(May 26, 2020, 8 p.m. ET) The new Coronavirus federal aid package, the CARES Act, expands options for distributions from IRAs and qualified retirement plans.
(May 20, 2020, 8 p.m. ET) As mandated by the Coronavirus Aid Relief & Economic Security (CARES) Act on March 27, individuals harmed by the epidemic may make withdrawals from an IRA, 401(k) or 403(b) account before age 59½ without facing the usual 10% federally-imposed early withdrawal penalty.
(May 13, 2020, 4 p.m. ET) During this bleak period in world history, amid the terrible news of death, sickness and financial destruction, there are reasons for hope and promising signs of a U.S. recovery from the Covid-19 pandemic.
(May 5, 2020, 8 p.m. EST) - While the coronavirus pandemic has exacted a once-unimaginable toll in human life, its financial cost is cushioned by an unusual confluence of global conditions shielding Americans from a much-worse economic catastrophe.
(Tuesday, April 28, 8 p.m. EST) The partial shutdown of the economy is captured in these four snapshots of fundamentals in March.
(Wednesday, April 22, 2020) The Coronavirus financial crisis is being compared to the near collapse of the global financial system in 2008 and The Great Depression from 1929 to 1939, but there is one big difference this time: The Fed. The Federal Reserve Bank is using innovative new tools to contain the financial damage of the Coronavirus epidemic.
(Tuesday, April 14, 2020, 8 p.m. EST) - By August 4, 2020, the Institute of Health Metrics and Evaluation (IHME), an independent public health research center at the University of Washington, expected 68,841 deaths from COVID-19 in the U.S.
(Tuesday, April 7, 2020, 8 p.m. EST) -- For business owners who have not yet submitted an application for Paycheck Protection Program (PPP) financial assistance from the U.S. Government, there's good news and bad.
(Thursday, April 1, 2020, 4 p.m. EST) - A cornerstone of the U.S. Government response to the economic crisis caused by the pandemic is the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a history-making $2.2 trillion law that just went into effect. With almost no strings attached, CARES extends financial support to business owners in need under the Paycheck Protection Program (PPP).
(Tuesday, March 24, 2020, 7:30 p.m. EST) The stock market lost about a third of its value before rebounding 9.4% today on news that Congress was closer to an agreement on a $2 trillion economic stimulus package. The coronavirus crisis has reshaped the financial economic landscape and the situation is changing fast. Here are nine financial focal points for your immediate consideration.
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Is The Inverted Yield Curve The Financial Fakeout Of 2019?
The day the yield curve inverted, on Wednesday, August 14th, stocks plunged and financial headlines turned grim.
Should you worry? Or is the yield curve inversion the financial fakeout of 2019?
"Longer-term rates below shorter term rates are a clear signal from bond investors that they think the United States economy is on the downswing," reported The New York Times' senior economics correspondent, Neil Irwin, "that its future looks worse than its present." But this widely-reported storyline in the financial press misses important context.
In the past, when the yield curve inverted, it was usually because investors saw fundamental economic measures deteriorating, but that's not happening now. Rear view mirror investing — assuming history will repeat itself — is not smart in current conditions, because unprecedented negative yields in Europe and Japan make the road ahead different this time.
At the same time stocks plunged on recession fears triggered by the yield curve inversion, the retail sales report from the U.S. Census Bureau in the 12 months through July surged 3.7%! That followed a 3.8% spike in June and a 3.1% rise in May. Since 70% of U.S. economic activity is consumer driven, the continued strength in retail sales extinguished recession fears. When consumers are spending like this, a recession cannot be unfolding.
The retail numbers are part of a growing body of evidence that the yield curve may be making a recession look much closer than it actually is. It's a broken indicator.
This doesn't mean the yield curve is not a useful forecasting tool. It just means it's not a useful tool in the current economic situation. A hammer can't fix every problem.
And things really are different this time because the current inversion of the yield is caused by an unprecedented condition: Negative yields in Europe and Japan, which are depressing yields on long-term U.S. bonds!
From a prudent professional's perspective, the inversion is a technical market problem of supply and demand and not a "real" economic problem. It's wise to plan on your retirement portfolio's fixed-income allocations yielding lower returns in the years ahead, but that doesn't mean the U.S. is headed for a recession. Fears about the inversion of the yield curve heightened stock market volatility but that does not mean the decade-long, expansion-fueled bull market is over. It seems likely to turn out to be the financial fakeout of 2019.
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