Centers for Disease Control and Prevention says three U.S. airports will start screening for coronavirus; the first U.S. case is confirmed in Washington state.
The Coronavirus market crash begins; reports say COVID-19 cases are
spiking at a Beijing hospital.
The New York Stock Exchange stops trading in the late morning due to technical issues, as its shares continue to trade on other exchanges. Clients of Charles Schwab, Fidelity and TD Ameritrade complain about problems in accessing accounts online.
Goldman Sachs revises its S&P 500 earnings outlook to zero for 2020 because of its forecast for a “severe decline in Chinese economic activity,” lower demand for U.S. exports, supply chain disruptions and a slowdown in the U.S. economy coupled with “elevated business uncertainty.”
Stock-trading app Robinhood experiences outage as the major stock indexes fall about 3%.
The Federal Reserve announces a 0.50% emergency rate cut in response to the growing economic threat from COVID-19. “If this doesn’t foretell a global recession and further big declines in equity prices, I don’t know what would,” economist and money manager Gary Shilling says.
U.S. stocks drop over 7.5% in the worst day on Wall Street since the financial crisis, as crude oil prices sink 20% on fears tied to the spreading coronavirus. Treasury yields plummet, and credit markets weaken in overnight trading. “If the contagion lasts for an extended period of time, the U.S. economy could slip into recession and the S&P 500 would fall to 2,460 (-18%),” say Goldman Sachs strategists. Also, Robinhood’s app crashes again.
President Donald Trump declares coronavirus a national emergency. A travel ban on non-U.S. citizens traveling from Europe goes into effect.
Trump says that while he
has no plans to demote Fed Chair Jerome Powell, he asserts he has the right to do so.
The Fed cuts the benchmark interest rate by a full percentage point nearly to zero and pledges a return to quantitative easing via the purchase of at least $700 billion in Treasury and mortgage bonds. The central bank also says banks can borrow from the discount window for up to 90 days, and reserve requirement ratios have dropped to 0%.
At this time, some 163,000 people have been infected by COVID-19 worldwide and over 6,000 have died, about half in China. The U.S. has about 3,400 reported cases and 66 deaths.
The CDC issues guidance, stating that “large events and mass gatherings” of 50 or more people should be canceled or postponed for the next eight weeks to reduce the spread of the coronavirus. Such events include conferences, parades, concerts, sporting events, weddings and other types of assemblies that are planned “not only by organizations and communities but also by individuals.”
The Dow crashes by nearly 13%; S&P 500 plummets 12%, its worst day since 1987. NYSE halts trading for 15 minutes during the day, the third time a circuit breaker has been triggered in the past week. Shilling says the economic fallout from the coronavirus pandemic “all but assures a major global recession.”
Financial services firms move to temporarily close offices, branches and other facilities, as public health and executive orders requiring people to shelter in place begin in California, New York and other areas. Most employees are asked to work remotely.
The recession that economists have been forecasting for the U.S. and the world has begun, according to analysts at JPMorgan, Bank of America and Wells Fargo.
GOP lawmakers unveil their Phase 3 coronavirus response bill, the 250-page Coronovirus Aid, Relief and Economic Security Act of 2020, which would waive penalties on early withdrawals from retirement plans of up to $100,000 for coronavirus-related reasons. Meanwhile, President Donald Trump orders the Treasury to delay the deadline for filing federal taxes to July 15, which the GOP bill would also do.
The CARES Act also directs the Treasury secretary to provide up to $208 billion in collateralized loans to American industries affected by the virus, $58 billion to facilitate liquidity in the airlines and $150 billion for other distressed sectors; the program does not includes grants to or “bailouts” for the airlines or other industries.
Sen. Kelly Loeffler, R-Ga., and three other senators are in the spotlight for selling and buying stocks after they received sensitive briefings in late January about the potential impact of the coronavirus.
After announcing $700 billion in asset purchases in the prior week, the Fed removes limits on its quantitative easing program. It also says it will continue to buy Treasuries and mortgage-backed securities in “amounts needed to support smooth market functioning and effective transmission of monetary policy” and purchase investment-grade securities in primary and secondary markets and through exchange-traded funds — which it has not done before.
Plus, the Fed says it will start lending programs for small businesses, consumers and large employers and a term asset-backed loan facility (TALF).
S&P 500 hits a low of 2,237.
New York Stock Exchange moves
to all-electronic trading.
COVID-19 & Other Top News Affecting Advisors
Senate and House pass the $2.2 trillion CARES Act, as hospitals in U.S. pandemic hotspots (like New York) pass a tipping point. The package includes an extra $600 a week for workers receiving unemployment for four months, a big boost for the health care system and direct checks to Americans.
House Speaker Nancy Pelosi, D-Calif., says on the House floor before the vote: “Today, we have all acknowledged that our nation faces an economic and health emergency of historic proportions over the coronavirus pandemic, the worst pandemic in over 100 years.”
Patrick McHenry, R-N.C., the top Republican on the House Financial Services Committee, explains after the vote that the bill, "while not perfect, is the appropriate action to provide necessary resources to get Americans and our economy through this national emergency.” Plus, it gives Treasury Secretary Steven Mnuchin and Fed Chair Powell “the resources they need to address the liquidity crisis facing Main Street businesses that employ millions of Americans,” he states.
Dow loses 23% in the first quarter, the biggest first-quarter and the second-biggest overall drop in its 135-year history; the index fell 25% in the fourth quarter of 1987.
Independent financial advisory firms with less than 500 employees that are having difficulty meeting payroll costs and rent can apply for a small-business loan, as can other businesses, through the Paycheck Protection Program — created by the CARES Act. The PPP initially had $349 billion to disburse but that amount is expanded by another $310 billion by Congress.
The Financial Industry Regulatory Authority announces plans to launch online exams soon for the Securities Industry Essentials, Series 6, Series 7, Series 63 and Series 66, with other programs planned over the next month or so.
The Commerce Department says U.S. gross domestic product contracted 4.8% in the first quarter.
The total number of first-time jobless claims for the past six weeks hits
30.3 million, which
18.6% of the
U.S. labor force.
The IRS says businesses that participate in the PPP and have their loans forgiven will not be able to claim the usual business tax deductions for wages, rents and other expenses. This treatment of loan forgiveness “prevents double tax benefits.” Businesses with forgiven loans won’t have to pay taxes on the forgiven loan amount.
Federal Reserve Bank of New York finds that states hardest hit by the coronavirus pandemic so far received fewer loans on a per-business basis in the first PPP round than states that suffered the least from the virus. The study also says less than 20% of loan applications from small businesses in New York, the epicenter of the pandemic in the U.S., were approved vs. 55% for small businesses in Nebraska.
Much of the money in the
CARES Act designed to support businesses and state and local governments has not been disbursed — including $46 billion earmarked for airlines and businesses critical for national security, a congressional report finds. Of some $454 billion that the U.S. Treasury Department can use to support emergency lending facilities by the Federal Reserve, the Treasury has committed to dispense only $195 billion.
Amy Cooper, then an employee of Franklin Templeton, calls police on Christian Cooper, a Black bird-watcher, in New York’s Central Park. The incident is shared via Twitter, and Cooper is fired the next day.
Protests began in
Minneapolis one day
after George Floyd,
who is Black, died as white police officer Derek Chauvin knelt on Floyd’s neck.
NYSE partially reopens trading floor with new safety and legal requirements.
U.S. surpasses 100,000
deaths from the coronavirus.
A Minneapolis police station is set on fire, the National Guard is brought in, and then mostly peaceful protests resume. By this point, protests are taking place regularly in Portland, Oregon, and many other cities nationwide.
The Fed discloses purchases of some
$1.3 billion worth of investment-grade and high-yield ETFs in mid-May managed by BlackRock (iShares), which heads the Fed’s ETF purchase program, as well as from Vanguard, State Street Global Advisors, Van Eck, and Xtrackers, a subsidiary of Deutsche Bank. Investment-grade ETFs account for 83% of the assets. The purchases, part of the Fed’s Secondary Market Corporate Credit Facility, aim to support the corporate bond market during the pandemic-fueled market tumult.
The National Bureau of Economic Research declares February 2020 as the official end of the U.S. economic expansion and beginning of a recession. “The expansion lasted 128 months, the longest in the history of U.S. business cycles dating back to 1854,” NBER says. The previous record was 120 months, running from March 1991 to March 2001.
Dow falls about 7% on fears of a second wave of COVID-19.
A video goes viral of Robert Larkins and his wife, Lisa Alexander, complaining and calling police over a Black Lives Matter sign in San Francisco. Larken, then a Raymond James managing director of public finance, is fired three days later.
NYSE allows a limited number of market makers to return to the trading floor.
The IRS shares more details on who is eligible for enhanced access to retirement distributions and loans under the CARES Act.
Protests continue nationwide over the death of George Floyd (May 25), Breonna Taylor (March 13 in Louisville, Kentucky) and Ahmaud Arbery (Feb. 23 near Brunswick, Georgia). The protests in support of Black Lives Matter have occurred in at least 1,600 locations so far this year.
The Fed indicates it will hold the federal funds rate within its current 0–0.25% range through 2022 or “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”
Hours before the PPP
is set expire, Treasury
Secretary Mnuchin says the Treasury Department supports legislation to “repurpose” those funds and has been in talks with the Senate’s small-business committee about how to proceed. The Senate subsequently passes an extension of the program to Aug. 8, which the House approves.
The Securities and Exchange Commission's Regulation Best Interest for brokers takes effect.
CFP Board says it will add a remote proctoring option for the Sept. 22–29 CFP exam.
The Fed says it will extend all pandemic-related lending facilities through year-end. The Internal Revenue Service issues final regulations on limits to the deduction for business interest expenses, including basic statutory amendments in the CARES Act; the limits apply to taxes in 2018 and afterward.
The Securities and Exchange Commission creates a new exam team to focus on emerging risks and current events and be part of the agency’s Office of Compliance Inspections and Examinations.
Commerce Department states that the U.S. gross domestic product contracted by about 33% in the second quarter, mainly due to the pandemic.
The Labor Department gives guidance to help states implement the Lost Wages Assistance (LWA) program, which provides
claimants in most
programs with up to $400
per week of extra benefits
from around Aug. 1 to Dec. 27.
The IRS reopens registration for families who did not receive the $500-per-child payments they are entitled to under the CARES Act.
The Dow erases its losses for the year to date, and the S&P 500 and Nasdaq indexes hit new record closes, one day after news of the Fed’s policy shift to a greater emphasis on job growth and an increased willingness to let inflation run higher than in the past.
A multi-system market outage affects many trading platforms as Apple enacts a 4:1 stock split, Tesla splits its shares 5:1, and the Dow Jones Industrial Average drops Exxon Mobil, Pfizer and Raytheon Technologies and adds Salesforce, Amgen and Honeywell International.
IRS plans to start mailing letters to about 9 million Americans reminding them to register by Oct. 15 in order to receive their Economic Impact Payments (as part of the CARES Act).
The Justice Department says it has charged 57 defendants with committing fraud to obtain over $175 million from the PPP, causing some $70 million in actual government losses. The DOJ has recovered or frozen over $30 million.
The Dow retreats 9% for the month, during which time the Fed issues its final economic outlook and the chances of another federal stimulus package fade.
The economy grows 7.4% in the third quarter from the prior period and at a 33.1% annual rate, as it regains about two-thirds of ground lost earlier in the year, according to Commerce Department data.
Several news groups
project former Vice President
Joe Biden as the winner of the presidential election.
Online trading platforms are plagued by outages.
Trump says on Twitter that Biden won, but does not concede that he lost.
The number of U.S. deaths from the coronavirus tops 245,000 with 11 million cases on record. Year to date, the Dow is up about 4.6% (close to 30,000), the S&P 500 has risen roughly 11.9% (to 3,627), and Nasdaq is at a 32.4% gain (to 11,938).
SEC Chairman Jay Clayton says he will step down at year-end. He was sworn in May 2017 and will leave the SEC as one of its longest-serving chairs.
The Labor Department's fiduciary prohibited transaction exemption to align with the SEC's Reg Best Interest is sent to the Office of Management and Budget.
Biden announces his
intent to nominate Janet Yellen for Treasury Secretary.
Photo credits: Powell: Stefani Reynolds/Bloomberg; CDC: Pavel Metluk/Shutterstock; Loeffler: Elijah Nouvelage/Bloomberg; Pelosi: Al Drago/Bloomberg; McHenry: Sarah Silbiger/Bloomberg; Cooper: Twitter; Floyd: Tverdokhlib/Shutterstock; Mortuary workers: Alexandros Michailidis/Shutterstock; Larkins: Twitter; BLM protesters: Matteo Roma/Shutterstock; Mnuchin: Tasos Katopodis/Getty Images/Bloomberg; SEC: g0d4ather/Shutterstock; DOJ: Christopher E Zimmer/Shuterstock; Yellen: David Paul Morris/Bloomberg
Design by Chris Nicholls
Electoral College votes and affirms Biden’s win. His transition team’s list of nominees and appointees includes Janet Yellen (Treasury), Neera Tandin (OMB), Cecilia Rouse (Council of Economic Advisors) and Brian Deese (National Economic Council).
The number of COVID-19 cases in the U.S. stands at some 16.6 million, while the number of deaths is about 302,000.
Meanwhile, the S&P 500 is trading at nearly 3,695, up 13.4% for the year; the Dow Jones is at 30,199, up 4.6%; and Nasdaq is at 12,595 up 38.5%.
OMB completes its review of Labor's fiduciary prohibited transaction exemption to align with the SEC's Reg BI.