Rest and relax. In addition to the usual streaming services, HBO Now and HBO Go are offering some programming for free and many zoos and aquariums are sharing adorable videos of animal interactions for the whole family to enjoy. We’re particularly entertained by those from the Shedd  and Florida aquariums. The National Parks are also offering virtual tours and live streams.

  7. Take care of the kids. In addition to all the teachers and administrators working tirelessly to educate our children, you can continue to feed their brains and spirits with free children’s books on Audible; a variety of podcasts; and Khan Academy classes.

  8. Learn something new. Coursera offers a lot of free educational content. Epicurious can help you feel more confident in the kitchen. Let us know what skills you sharpen!  

Though these uncertain times will last longer than any of us want, they won’t last forever. We will get through this. In the meantime, please don’t hesitate to reach out.  

Sincerely,  

                                         

Matt Goodrich                                                     Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC           Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                      Co-Branch Manager, RJFS              

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Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2020 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc.  

Raymond James Financial Services does not accept orders and/or instructions regarding your account by email, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. Email sent through the internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all email. Any information provided in this email has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this email. This email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer. 

CARES Act passes

March 31, 2020 

Dear Clients and Friends:  

From rebate checks to small business support, there’s a lot packed into the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was signed into law on Friday. The $2+ trillion emergency fiscal stimulus package is intended to mitigate some of the economic effects of dealing with COVID-19.  

Here’s a look at some of the key provisions.  

  1. A check – Based on income and family makeup, most Americans can expect to receive $1,200 individually ($2,400 for joint filers) and $500 per dependent. Amounts  phase out for those who reported adjusted gross incomes over $75,000 for individuals and $150,000 for joint filers in 2018 or 2019.  

  2. A buffer – The CARES Act eliminates the 10% early withdrawal penalty for coronavirus-related distributions from retirement accounts. Withdrawn amounts can be repaid to the plan over the next three years. In addition,  required minimum distributions (RMDs) are waived for 2020. Investors who have already taken an RMD for 2020 have options that may include returning the amount or rolling it over, as long as the distribution was not made from a beneficiary IRA.  

  3. Support for small businesses – In the form of more than $350 billion, including forgivable loans (up to $10 million) to help keep the business afloat, a paycheck protection plan and grants.  

  4. Expanded unemployment benefits – Unlimited funding to provide workers laid off due to COVID-19 an additional $600 a week, in addition to state benefits for up to four months. This includes relief for self-employed individuals, furloughed employees and gig economy workers who have lost work during the pandemic.  

  5. Fortified healthcare – $100 billion is allocated to hospitals and other health providers to help offset costs and provide relief. In addition, the legislation provides funding for numerous other areas including state and local COVID-19 response measures, an increase  to the national stockpile for medicine, protective equipment, medical supplies and additional FEMA disaster relief funding.  

  6. Enhanced education – $30 billion to bolster state education and school funding, as well as the deferral of federal student loan payments through the end of September.  

  7. State and local government funding – $150+ billion allocated to “state stabilization funds” to combat the pandemic and economic crisis and provide supplemental funding for joint state-federal programs like unemployment compensation and Medicaid.  

  8. Other provisions – A $500 billion buffer for impacted and distressed industries and general economic support, with loan guarantees for medium to large businesses, as well as states and municipalities. This includes specific provisions for airlines, air cargo and national security organizations. The Economic Stabilization Fund is intended to provide loan support for businesses/nonprofits between 500 and 10,000 employees with the interest rate capped at 2% and forbearance on federally backed loans for 60 days.  

What’s next? Treasury Secretary Steven Mnuchin has targeted early April to deliver the funds. Discussions are starting in D.C. around a possible next phase of economic relief, although it’s just talk for now.  

We’ll continue to keep you updated with relevant, and hopefully, useful information. You can find the latest on efforts to battle the pandemic here.  

Thank you for your trust in us.    

Sincerely,           

                               

Matt Goodrich                                                Larry Goodrich, CFP ®

President, Goodrich & Associates, LLC       Vice President, Goodrich & Associates, LLC

Branch Manager, RJFS                                  Co-Branch Manager, RJFS  

Investing involves risk, and investors may incur a profit or a loss. All expressions of opinion reflect the judgment of Raymond James and are subject to change. There is no assurance that any of the forecasts mentioned will occur. Economic and market conditions are subject to change.  

Material prepared by Raymond James for use by its advisors. 

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. © 2020 Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.  

Raymond James Financial Services does not accept orders and/or instructions regarding your account by email, voice mail, fax or any alternate method. Transactional details do not supersede normal trade confirmations or statements. Email sent through the internet is not secure or confidential. Raymond James Financial Services reserves the right to monitor all email. Any information provided in this email has been prepared from sources believed to be reliable, but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. Raymond James Financial Services and its employees may own options, rights or warrants to purchase any of the securities mentioned in this email. This email is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this message in error, please contact the sender immediately and delete the material from your computer. 

Cut the Politicians' Pay

First Trust

Economic Research Report

www.ftportfolios.com

March 23, 2020

The government-mandated shutdown of business, and the massive drop in economic activity it is causing, may actually do more harm to the United States than the coronavirus itself. Early estimates suggest the U.S. economy will contract at a staggering 20% annualized rate in the second quarter, and the number may move even higher. Despite multiple recessions, global wars, the avian flu, SARS, 9/11, and natural disasters, the U.S. hasn't experienced a quarterly drop in activity like this since the Great Depression.

The unemployment rate is likely to double from 3.5% to 7% in the coming months, representing a loss of more than 5 million jobs. And the longer the shutdown lasts, the further that number is likely to rise. Few businesses have cash hoards that can tide them over for this drastic a decline in activity. People are coming up with creative solutions, stopping rent and loan payments, but there isn't enough money in most business coffers to survive a trillion-dollar drop in economic production. The greater the number of businesses that don't survive, the slower the path to recovery when this global tragedy passes.

Tax payments to federal, state and local governments will fall precipitously, and many government entities will face serious financial challenges (if they didn't already). Illinois, for example, still has billions of dollars of unpaid bills, not to mention a severely underfunded pension system. A 10%-to-20% drop in tax revenue makes these problems that much worse. And every extra day the shutdown continues, the deeper the hole is dug.

The Federal Reserve -- never one to stand on the sidelines -- has pumped trillions of dollars into the economy. But let's face it, low interest rates and cash can't fix a virus; they are simply a stopgap measure to keep markets liquid while business and asset prices decline. Congress is working on what could be a $2 trillion bailout package that would grow the size of federal government spending by 45% this year -- money that will eventually have to be paid back.

The government's reaction is being driven by models that are highly uncertain. Fear and panic by the masses are amplified by poor reporting of the data. For example, we hear that coronavirus cases in the U.S. are doubling every "x" number of days. While technically correct, this is also misleading. We have significantly ramped up testing, and as should be expected, we are finding cases in larger numbers, rapidly. The data show us how fast we are finding cases, not how rapidly the virus is really spreading.

The governor of California said the other day that 25.5 million (56%) of his state/s citizens will get the virus. This is a model-based estimate, generating a number that no country in the world has come even remotely close to realizing. Add in the changes in behavior and shutdowns of activity, and it looks logically preposterous. But politicians have an incentive to use the worst-case models, and assumptions of unusually high and long-lasting spread rates, even though we know every virus follows a bell-shaped curve. I don't disagree with those who say "one life lost" is too many. But we don't stop driving because of the chance, albeit small, of serious injury or death when behind the wheel.

We have to start trusting individuals, as we do in so many other areas of life. We have all learned that our most effective measures to prevent the spread of disease are to wash our hands, not touch our faces, and stay away from others if you (or they) are sick. What individuals can't do is fight a massive recession. You can reduce the odds that your family is affected by a virus, but when you lose your job because the government shuts down the economy, your problems are far more likely to multiply. The government does not create wealth – it never has – and cannot possibly offset every dollar of damage.

We know that recession and unemployment hurt the health of citizens – emotionally and physically. At the same time, the shutdown of the economy will reduce the wealth of the U.S. over time, grow the government, and lead to fewer resources in the long run to deal with future economic problems. This is one of the issues facing Italy and other countries, which have been growing slower than the U.S. for decades, and which, as a result, have underinvested in health care.

The sooner we open America up for business, the less the economic damage, and the better off we will be in the long run. Viruses kill people every day. If not this one, then another. Giving up our freedom due to fear is a price we will pay for generations. The secondary economic effects, too, could be significant. We are holding back the supply of goods, while the government sends money out to stimulate demand. This will likely lead to price increases, then government price controls to fix "price gouging," which in cases like Venezuela have been shown to increase "hoarding" and further reduce supply.

To focus the minds of our politicians who are shutting down the economy, we should stop paying them as long as the shutdown lasts. Government employees keep getting paid, while millions of Americans will lose their jobs. They "solve" the problems they helped create, by spending other people's money. Businesses – free markets -- are chastised, destroyed, casualties left in the wake. But they are the only ones that, if they can weather the shutdown, will be able turn the economic tide.

Our politicians and bureaucrats need to get creative. Let experimental drugs move ahead rapidly. Allow restaurants to open at 50% capacity, increasing the distance between tables. Allow people to create safer working environments on their own, letting only a few shoppers in at a time, wiping down counters, etc. The government needs to focus on building up hospital capacity, protecting those who are at high risk – the elderly and those with underlying conditions -- but we need to let others get back to work.

Remember, unless we stop all personal interaction, we are essentially deciding certain risks are necessary. Shutting down "non-essential" business slows the spread of the virus but does not stop it. The same calculus needs to be done for the risk coming from economic damage. Unfortunately, unless we can share the economic damage with our politicians, they won't be willing to make that calculation. 

Brian S. Wesbury - Chief Economist  First Trust


 

Fiscal Stimulus - What's Been Done And What Is in Progress?

March 18, 2020

Congressional leadership is working to develop a large-scale stimulus package that can win bipartisan support.

Washington Policy Analyst Ed Mills and Healthcare Policy Analyst Chris Meekins weigh in.

Tuesday’s pivot toward a broad fiscal stimulus plan in the $1+ trillion range is a market-positive development, which was not a given at the beginning of this week. The package under discussion would provide Americans with a check of an amount to be determined as an initial boost for households and consumers.

Negotiations on this provision will focus on targeting the funds to certain income levels. We will be watching to see what income thresholds become the baseline in the coming days, or if other provisions such as refundable tax credits and expanded unemployment assistance are added to the direct payment section of the bill. President Trump, Secretary Mnuchin and Speaker Pelosi signaled agreement on the need for targeting in this respect on Tuesday. The broad agreement is a positive – the details will be the difficult part.

There appears to be broad agreement on boosting support for small businesses through loans via the Small Business Administration (SBA) and other relief in the amount of $250 billion. Support for the airline industry is currently projected to be in the $50 billion range and support for other businesses is also being discussed in the $50 billion range (with tax credit and net operating loss [NOL] carryforward provisions being discussed).

See below for a breakdown of Congressional relief measures that are currently active or in the negotiations stage.

Phase One

Title: Coronavirus Preparedness and Response Supplemental Appropriations

Act Cost:  $8.3 billion

Status: Law as of March 6

Highlights:Outbreak preparedness and response. $6.7 billion for U.S. agencies to respond to outbreak and research therapies. Expanded research and development. $3.1 billion for the U.S. Department of Health & Human Services (HHS) Public Health and Social Services Emergency  Fund. State and local resources. $2.2 billion to the Centers for Disease Control and Prevention (CDC) for response effort. Therapies and vaccines. $836 million for National Institutes of Health (NIH) response effort.International outbreak support. $1.6 billion for international response.

Phase Two

Title: Families First Coronavirus Response Act Cost: $100 billion (estimated)Status: Passed by the House on March 14; awaits Senate action.

Highlights: Free testing. Free testing for everyone who needs a COVID-19 test, including the uninsured. Paid sick leave. 14 paid sick days for businesses with fewer than 500 employees, partially reimbursed with a tax credit ($5,110 aggregate total).Food assistance. $900 million in nutrition assistance will be provided for students who are out of school and assistance for food banks and seniors. Unemployment assistance. Additional funding for states that experience a 10% increase in unemployment. Expanded Family and Medical Leave (FMLA). Expands existing FMLA protections that provide up to 10 weeks of time. Pay is 2/3 of monthly earnings up to $10,000 aggregate cap. Only applies to companies with fewer than 500 employees. Healthcare worker protections. Expanded federal safety and health protections for frontline healthcare workers.

Phase Three

Title: Pending

Cost: $800 billion to $1+ trillion (estimated)

Status: Negotiations ongoing, led by the Senate

Highlights: Payments to individuals. Cash infusion for consumers (potentially in $1,000 range). Payments may be provided multiple times. $250 billion initial payment to individuals, second $250 billion in payments at a later date. Targeted relief for airlines, potentially in the $50-60 billion range. Targeted relief for hotels, possibly. Targeted relief for cruise lines, possibly. Small business support. Expanded small business loans, potentially in the $250 billion range.

Phase Four

Title: Pending

Cost: $8+ billion (estimated)

Status: Still in the discussion phase; phase three response is the current priority

Highlights: Secretary Mnuchin has signaled the administration will ask for another emergency federal funding bill for agencies to mitigate the spread of the virus and implement some of the Trump administration executive actions.

Source: Raymond James research -
All expressions of opinion reflect the judgment of Raymond James & Associates, Inc., and are subject to change. Economic and market conditions are subject to change.~