We live in interesting times.
There is discussion about whether the saying, “May you live in interesting times,” is a blessing or a curse. At this point in 2020, we all understand why.
Last week, the world watched in consternation as the price of oil, specifically West Texas Intermediate crude oil, dropped into negative territory. The price moved below zero because a purchase date coincided with a lack of storage space. As a result, the owners of the oil had to pay to have it taken off their hands, reported Ben Levisohn of Barron’s.
Oil prices recovered on Wednesday. Global oil producers have promised to reduce output, which would realign supply and demand, but it has yet to happen, reported Evie Liu of Barron’s. The delay may reflect a hope that coronavirus restrictions will ease, economies will begin to reopen, and demand for oil will increase.
Investors were understandably unsettled by oil prices, and U.S. stocks lost value early in the week. As oil stabilized, U.S. stocks pushed higher. The rebound in stocks stalled on news that trials for a potential COVID-19 treatment had produced disappointing results.
Thursday’s unemployment data showed 4.4 million people filed for unemployment benefits the previous week. That brought the number of unemployed Americans to more than 26 million, according to Jeffry Bartash of MarketWatch.
Earnings, which reflect companies’ profits, remained less than robust, as expected. “The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the first quarter is -15.8 percent...” reported John Butters of FactSet.
The energy sector finished the week in positive territory.
STIMULUS CHECKS ARE ARRIVING. The Internal Revenue Service (IRS) has distributed $157.9 billion through 88 million stimulus payments, according to Andrew Keshner of MarketWatch.
If you have recently lost a job, or you’re having difficulty paying bills, your check may already be spent. However, if you’re still working, or remain financially comfortable, think carefully about how you want to spend your checks. The money could be used to improve your long-term financial outlook or provide support to people in need. For instance, you could:
In 2019, the Board of Governors of the Federal Reserve reported just 61 percent of adults had enough savings set aside to cover a $400 unexpected expense. The report stated, “During 2018, one-fifth of adults had major, unexpected medical bills to pay, with the median expense between $1,000 and $4,999. Among those with medical expenses, 4 in 10 have unpaid debt from those bills.”
In early April, the average interest rate assessed on credit cards accounts with unpaid balances was 16.61 percent. Reducing your balance, could significantly reduce the amount of interest you pay. In addition, if something unexpected happens, having a higher level of available credit could be beneficial.
“…many charities and nonprofits are still struggling. Donations to some churches have plummeted, and many charities have had to cancel crucial fundraising events such as galas, bike races, and walkathons,” reported the Associated Press.
SOMETHING TO CONSIDER.
There is no doubt we will get through this crisis event.
When, and what we do then, will be the big questions.
So, let us be prepared for that time.
--Guidance Wealth, LLC
Investment Advisory services offered through Guidance Investment Advisors, LLC, doing business as
Guidance Wealth, LLC, a registered investment adviser registered with the Securities and Exchange Commission. SEC Registration does not imply any level of skill or training.
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https://www.barrons.com/articles/in-a-stock-market-like-this-anything-could-cause-the-next-panic-heres-what-to-watch-51587776542?mod=hp_HERO (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/04-27-20_Barrons-In_a_Stock_Market_Like_This_Anything_Could_Cause_the_Next_Panic-Heres_What_to_Watch-Footnote_2.pdf)
https://www.barrons.com/articles/dow-jones-industrial-average-rose-as-oil-prices-came-back-51587591022?refsec=markets (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/04-27-20_Barrons-The_Dow_Rose_457_Points_Because_Oil_Prices_Came_Back-Footnote_3.pdf)