Localized Outbreaks Heighten Fears of National Second Wave

Over the past week, localized outbreaks in several states continued to get worse, increasing the chances of a national second wave of infections. Arizona, California, Florida, and Texas have shown significant spikes in cases in recent days, with the Carolinas also under pressure. Further, multiple other states have experienced expanded case growth. Overall, the virus remains under control in many states, but the breadth and magnitude of the outbreaks have increased the risk at a national level.

Weekly Market Update, June 22, 2020

General Market News

  • Treasury rates were largely range bound last week, as Federal Reserve (Fed) Chairman Jerome Powell’s midweek testimony to Congress did not contain major market-moving news. The 10-year Treasury yield started the week at 0.70 percent, slightly higher than last week’s opening yield of 0.66 percent. The story was the same on the longer end of the curve, with the 30-year opening at 1.44 percent, compared with 1.40 percent the week before.

Will Localized Outbreaks Derail Recovery?

The news this week has been a bit of a mixed bag. The bad news is that we’ve seen signs of localized outbreaks in several states. In recent days, Arizona, California, Florida, and Texas have all had significant spikes in cases. But here’s the good news: outside of these and a handful of other states, the virus remains under control. There’s still no sign of a national second wave of infections.

Weekly Market Update, June 15, 2020

General Market News

  • Rates took a bit of a roller coaster ride last week, as the 10-year Treasury yield spiked to as high as 0.93 percent following the previous week’s sell-off in the bond market. In fact, most of last week’s rates came back down just about as fast as they spiked the week before. The 10-year opened at 0.66 percent on Monday. The 30-year reached a high of 1.75 percent over the same time frame, falling to 1.40 percent as of Monday morning. The 2-year, which reached a recent high of 0.23 percent, opened at 0.18 percent.

Is the Risk of a Second Wave of Infections Rising?

Over the past week, we’ve had some good news in that there hasn’t been any sign of a national second wave of infections. In fact, the spread rate dipped below 1 percent for the first time on two days, and case growth seems to have stabilized to around 20,000 per day. On the other hand, we’ve also had some bad news. Several states are seeing local second waves, with case counts rapidly on the rise. For now, those increases have been offset by improvement elsewhere in the country, as they’ve been severe at the local level but haven’t translated to a national level. This situation is something we’ll need to keep an eye on, as a further increase in case counts in the affected states or a slowdown in improvement in the other states could reverse the trend.

New PPP Flexibility Act of 2020 Clarifies Key Loan Provisions for Small Businesses

The Paycheck Protection Program (PPP) was created to provide loans to support small businesses and save jobs during the COVID-19 pandemic. Ongoing interpretation and retroactive regulation by the Small Business Administration (SBA) has created some confusion for borrowers under this program, particularly as it relates to loan forgiveness.

Weekly Market Update, June 8, 2020

​General Market News

  • After better-than-expected employment numbers were released last week, rates moved significantly higher, with the 10-year Treasury yield as high as 0.96 percent late Friday. The 30-year is trading at 1.69 percent, and the 2-year is at 0.21 percent, as of Monday morning. Although the unemployment rate drop was good news, the sell-off in rates was likely overdone; we should see more volatility in the weeks and months ahead.

Consumers Moving Back into Economy—But Risks Remain

Over the past week, the biggest news in the coronavirus crisis has been what’s not happening; that is, we’re not seeing any signs of a second wave of infections as a result of the ongoing reopening of the economy and the loosening of social distancing measures. In fact, the data reveals that social distancing had been subsiding in many areas even before the formal loosening. So, we’re three weeks or more into the start of a new environment for the spread of the virus, and there has not been a significant increase in the case growth rate. In fact, case growth itself has trended back down to around 20,000 per day.

Market Update for the Month Ending May 31, 2020

Markets continue to recover in May

May saw equity markets around the world rise for the second month in a row, as efforts to reopen economies began taking hold. The Dow Jones Industrial Average (DJIA) rose by 4.66 percent, and the S&P 500 gained 4.76 percent. The Nasdaq Composite led the way with a 6.89 percent gain.