After the year we've had in 2020, Tiny Tim's words are more applicable now than ever, it seems. We're two weeks away from ringing in 2021, when we can finally wave 2020 goodbye.
This morning U.S. futures are down over concerns of a "new" COVID strain that has been documented in the U.K. However, Admiral Giroir, US Assistant Secretary for Health, says there is no need for alarm. Admiral Gioir noted, "Viruses mutate. We've seen almost 4,000 different mutations among this (COVID) virus. There is no indication that the mutation right now that they're talking about is overcoming England. And, more importantly, we have not seen a single mutation yet that would make it evade the vaccine."
Overnight, Congress approved a stimulus package in the neighborhood of $900 billion. Per usual, the agreement was reached in the 11th hour. Now, we get to find out what's in the package. We renew our objection to the stimulus. Instead of providing more payments to individuals, the 9 states that are on some sort of lockdown, simply need to reopen. The 9 states on lockdown - MI, IL, MN, NM, WA, OR, CA, NY, & PA - make up 39.6% of US GDP. If these states were to reopen, it would contribute more than $7.7 trillion to GDP, which would get rid of recent soft patches in economic data.
The economic data has definitely hit a "soft" patch. While the data was mixed last week. Weekly Jobless Claims increased, yet claims declined in 35 states. So how did claims increase for the nation? Two states on lockdown - CA & IL - had large outsized increases in claims last week as businesses in those states struggle to keep staff when no revenues are coming in the door. The Philly Fed Index and the Empire State Index both fell last week considerably versus the prior month's reading. Pennsylvania and New York - you guessed it - on lockdown.
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