Date : May 1, 2020
Category : In the News
Over the last week headlines reaffirmed the commitment of the U.S. Congress and the Federal Reserve to rejuvenate the U.S. economy. Below are highlights to keep you informed.
For the week ending Friday, May 1st, the S&P 500 fell 0.2%, but the results failed to cloud a strong April where the S&P 500 rallied 12.7% over the course of the month. For the S&P 500, it was the best single monthly return since 1987 and the best April since 1938. As of May 1st, the S&P 500 has advanced over 26% since its March 23rd low.
Small-business loan programs resumed this week as they were restocked by the $484 billion bill Congress passed last week. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EDIL) program had both previously run through their original cash allotments. Reports of strong demand for these loans led to delays and snags that stymied lenders and borrowers alike. Some states began to slowly ease lockdown measures as confirmed coronavirus cases in the U.S. eclipsed 1 million, and anticipation for an FDA “emergency-use authorization” for the drug remdesivir to combat COVID-19 grew on trial results. First quarter U.S. gross domestic product fell at a seasonally and inflation adjusted annual rate of 4.8%, while initial jobless claims exceeded 30 million since the start of the pandemic. The Commerce Department also announced that consumer spending declined 7.5% in March and personal income fell by 2%.
On Wednesday, Federal Reserve Chairman Jerome Powell gave an address on the state of the U.S. economy and the Fed’s plans to help support recovery efforts. Powell said the Fed would take “whatever steps it could” and use all of the tools at its disposal to help remediate the toll the pandemic has taken on economic growth. With interest rates already near zero, the Fed did not change its benchmark rate and did not share plans to boost rates anytime soon.
The central bank has been aggressive in its approach to help support the economy, including introducing a series of emergency programs and buying large quantities of mortgage- and government-backed debt. Powell prepared Americans for more bad news saying that second-quarter economic data will look bleak, a consequence of the pandemic and the measures taken to stop the spread of the virus.
After Wednesday’s address, the Fed announced the expansion of its Main Street Lending Program, which was first unveiled in March and is part of the bank’s larger push to keep credit flowing into the economy. After receiving more than 2,200 comments from businesses and banks, the Fed revised its original outline of the program and will broaden eligibility and create a new category that would allow “riskier companies” to access Fed-backed loans. A start date has yet to be announced.
According to the IRS, nearly 90 million people have received stimulus checks. If you can’t count yourself as part of that group, here are three likely reasons why:
1. You do not qualify
Individuals who earn more than $99,000 or married couples who earn more than $198,000 are not eligible to receive stimulus checks.
2. The IRS does not have your direct deposit information on file
If you didn’t receive a 2018 or 2019 tax refund through direct deposit, you need to submit your banking information to the IRS through their Get My Payment tool. If you don’t file a tax return, you need to submit your banking information to the IRS website for non-filers.
3. Glitches in the system
If you are eligible for a stimulus check and received a “Payment Status Not Available” error when attempting to login to the Get My Payment tool, it is possible that your information has not been entered into the IRS system yet. According to the IRS website, the data gets updated once per day.
As it stands now, the stimulus checks are basically a one-time payment. But are they enough?
According to some lawmakers, the answer is no, as they discuss new proposals for putting more income into Americans’ hands. White House economic advisor Kevin Hassett said on Tuesday that administration officials are studying the possibility of additional stimulus checks.
Moving forward, we will be providing updates like this on a bi-monthly basis instead of weekly. If any questions come up between our updates, please contact us at (310) 791-3226, or email your HFA advisor directly.
Be well and stay safe,
Harris Financial Advisors
This update provides information that is accurate to the best of our knowledge as of the article date. This article should not be viewed as a substitute for consulting directly with financial, tax and legal advisors regarding your personal situation.