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Markets Rally on Vaccines & Hopes of Stimulus Package Thumbnail

Markets Rally on Vaccines & Hopes of Stimulus Package

The stock markets rose last week as the Dow (+0.5%), NASDAQ (+3.1%), and S&P 500 (+1.3%) offset the small losses from the prior week.  Taxable bonds were roughly flat, while tax free muni bonds continued their recovery, gaining about 0.1% - 0.4% for the week.  The US stock markets have been rallying the past couple weeks because of the vaccines that were started last week by Pfizer and Moderna’s vaccine that may begin as soon as this week.   Plus, the markets advanced in hopes and anticipation for a stimulus package to be passed by Congress.  Those hopes faded on Friday, causing the markets to give back gains from earlier in the week.    

 

A $900 billion relief package was approved by Congress over the weekend, and was initially expected to cause the markets to rocket upward at the opening bell today.  Unfortunately, that is not the case.  News of a second, more contagious strain of COVID in Britain has caused that country to increase its lockdown, and for other European countries to restrict travel and commerce to and from that country.  This is causing the markets to drop sharply in pre-market trading.

 

The recent stimulus package is reported to provide a $600 stimulus check (plus an additional $600 for each dependent child) to households, similar to the $1,200 check earlier in the year, so it will likely be based on the household income.  The stimulus package is also expected to provide an additional $300 per week for unemployment, compared to the $600 per week that ended in July.  Lastly, the stimulus package is also reported to be adding more of the PPP loans for small businesses, as well as making the prior PPP loans effectively tax free (note that’s not how they stated it, but that’s how it results).  On that last note, I can assure you that many small business owners who received the PPP loan may not have been aware of the impending tax impact, so this will truly be a relief.  Yes, I am applauding!





TAX SERVICES PROVIDED BY MICHAEL MENNINGER, CFP. VOYA FINANCIAL ADVISORS DOES NOT PROVIDE TAX SERVCES. INVESTMENT ADVISOR REPRESENTATIVE AND REGISTERED REPRESENTATIVE OF, AND SECURITIES AND INVESTMENT ADVISORY SERVICES OFFERED THROUGH VOYA FINANCIAL ADVISORS, INC. (MEMBER SIPC.) MENNINGER & ASSOCIATES, INC. IS NOT A SUBSIDIARY OF NOR CONTROLLED BY VOYA FINANCIAL ADVISORS, INC. CN1456465_1222