In today\u2019s Steady Investor, we look at key factors that we\nbelieve are currently impacting the market and what could be next for the\nmarkets such as:<\/p>\n\n\n\n
Job Losses are Massive,\nBut There is an Untold Story in the Numbers \u2013 <\/strong>Many readers have likely seen\nthe dismal unemployment numbers: some 10 million initial jobless claims in just\ntwo weeks time.\nLooking at the last seven recessions (from 1973 onward), it has taken an\naverage of 27 weeks to reach 10 million claims. The idea that \u201cthis could be\nworse than the Great Depression\u201d is peppered throughout the media. But there is\nan untold story in these numbers: about two-thirds of job losses have come from\nhospitality, accommodation, food services, retail trade and other\nservice-sector jobs. Those who can work remotely \u2013 typically in higher-income\njobs in tech, finance, management, professional services \u2013 saw little change to\npayrolls in March. The implication here, in our view, is that the lion\u2019s share\nof layoffs are in industries that could resume operations immediately when\nlockdowns and restrictions are lifted. Many of these layoffs also included\nfurloughed employees just waiting to be allowed\n<\/em>to return to work. Many U.S. companies have cited the fiscal stimulus \u2013 and\nthe extra $600 a week of unemployment payments for up to four months \u2013 as the\nreason they furlough or lay off staff. By some studies, overall personal income\ncould actually rise<\/em> despite the US\nlosing millions of jobs. In a significant number of cases, those receiving\nunemployment benefits plus the direct-payment check (helicopter money) come\nfrom low-wage low-income households, which taken together could add up to more\nthan what they were paid previously in wages.1<\/sup><\/p>\n\n\n\n ______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n See Why You Should Avoid Market Timing in the Midst of a Crisis<\/a><\/strong> ______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n The Fed Keeps Getting Bigger\nand Doing More \u2013 <\/strong>The\nFederal Reserve\u2019s monetary stimulus in response to the global pandemic was\nalready unprecedented in size, scale, and speed. This week it (somehow) got\neven bigger. In a statement on Monday, April 6th, the Fed announced it would be\nestablishing a new facility designed specifically to help businesses cover\npayroll expenses and other essential costs, with loans that can even be\nforgiven outright if businesses maintain the size of their workforce. Banks\nhave been lobbying the government to purchase loans from the banks that\noriginate them, much like other government-backed entities (Fannie Mae and\nFreddie Mac) purchase mortgages that are pooled together and traded as\nsecurities. The Small Business Administration already guarantees these payroll\nloans, but with the Fed stepping\nin there will be a wall of liquidity available to buy the loans. There\nare signs the credit markets are already beginning to stabilize in the wake of\nFed action. Large-cap companies like Oracle and CVS Health Corp. have borrowed\nmoney at a record pace, and in all some $104 billion of investment-grade bonds\n(a record) were sold last week \u2013 pointing to strong demand. The previous record\nfor investment-grade bonds was made the previous week, at $73 billion. Mortgage\nrates have also come down and even companies with higher credit risk, like\nCarnival Cruises, have been able to access the debt markets to raise cash.3<\/sup>\n<\/sup><\/p>\n\n\n\n Small Signs of Hope \u2013\n<\/strong>There is a lot of bad news and negative headlines out there, and in our\nview, it is likely to get worse in the coming weeks. But we did manage do find\nsome good news amidst all of the uncertainty, tied to one of the most iconic\nAmerican companies ever founded: Nike. According to CEO John Donahoe, when many\nof Nike\u2019s stores closed in China in February, demand soared online with digital\nsales rising 36% across the globe. Nike\u2019s finance chief likened the surge in\ndigital orders to what Nike typically experiences during peak holiday season. Today,\nas China slowly tiptoes back to economic normalcy, Nike has re-opened roughly\n80% of the 7,000 stores in China, including stores in Wuhan \u2013 the original\nepicenter of the crisis. Nike is also starting to see positive momentum in\nSouth Korea and Japan, two countries where closures early in the crisis impacted in-store\nsales. The takeaway: over time, as we gain control of the virus and the threat\nto public health starts to fade, business can come back. But even if that takes\ntime, companies with a strong e-commerce platform can still find ways to grow.4<\/sup>\n<\/p>\n\n\n\n In the midst of a crisis like this, it can be easy to get\nswept into the negative headlines that saturate the news. When emotions are\nrunning high, many investors fall into the trap of trying to buy \u201cat just the\nright time,\u201d or selling stocks in the midst of a crisis out of fear. Both of\nthese impulses are likely to lead to more failures than successes over time.\nInstead, we recommend focusing on the long-term view and sticking to your\ncourse. A look behind 10 million unemployment claims, Fed adds more stimulus, some good news from China <\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-8596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8596"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8596\/revisions"}],"predecessor-version":[{"id":10616,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8596\/revisions\/10616"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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Far too often, investors fall into the trap of trying to buy \u201cat just the right time,\u201d or selling stocks in the midst of a crisis when emotions are running high.
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There is one big problem with market timing \u2014 study after study shows that the average investor is a poor market timer. In many cases, investors allow emotions and media noise to get the best of them, selling in and out of the market at the wrong times.
Our guide, \u201cHow Market Timing Can Affect Your Retirement Plan1<\/sup>\u201d seeks to explain these behavioral traps and offers potential solutions. If you have $500,000 or more to invest and want to learn how you may be able to avoid these mistakes today, click on the link below to get your free copy:
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Download Zacks Guide, \u201cHow Market Timing Can Affect Your Retirement Plan.\u201d<\/a><\/strong><\/p>\n\n\n\n
\n
\nBut before making any big decisions, check out our\nguide, \u201cHow Market Timing Can Affect Your Retirement Plan.\u201d5<\/sup>
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\nThis guide seeks to explain emotional and\nbehavioral traps that investors can fall prey to and offers potential solutions\nto common mistakes that many self-managed investors make.
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\nIf you have $500,000 or more to invest, and want\nto learn how you may be able to avoid these mistakes today, get your free copy\nby clicking on the link below:<\/p>\n","protected":false},"excerpt":{"rendered":"