In today\u2019s Steady\nInvestor, we look at key questions investors are asking, and factors that we\nbelieve are currently impacting the market such as:<\/p>\n\n\n\n
The U.S. Budget\nDeficit Swells \u2013 <\/strong>The pandemic created a perfect storm for deficits: falling\ntax revenues coupled with soaring government spending. Through the end of June,\nfederal revenue has plummeted 28%, to a mere $241 billion. The extension of tax\ndeadlines to July 15 are a driver, but sinking corporate revenues in the first\nhalf of the year also play a big role. For the single month of June, the U.S.\nbudget deficit totaled $864 billion, bringing the 9-month fiscal year total to\n$2.7 trillion. Tax receipts in the fiscal year have fallen 13% as government\nspending has increased by 49%, which puts the U.S. government on pace to record\nits largest annual deficit since World War II.1<\/sup> The numbers recorded\nso far do not account for future stimulus, which increasingly seems likely as\ncoronavirus continues to spread and impede a swift rebound in the services\neconomy. So far, the U.S.\u2019s massive deficits and increased government borrowing\nhave not come at a significant cost, at least in terms of interest owed on debt\noutstanding. The cost of borrowing, as represented by net interest costs, have\nfallen -11% in the fiscal year so far. <\/p>\n\n\n\n ____________________________________________________________________________<\/p>\n\n\n\n See How You Can Navigate This Recession<\/a><\/strong> ____________________________________________________________________________<\/p>\n\n\n\n Airlines Continue to\nFeel the Pressure \u2013 <\/strong>When Congress passed its $2.2 trillion stimulus package\nin March, airlines were allocated $25 billion to cover most payroll costs. In\nexchange for the stimulus, airlines agreed not to furlough any workers until\nthe funding dried up, effective October 1. Many airline executives believed\nthat October 1 was far enough away that demand would return to the market, but in\nthe absence of a vaccine, those projections are shifting as Americans remain\nreluctant to travel. Delta Airlines lost $5.7 billion last quarter and told\n25,000 workers they may be furloughed when federal aid expires. United Airlines\nindicated last week that they plan to send 36,000 similar notices to employees,\nwhile American Airlines already sent 25,000. American Airlines saw passenger\nrevenue plummet by 80% in June 2020 as compared to June 2019, and many airlines\nnow believe that they are significantly overstaffed based on what the future of\ntravel looks like in 2020.3<\/sup> <\/p>\n\n\n\n China Becomes First\nMajor Economy to Return to Growth \u2013 <\/strong>China reported growth in the second\nquarter of 3.2% from a year earlier, as the country has largely gained control\nof the coronavirus outbreak and as stimulus measures took hold. China\u2019s growth\nwas higher than most economists expected, and represented an 11.5% rebound from\nQ1.4<\/sup> Whether China can sustain this growth in the coming quarter\nwill largely rely on domestic activity, as the global economy slowly inches\nback to growth territory. <\/p>\n\n\n\n Pandemic-Induced\nRetirements \u2013 <\/strong>A recent study conducted by three prominent American\nuniversities found that the pandemic-induced recession has generated a wave of\nearly retirements. In some cases, larger corporations have offered older\nemployees early retirement packages as a means to shrink the workforce and cut\ncosts, and in other cases older workers are simply deciding to \u2018stay at home\u2019\npermanently. According to the study, the share of people who dropped out of the\nlabor force because of retirement jumped to 60% from just over 50% before the\npandemic.5<\/sup> With early retirements often comes the need to flip an\ninvestment portfolio from growth-oriented into growth and income-oriented,\nwhich many retirees may find challenging in the low interest rate environment. <\/p>\n\n\n\n In addition to low interest rates, soon to be retirees are\nalso concerned about how to invest during a recession. If you\u2019re at or near\nretirement, this recession may require pivoting your retirement investing\nstrategy. In order to do this, it\u2019s important to understand how recessions\nwork, how long they last, and how to potentially protect yourself and your\nfamily from long-term damage to your assets and security. We can help you with\nour free guide, The Economy is in Recession: 5 Insights to Navigate Your Way\nThrough It<\/em>.6<\/sup><\/p>\n\n\n\n If you have $500,000 or more to invest, get our free guide\ntoday. You\u2019ll learn the most scope and impact of recessions, and get our\nviewpoint on the most important moves you can make to weather this one. Don\u2019t\nwait\u2014get this guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" Pandemic causing early retirements, deficit highest since WWII, airline passenger revenue down 80%<\/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-8752","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\/8752","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=8752"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8752\/revisions"}],"predecessor-version":[{"id":10572,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8752\/revisions\/10572"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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It remains to be seen just how quickly the U.S. economy can recover from the current recession. In our view, this uncertainty can leave many investors, especially those nearing or in retirement, fearful of what\u2019s to come. If you\u2019re at or near retirement, this recession may require pivoting your retirement investing strategy.
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The market turbulence and uncertainty are scary\u2014but now is the time to take action and prepare yourself for the coming months. It\u2019s important to understand how recessions work, how long they last, and how to potentially protect yourself and your family from long-term damage to your assets and security. We can help you with our free guide,\u00a0The Economy is in Recession: 5 Insights to Navigate Your Way Through It.2<\/sup><\/em>
\u00a0
If you have $500,000 or more to invest, get our free guide today. You\u2019ll learn the most scope and impact of recessions, and get our viewpoint on the most important moves you can make to weather this one. Don\u2019t wait\u2014get this guide today!
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<\/a>Download Your Copy Today:\u00a0<\/a><\/strong>The Economy is in Recession: 5 Insights to Navigate Your Way Through It<\/a><\/strong><\/em><\/p>\n\n\n\n