A summary of financial, economic, and other news
Major U.S. stock indices have fallen for three consecutive weeks. The downturn may continue reported Randall Forsyth of Barron’s,
“…major investors may have to rebalance portfolios, paring stocks after the third-quarter rally, J.P. Morgan notes. That could lead to selling $200 billion of equities by U.S. pension funds, the Norwegian oil fund, and the Japanese government pension fund. This rebalancing, the biggest since the pandemic began, could be especially disruptive in view of the reduced stock market depth the bank sees.”
Here’s what’s been happening:
- RIP RBG. “Ruth Bader Ginsburg, a trailblazer who fought for gender equality as a lawyer and became a beloved hero of the progressive movement as a justice, died on Friday of complications from pancreatic cancer…During her tenure on the court, Ginsburg sometimes influenced decisions even when she didn’t write them…But it was Ginsburg’s dissents – and the ornamental collars, known as jabots, that she wore over her judicial robes on the days that her dissents were announced – for which she was arguably best known…Ginsburg has described other dissents as ‘appealing to the intelligence of a future day”’…”
SCOTUS blog, September 18, 2020
- Is the recession over? It would be wonderful news. When looking at projections for economic growth that appears to be the case. The Federal Reserve’s latest (more optimistic) forecast projects that the economy will shrink 3.7%, and unemployment will be 7.6%, by the end of 2020. The next year, it anticipates the economy will grow 4% and unemployment will fall to 5.5%. There is a caveat. Fed Chair Jerome Powell said, “…the overwhelming majority of private forecasters who project an ongoing recovery are assuming there will be a substantial additional fiscal support.”
- Maybe that’s why stimulus talks resumed last week. For two months, Congress has failed to agree on, much less pass, a new stimulus bill. Last week, they were reportedly back at the table after President Trump tweeted, “Go for the much higher numbers, Republicans, it all comes back to the USA anyway (one way or another!).”
- Like peanut butter and jelly. Despite its optimistic projections for economic growth, the Federal Reserve confirmed economic recovery is linked to Covid-19. “The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.”
- Restaurants innovate. During the first two weeks of July, just 12% of Americans said they had eaten inside a restaurant, and 9% had eaten outside at a restaurant, during the past 24 hours. (Youth and political affiliation appeared to influence the decision.) Restaurants have been innovating to survive. In addition to offering curbside pick-up, delivery, and food trucks options, restaurateurs have been building brands and loyalty with rewards programs, cooking videos, and recipe sharing.
- Americans who can save may save until a vaccine arrives. About half of Americans participating in a recent survey said they were setting money for the future. When presented with six hypothetical circumstances that might inspire them to begin spending like they did before the pandemic, participating indicated an effective Covid-19 vaccine would be most likely to influence their spending behavior. That’s important because consumer spending drives American economic growth.
- Beware the beer tax. What’s better than a nice cold brew at the end of a long day? A low tax, cold brew. About 40% of the price of your beer pays for taxes. As with many things, beer tax varies from state to state. The states with the highest tax on beer are Tennessee, Alaska, and Hawaii. The states with the lowest tax are Wyoming, Missouri, and Wisconsin.
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