After one of the worst weeks in the history of the major markets, the Dow Jones led the pack higher. The Dow marked the largest weekly return since the Great Depression, reclaiming 12.84%. The Dow opened sharply lower on Monday, trading down to 18,213. As the week progressed, it reached the intraweek high of 22,595 only three days later, reflecting a gain of 24%.
Despite the weekly double-digit gains in the Dow and the S&P 500, the Major Markets still sit at a loss of around 20% for the year.
The gains were fueled by the news of a government stimulus bill that ultimately passed into law on Friday the 27th. Single adults with income up to $75,000 will get a $1,200 check. Married couples with income up to $150,000 will get a $2,400 payment. Head of household single parents who make up to $112,500 annually will get the full $1,200 check. Additionally, Americans who qualify for the stimulus payment and have children will get an additional $500 per child under 17.
Payments will be reduced by $5 for every $100 over the $75,000 threshold for single adults and $150,000 for married couples. This means that single adults that earn over $99,000 and married couples who earn over than $198,000 will not be receiving a check. The stimulus check eligibility will be determined based off of the 2018 or 2019 tax returns, whichever was filed last.
The need for government intervention was deemed to be especially vital given the record number of layoffs nationwide. Reuters estimated that a record 1.5 million people would file initial jobless claims ahead of last week’s report. This estimate was more than double the prior recorded reading of 695,000 from 1982. However, that estimate served to be too conservative, as 3.28 million claims were reported on Thursday. This was more than double Reuters’ estimate, and 4.7 times higher than any other reading in the history of the claims.
This week, the ADP and BLS Employment reports will give further insights into the national employment situation.
On Thursday, Fed Chairman Jerome Powell went on the Today Show and said that “We may very well be in a recession…” but that “there is nothing fundamentally wrong with our economy” highlighting the dichotomy of the current economic situation in the midst of the Coronavirus pandemic.
The United States has now become the highest number of confirmed cases of COVID-19, surpassing Italy and Spain, which have also passed the reported number of cases in China.
On Sunday, President Trump extended social distancing guidelines beyond Easter to April 30th in the hopes that these unprecedented measures would further slow the spread and reduce the total number of deaths due to the virus.
Courtney, and Joe. “H.R.748 - 116th Congress (2019-2020): CARES Act.” Congress.gov, 27 Mar. 2020, www.congress.gov/bill/116th-congress/house-bill/748.
TodayShow. “Fed Chairman Jerome Powell: 'There's Nothing Fundamentally Wrong with Our Economy'.” TODAY.com, www.today.com/video/fed-chairman-jerome-powell-there-s-nothing-fundamentally-wrong-with-our-economy-81231429587.
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