Stimulus, Vaccine, Airlines: O2 Wealth Economic Update, Oct. 9, 2020

U.S. and World News

  • President Trump walked back statements made earlier in the week about holding off on stimulus until after the election. The President said last night that talks on an aid package had resumed, and Speaker Pelosi and Treasury Secretary Mnuchin are expected to talk speak again.
  • Regeneron Pharmaceuticals has asked the FDA to provide emergency use authorization on its REGN-COV2 antibody combination for treatment of COVID-19. The company stated they have enough for about 50,000 patients, and expect to have about 300,000 doses within the next few months. The same drug was given to President Trump last Friday, and the President has spoken positively of the treatment on Twitter, saying that he would approve emergency use of the drug.
  • Speaker Pelosi and Treasury Secretary Mnuchin met on Wednesday to discuss a possible standalone relief package for airline companies, totaling as much as $25 Billion. The relief package is being considered a bipartisan stand-alone relief package, separate from a large scale economic relief package. Talks of the airline relief come after major airlines began to announce plans to begin furloughing thousands of workers if they did not receive government aid last week.

Markets

  • Markets rallied this week. The S&P 500 rose 3.89% and closed at 3,477. The Dow Jones jumped 3.31% and closed at 28,533. Year-to-date, the S&P 500 is up 9.2% and the Dow Jones is up 1.86%.
  • Interests rates rose this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.34% and 0.77%, respectively.
  • The spot price of WTI Crude oil rebounded this week. Prices fell 9.45% and closed at $40.55 per barrel. Year to date, Oil prices are down -33.59%.
  • The spot price of Gold rose 1.55% and closed at $1,929.32 per ounce. Year to date, Gold prices are up 27.16%.

Economic Data

  • Job openings decreased by 204k to 6,493k in August vs. an upwardly revised 6,697k in July. The slowdown is consistent with some slowdown in labor demand heading into fall months.
  • The ISM non-manufacturing index increased by 0.9 points to 57.8 in September, against expectations for a decline.
  • Initial jobless claims fell more than expected for the week ended October 3. The 4-week moving average declined by 13,000 to 857,000.
  • Nationwide continuing claims—the number of persons receiving benefits through standard programs—decreased 1,003k to 10,976k.

Fact of the Week

  • The US Money Market industry has grown from $3.63 Trillion on 1/1/2020 to $4.4 Trillion on 9/30/2020. Despite investors holding more cash, the S&P 500 is up over 9% year to date on a total return basis (Source: Investment Company Institute).

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.

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