Week of Sept 18, 2020 Weekly Recap & The Week Ahead
Most people are driven by greed, fear, envy, and other emotions that render objectivity impossible and open the door for significant mistakes. — Howard Marks
1. House to Introduce Bipartisan Stimulus Bill — after months of failed negotiations, 50 moderate House Republicans and Democrats will unveil a $1.5 trillion coronavirus stimulus plan. According to The Wall Street Journal, moderate Democrats have urged Pelosi to resume negotiations with the White House. Pelosi has not ruled out a deal and the Journal reports that the White House would accept a package with a $1.5 trillion price tag. The House bill from the bipartisan group is expected to include around $500 billion for state and local governments, per Bloomberg. It will also include additional unemployment benefits and another round of stimulus payments for most Americans.
2. Amazon Expands Its Pandemic-Era Hiring Spree — Amazon will hire 100,000 warehouse workers in the U.S. and Canada to help keep up with surging demand due to the Covid-19 pandemic.
Amazon says hiring is already under way and that the jobs pay at least $15 an hour with benefits and come with a $1,000 signing bonus in some locations. Separately, the company is hiring for some 30,000 corporate and technology jobs, with an average compensation of $150,000. Other retailers that have profited during the pandemic are hiring as well. For example, Walmart has hired 200,000 new employees and Chipotle announced in July that it will hire 10,000 workers to open new locations and staff drive-thru lanes for online orders.
3. U.S. Retail Spending Grew at Slower Pace in August — U.S. retail spending rose 0.6% in August for the fourth straight monthly increase, but at a slower pace as some extra unemployment benefits ran out. Consumers spent more on clothing, electronics and furniture in August as students went back to school, many for online classes because of the pandemic. Spending fell on groceries and sporting goods. Some retailers say that consumers who are still working from home have continued spending on home improvement, including their workspaces, and purchased big-ticket items with money saved from not dining out or traveling.
4. Fed Signals Rates Will Stay Near Zero for at Least Three Years — the Federal Reserve left interest rates near zero and signaled it would hold them there through at least 2023 to help the U.S. economy recover from the coronavirus pandemic. The Federal Open Market Committee “expects to maintain an accommodative stance of monetary policy” until it achieves inflation averaging 2% over time and longer-term inflation expectations remain well anchored at 2%. In addition to slashing borrowing costs in March, the central bank has pumped trillions of dollars into the financial system through bond purchases and launched a slew of emergency lending facilities to keep businesses afloat. The economy has partly recovered from the steepest downturn on record and some sectors such as housing are doing well, but Covid-19 continues to kill thousands of Americans each week, unemployment remains high and industries like hospitality and travel are depressed.
The week ahead — Economic data from Econoday.com:
