Ooh, boy. Was your seatbelt buckled Thursday? We hadn’t seen a market selloff like that since March.
By the end of day, the Dow had jettisoned 1,800 points or about 5%, and the S&P 500 was down about the same percentage.
Who knows why… We’ve seen the market’s rout attributed to everything from spiking coronavirus cases to brokerage-app speculators to Fed jitters.
At Wednesday’s FOMC meeting, the Fed said it will stay put on interest rates while continuing to buy Treasuries and mortgage-backed securities.
But Fed Chair Powell was kind of a downer when it comes to unemployment, saying: “My assumption is that there will be a significant chunk, well, well into the millions of people who don’t get to go back to their old jobs and there may not be a job in that industry for them for some time,” he said.
“It could be some years before we get back to those people finding jobs.”
In the meantime, the federal stimulus money — $600 per week — guaranteed through the CARES Act ends next month
What, if anything, will replace it?
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Your Rundown for Friday, June 12, 2020
Scrambling for an Unemployment Cure-All
According to Market Watch: “The supplemental $600 Americans receive has been controversial, especially given that two-thirds of laid-off workers receive more money from their unemployment benefits than they did from their jobs.”
But, as we said, that $600 goes away in July; however, that doesn’t mean unemployment is going to magically go away, despite most states reopening for business.
There are three options on the table: “two of which would allow unemployed Americans to receive additional funds on top of state unemployment benefits. But one calls for just the opposite — a return-to-work bonus,” Market Watch says.
First, the HEROS Act, that passed in the House of Representatives, proposes extending the $600 weekly payments through Jan. 2021.
Expensive, no? And likely counterproductive. Literally.
The second option, called the Worker Relief and Security Act, “would allow Americans to continue to receive the additional $600 benefit for as long as the national emergency or state emergency for COVID-19 is in effect.
“Once the national or state emergency is terminated, jobless Americans would receive benefits based on their state’s unemployment level.” So… like a sliding scale.
The third proposal comes from Ohio Senator Rob Portman. “He’s proposing a back-to-work bonus, which would provide an additional $450 a week for Americans who return to work.”
“Given that more than 15 million unemployed Americans are categorized as ‘temporary layoffs,’” Sen. Portman says, “we need to be sure that there’s no financial disincentive for these individuals to get back into the workforce when those jobs become available to them again.”
Let us know what you think, readers. Favor one option over another? Or do you think there’s a different option altogether?
Market Rundown for Friday, Jun. 12, 2020
The S&P 500 index is up 68 points to 3,071.
Oil’s up 1% to $36.75 for a barrel of WTI.
Gold’s added $10.80 per ounce to $1,750.60.
Bitcoin is up $215 to $9,493.
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Hope you have a great weekend. We’ll talk more Monday.
For the Rundown,