Stocks rebounded this week following the Senate’s unanimous approval of the unprecedented $2 trillion economic relief plan. The plan (expected to pass through congress on Friday) includes direct payments to Americans, strengthened unemployment insurance, loans to businesses, and increased healthcare resources among others. On Thursday, March 26 Treasury Secretary Steven Mnuchin said people can expect to start receiving relief checks within three weeks. The timing of this relief plan is crucial for many Americans who have found themselves out of work in the wake of the coronavirus pandemic. Initial jobless claims totaled nearly 3.3 million this week, significantly higher than the previous high of 695,000 recorded in October of 1982. Markets digested other economic data this week, showing strong gross domestic product (GDP) growth and consumer spending in-line with consensus. These figures are backward-looking and help to reinforce the fact that the economy entered this pandemic in good shape, but don’t provide much insight into the real-time impact the pandemic is having on the economy. Interest rates were relatively stable following two weeks of significant volatility with the 2-year and 10-year Treasury notes trading at 0.29% and 0.81% respectively mid-week.
Source: Bloomberg, CNBC, WSJ Market Data, GSAM