The Markets – as of Market Close November 7, 2020
November 21, 2020
Reported virus cases began to soar by mid-month, both here and in Europe. Word that Great Britain may impose stricter lockdowns hit stocks there and eventually in the United States.
Nevertheless, there are signs that the economy is gradually picking up steam. Gross domestic product rebounded in the third quarter and job growth continued in September, albeit far below its August pace. Several companies reported strong earnings in the third quarter.
Employment increased by 661,000 in September after adding 1.4 million jobs in August. Claims for unemployment insurance continued to drop in October. The insured unemployment rate was 5.3% (8.1% a month earlier). Notable job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services. Employment declined in government, mainly in state and local government education. These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed.
Another reason for investor trepidation in October was the ongoing debate over whether and when another round of fiscal stimulus would be in the offing. Throughout the month, there were indications that some aid would be forthcoming before the November election. However, that wasn’t in the cards.
Since the end of October, stocks soared to record highs following announcements from major pharmaceutical companies of positive data on a COVID-19 vaccine. That news helped buoy investor optimism. Cyclicals and bio-tech stocks led a powerful rally, which drove the Dow Industrial Average index and the S&P 500. The Nasdaq lost value as money moved from tech stocks to value shares. Energy shares jumped more than 14%, while financials advanced more than 8.0%. Crude oil prices, the dollar, and Treasury yields all rose.
For the week ended November 7, there were 709,000 new claims for unemployment insurance, a decrease of 48,000 from the previous week’s level.
Surging COVID-19 cases prompted a sell-off last Thursday however markets finished well with the Dow and the S&P 500 which each gained 1.4%, the Global Dow which rose 1.1%, and the Nasdaq that gained 1.0%.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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