Trump COVID, Relief Bill: O2 Wealth Economic Update, Oct. 2, 2020

U.S. and World News

  • iStock-1254730442President Trump is reportedly experiencing “mild symptoms” after he and first lady Melania Trump tested positive for coronavirus late last night. One of the President’s closest advisors, Hope Hicks, tested positive for the coronavirus on Thursday evening which prompted immediate testing for everyone that has been in close contact with her. President Trump and the first lady will begin a quarantine process that involves the both of them remaining in the White House while he continues to handle his duties similar to the way Canada’s Prime Minister Justin Trudeau did when he contracted the virus in March. All of the White House officials who have been in contact with the President, some members of the House of Representatives, and Presidential Candidate Joe Biden have all tested negative for coronavirus today. Economic Advisor Larry Kudlow told reporters that the President would take at least 10 days off the campaign trail. The news certainly calls into question the debate scheduled for October 15th in Miami Florida, as it is likely he will remain isolated. The Vice Presidential debate, however, is scheduled to take place as planned on Wednesday in Salt Lake City Utah as Pence’s physician stated that per CDC guidelines, he doesn’t need to quarantine.
  • Congress remains far from reaching a deal as negotiations for another coronavirus related relief bill continued this week. Republicans have voiced opposition to the scale of aid proposed by the Democrats for state and local governments while the Democrats are pushing for an end to tax breaks. After accounting for the differences between the two sides, they remain apart by about $600 billion for a comprehensive relief package. House Democrats passed their $2.2 trillion HEROES Act late Thursday night, which lacks bipartisan support. There was a glimmer of hope early Friday after Pelosi announced that she is urging airlines to delay planned furloughs, as an agreement is “imminent” on government assistance, but Congress later adjourned with no deal.

Markets

  • Markets rebounded this week. The S&P 500 rose 1.54% and closed at 3,348. The Dow Jones jumped 1.88% and closed at 27,683. Year-to-date, the S&P 500 is up 5.12% and the Dow Jones is down -1.25%.
  • Interests rates rose this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.28% and 0.69%, respectively.
  • The spot price of WTI Crude oil fell significantly this week. Prices fell -8.10% and closed at $36.99 per barrel. Year to date, Oil prices are down -39.42%.
  • The spot price of Gold rose 2.15% and closed at $1,901.67 per ounce. Year to date, Gold prices are up 25.73%.

Economic Data

  • Initial jobless claims fell to 837,000 and the four-week moving average of claims fell by 12,000 to 867,000. Claims fell by 10,000 in Florida, 8,000 in Texas, and by 6,000 in Georgia. Claims rose by 3,000 in Maryland, 2,000 in New Jersey, and by 2,000 in Illinois.
  • Retail inventories rose by 0.8% versus expectations for an increase of 1.1%
  • Wholesale inventories rose by 0.5% versus expectations for a decline of -0.1%
  • The ISM manufacturing index fell by 0.6 points to 55.4 versus expectations for a reading of 56.5
  • Construction spending rose by 1.4% versus expectations for an increase of 0.7%
  • Factory orders rose by 0.7% versus expectations for an increase of 0.9%
  • The University of Michigan’s index of consumer sentiment rose by 1.5 points to 80.4 versus expectations for a reading of 79.0
  • The Conference Board index of consumer confidence rose by 15.5 points to 101.8 versus expectations for a reading of 90.0
  • Nonfarm payrolls rose by 661,000 versus expectations for an increase of 859,000
  • Average hourly earnings rose by 0.1% versus expectations for an increase of 0.2%
  • The unemployment rate came in at 7.9% versus expectations for a reading of 8.2%
  • Private sector employment in the ADP rose by 749,000 versus expectations for an increase of 649,000
  • The third estimate of second quarter GDP was revised higher by 0.3% to -31.4% versus expectations for a reading of -31.7%
  • The core PCE price index rose by 0.33%, in-line with expectations and the year-over-year rate rose by 1.59% versus expectations for an increase of 1.40%
  • Personal income fell by -2.7% versus expectations for a decline of -2.5%
  • Personal spending rose by 1.0% versus expectations for an increase of 0.8%
  • Pending home sales rose by 8.8% versus expectations for an increase of 3.1%

Fact of the Week

  • Over the last 30 years, the S&P 500 stock index has gained an average of +4.7% over the final 3 months of the year. 24 of the last 30 fourth quarters have produced a positive total return gain (Source: BTN Research)

Rich Gartelmann CFP® – (630) 844-5730 rgartelmann@oldsecond.com
Steve Meves CFA® – (630) 801-2217 smeves@oldsecond.com
Brad Johnson CFA®, CFP® – (630) 906-5545 bjohnson@oldsecond.com
Jacqueline Runnberg CFP® – (630) 966-2462 jrunnberg@oldsecond.com
Ed Gorenz – (630) 906-5467 ejgorenz@oldsecond.com
Mike Demski – (630) 966-2430 mdemski@oldsecond.com
Mike Cava CFA®, CFP® – (630) 281-4522 mcava@oldsecond.com

Visit Old Second Wealth Management

Non-deposit investment products are not insured by the FDIC nor any govt agency; not a deposit of, or guaranteed by, the bank; may lose value.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s