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Daily Capital

Weekly Market Digest: What’s in the $900 Billion Coronavirus Relief Bill?

This post was written at the close of business on December 24, 2020.

Despite the year-end holiday season, this week was filled with events that will significantly impact many of us throughout the coming months and years.

A second version of the coronavirus vaccine by Moderna was made available this week, helping to drive an initial wave to inoculate the most at-risk U.S. citizens. 

In the UK news of a potentially more infectious strain of the coronavirus contributed to market choppiness throughout the week, though initial reports are that it is no more resistant to vaccines. 

Congress passed a second relief package for Americans, after months of delays, and as of this writing, President Donald Trump had not signed the package into law, surprising both sides of Congress.

On Wednesday the U.S. Department of Commerce reported on some key statistics that illustrate the continued impact the coronavirus is having on the U.S. economy; household spending decreased in November, alongside a continued decline in household income. Home sales also declined in November when compared to the prior month. The Department of Commerce attributed some of these declines to the wind down of pandemic assistance programs. 

A conclusion was also reached this week for Brexit, with the announcement of a trade agreement between the UK and EU.

Weekly Returns

S&P 500: 3703.1 (-0.16%)

FTSE All-World ex-US(VEU): (-1.3%)

US 10 Year Treasury Yield: 0.93% (-1.79%)

Gold: $1,879.99 (0.0%)

EUR/USD: 1.218 (-0.6%)

Major Events

  • Monday – Tesla officially joins the S&P 500.
  • Monday – President-elect Joe Biden is administered the coronavirus vaccine, an event that was televised.
  • Tuesday – President Trump voices displeasure with Congress’ second elief package, calling into question whether the package will be passed into law before Congress adjourns.
  • Tuesday – The U.S. Securities and Exchange Commission approves a New York Stock Exchange plan to allow “direct listing” – giving companies that plan to IPO a more accessible alternative option to the traditional process. Traditional IPOs usually grant institutional investors access to new companies before individual investors.
  • Wednesday – The U.S. Department of Commerce reports a decrease in consumer spending in November, the first decrease since April of 2020. 
  • Wednesday – President Trump issues an additional 26 pardons and commutations. 
  • Thursday – The EU and UK reach an agreement on Brexit, which kicked off back in 2017. 
  • Friday – Markets are closed for Christmas Day.

Our Take

While the newest stimulus package is not yet law, we are taking a moment to point out some things in the bill that will impact investors and the markets:

  • $325 billion is allotted to small businesses, including an expansion to the paycheck protection program from the first relief bill.
  • $166 billion would be paid to individuals, with $600 paid to each adult, and $600 paid for each dependent. Households with more than $75k in income (single) and $150k in income (married) will be phased out on these payments.
  • $120 billion would be paid in enhanced unemployment benefits: benefits would be expanded to groups that would otherwise not receive unemployment, the duration of unemployment payments would be expanded, and an additional $300/week amount for unemployment benefits would be available. 
  • $82 billion would be used to support both public and private schools in the United States.
  • $55 billion would go to vaccinations, testing, and tracing for the coronavirus.
  • $25 billion would be used for rental assistance to support individuals behind on their rent.
  • $10 billion would go towards childcare providers.

The scope and breadth of the second relief program is large by some measures, and small by others. 

We wish all our readers a safe and happy holiday season.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Paul is a Certified Financial Planner® and has been with Personal Capital since they first moved to Denver in 2013. With over a decade of industry experience, Paul’s current role as Director of Advisory Service keeps him focused on a team of over 60 Financial Advisors and their clients.
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