Commentary 3/30/2020
March 30, 2020
The Markets
The United States set some records last week.
First, we became the epicenter of the COVID-19 pandemic. Popular Science explained:
“An increase of 15,000 known cases in just one day pushed the United States past Italy and China, making it the new epicenter of the pandemic…Experts suspect the actual number of U.S. cases is much higher than currently reported…the United States has tested a far lower percentage of its large population than other hard-hit countries.”
On Friday, March 27, the Centers for Disease Control (CDC) reported there were 103,321 confirmed cases and 1,668 deaths in the United States.
Second, as businesses across the country closed, leaving many workers without income, first-time claims for unemployment benefits hit an all-time high of 3.3 million. The previous record of 695,000 was set in 1982, during one of the deepest recessions the United States had experienced to date.
Third, Congress passed the biggest aid package in history. The $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law last week. The CARES Act authorizes financial support for workers and businesses, including:
Relief checks. If you earn less than $75,000, and file taxes singly, you can expect a one-time payment of $1,200. If you’re married, you and your spouse will each receive a check. Children will receive $500 each. Social Security benefit recipients will receive checks, too.
Higher unemployment benefits. CARES raised unemployment benefits by $600 a week for four months.
Tax credits for businesses that keep paying employees. Businesses of all sizes are eligible for a tax credit intended to keep workers on the payroll. The credit is up “to 50 percent of payroll on the first $10,000 of compensation, including health benefits, for each employee,” reported NPR.
U.S. stock markets rallied on the news. Some speculated the shortest bear market in history had ended, but Randall Forsyth of Barron’s cautioned, “To anybody who has been around for a market cycle or more, that pop was the very essence of a bear-market rally, and such rallies are the most violent.”
Major U.S. indices moved higher during the week.
PRACTICAL ADVICE FOR HANDLING PACKAGES AND GROCERIES. The Washington Post published an article written by Joseph G. Allen, an assistant professor of exposure and assessment science at Harvard’s School of Public Health. Allen explained precautions to take to prevent disease transfer from packages and groceries. (Yes, coronavirus can live on a surface, but the risk of disease transmission is low.)
Here are some of Allen’s suggestions for handling delivery packages:
• Leave packages outside or bring them inside and leave them by the door for several hours.
• Wipe down package exteriors with disinfectant.
• Unwrap packages and leave the packaging in the recycling can.
• Wash your hands after touching a package.
Allen also offered suggestions for grocery shopping:
• Stay six feet from other shoppers.
• Don’t touch your face while shopping.
• Put your groceries away.
• Wipe anything you are using immediately with disinfectant. (Clean all grocery packages before you put them away, if it makes you more comfortable.)
• Wash your hands after putting groceries away.
• Wash fruits and vegetables before using.
So, how many hours is enough hours to wait? Allen explained the findings of an article in the New England Journal of Medicine. “…the virus’s half-life on stainless steel and plastic was 5.6 hours and 6.8 hours, respectively. (Half-life is how long it takes the viral concentration to decrease by half, then half of that half, and so on until it’s gone.)”
FINDING HUMOR IN A TIME OF STRESS. In Time’s article, ‘Laughter Helps the Brain Relax. How Humor Can Combat Coronavirus Anxiety,’ William Kole offered some insights to the importance of humor:
“Neil Diamond posts a fireside rendition of ‘Sweet Caroline’ with its familiar lyrics tweaked to say, ‘Hands … washing hands.’ A news anchor asks when social distancing will end because ‘my husband keeps trying to get into the house.’ And, a sign outside a neighborhood church reads: ‘Had not planned on giving up quite this much for Lent.’ Are we allowed to chuckle yet? We’d better, psychologists and humorists say. Laughter can be the best medicine, they argue, so long as it’s within the bounds of good taste.”
When you’re feeling overwhelmed, it can help to spend some time with the work of your favorite comedian, satirist, or cartoonist.
Weekly Focus – Think About It
“Apparently there is nothing that cannot happen today.”
–Mark Twain, Humorist
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1. Financial support from banks and financial companies. Americans who find themselves without work or working fewer hours may want to contact their banks. CNBC reported some banks and financial companies are willing to provide support during this difficult time, including:
• Deferring payments on mortgage, auto, and other personal loans
• Deferring payments on small business loans
• Waiving customer overdraft, expedited check, and debit card fees
• Waiving customer fees on excessive savings account withdrawals
• Waiving penalties for early withdrawals from certificates of deposit
• Refunding overdraft, insufficient funds, and monthly maintenance fees for bank and small business customers
• Pausing foreclosures, evictions, and repossessions
• Offering economic disaster loans
Customers must contact their banks to request support.
2. Tax Day postponement to July 15. The Internal Revenue Service pushed the 2019 tax filing deadline from April 15, 2020 to July 15, 2020. The three-month delay is intended to help Americans cope with the financial effects of COVID-19, reported CNBC. If you expect a refund, you may want to file sooner.
It is unclear whether 2019 contributions to IRAs must be made by April 15, 2020. Also, the deadline for filing taxes in your state may remain unchanged. Check with your state’s treasury office.
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Sources:
https://www.popsci.com/story/health/united-states-covid-19-coronavirus-cases/
https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html
https://www.dol.gov/ui/data.pdf
https://www.pewresearch.org/2010/12/14/reagans-recession/
https://www.reuters.com/article/us-health-coronavirus-usa-congress/historic-2-2-trillion-coronavirus-bill-passes-u-s-house-headed-to-trump-idUSKBN21E1CM
https://www.npr.org/2020/03/26/821457551/whats-inside-the-senate-s-2-trillion-coronavirus-aid-package
https://www.appropriations.senate.gov/imo/media/doc/FINAL%20FINAL%20CARES%20ACT.pdf
https://www.barrons.com/articles/bear-market-rally-doesnt-mean-stocks-will-revive-quickly-51585358951?mod=hp_LEAD_3 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/03-30-20_Barrons-Bear-Market_Rally_Doesnt_Signal_Quick_Revival_for_Stocks-Footnote_8.pdf)
https://www.cnbc.com/2020/03/26/stock-market-futures-open-to-close-news.html
https://www.washingtonpost.com/opinions/2020/03/26/dont-panic-about-shopping-getting-delivery-or-accepting-packages/ (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/03-30-20_TheWashingtonPost-Dont_Panic_About_Shopping_Getting_Delivery_or_Accepting_Packages-Footnote_10.pdf)
https://time.com/5811041/laughter-humor-coronavirus/
https://www.brainyquote.com/quotes/mark_twain_122786
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