The Fed Gives the Market a Lift

A newsworthy morning. The Department of Labor said that another 6.6 million Americans filed for first-time jobless claims. We’ve now lost 10% of the workforce is just three weeks.

The Federal Reserve announced details of a $2.3 trillion program designed to help alleviate the economic standstill.

Among the Fed’s measures were details regarding its Main Street business lending program and several other initiatives it is undertaking to backstop the reeling U.S. economy. The central bank also provided more detail on its market interventions, including plans to buy corporate bonds both at an investment-grade level as well as high-yield, or junk, bonds.

Under provisions outlined for the first time, the loans would be geared toward businesses with up to 10,000 employees and less than $2.5 billion in revenues for 2019. Principal and interest payments will be deferred for a year.

The Fed said the programs would total up to $2.3 trillion and include the Payroll Protection Program and other measures aimed at getting money to small businesses and bolstering municipal finances with a $500 billion lending program.

Stock futures had been trending lower but the Fed’s news turned that around. The S&P 500 has been up as much as 2.3% this morning.

Interestingly, today’s high for the S&P 500 was almost exactly the midpoint between the index’s recent high and its recent low. In other words, we gained back half of what we lost.

Shares of Disney (DIS) are getting a nice boost after the company said it’s up to 50 million Disney+ subscribers.

Shares of Trex (TREX) are up more than 30% over the last four trading sessions.

Posted by on April 9th, 2020 at 11:13 am


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