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09.24.2020 by David M. Smith

The House Passes Government Spending Bill, Next Stimulus Bill Faces New Hurdle

The House of Representatives reached an agreement with the White House on terms of a spending bill to keep the federal government funded until December 11th. The last sticking point was aid to farmers which was resolved. Avoiding a government shutdown will eliminate one risk this fall while still dealing with the pandemic, economy, and election. The bill will now move onto the Senate. CNBC NYT

The Federal Reserve released a report stating that the initial government fiscal response seemed to ease the strain on families. But many of the programs and support have ended and many believe more fiscal measures are necessary to support those most affected and to sustain the recovery. Federal Reserve CNBC

But Congress has not passed another fiscal stimulus bill even though the House and Senate passed their own stimulus proposals months ago. They are far apart on terms with other high-priority items taking their focus such as passing a spending bill and campaigning. Now with the death of Supreme Court Justice Ruth Bader Ginsburg, the fighting over naming her successor may consume whatever remaining oxygen was left in the room and make passing stimulus measures even harder. Forbes

There is the possibility that as politicians go home to campaign in their districts, they may get an earful from constituents which will spur them to action. But prospects are dimming for more financial support before the election which could slow the economic recovery in the weeks or months ahead.

Special Election Article Next Week: We have been fielding questions from clients regarding our thoughts about how the election may affect the markets and economy. Periodically, our answers show up in articles in the weekly emails. But we have decided to condense the resources, data, and opinions in one weekly email. So, be on the lookout for our first-ever election special edition next week.

 

Market Volatility on the Rise: Stock market volatility rose in September. Especially the tech-heavy NASDAQ index which has corrected 10% after hitting a new high on the 2nd day of the month. The Volatility Index, a gauge of market volatility, started climbing again this month, though it is nowhere near March levels. Full stock valuations continued economic uncertainty, and the tense upcoming election, are all contributing and will probably continue for now. Yahoo Finance - VIX  

The Housing Market is Humming: Home sales in August were up 10.5% on an annual basis. With many working remotely, many have been leaving crowded metropolises for more spacious homes in the burbs and even further. Record low mortgage rates are helping fuel the activity with the average 30-year mortgage rate hovering at 2.87%. We've said it before, consider refinancing your mortgage if you have a much higher rate. Reach out to your advisor if you want to discuss your options. WSJ

JNJ Vaccine Enters Phase 3 Trial & Other Vaccine News: Johnson & Johnson announced plans to start the last phase trial of their single-dose COVID-19 vaccine. There are at least a half dozen vaccines in Phase 3 trials. A full economic recovery will not start until an effective vaccine arrives. The FDA also released stricter guidelines for emergency vaccine authorization to make sure approved vaccine immunizations last long enough and there is thorough safety follow up with participants. Lastly, there may be some good news that those contracting the virus may have a long immune antibody response. PR Newswire Raps.org Vaccine Tracker NYT  The Economist – Immune Response

Quick Hits:
  • Green energy is here and growing – and will remake geopolitics: The Economist
  • Apple is warring with application providers – which could affect all tech giants: Planet Money
  • Underwater data centers may be both practical and energy-efficient: Tech Explore
  • This fall foliage prediction map says the next 2-3 weeks will be the peak: Boston Magazine
  • More research on statins may point to more benefits and increased usage for older people: NYT
  • Scroll down the website in the link to see cocktails with big artistic flair: Thyme Bar NYC
  • Vinyl records are outselling CDs for the first time since the 80s. Go figure: WMUR

 

And for lighter reading…

Psychological Tricks to Make You Buy More: We all know that companies use all sorts of tricks to manipulate us to purchase products. Some are obvious like the false sense of urgency or listing an item for $9.99 instead of $10.00. But there are many others, such as a restaurant having an expensive dinner item they don't expect to sell only to make other dinner option costs more reasonable. Check out the list of 29 sales tactics and see how many you spot next time you are buying something. Visual Capitalist

Fall Recipes: We compost our food scraps at home and interesting things grow out of it every year. This year was butternut squash which sent me searching for good fall recipes for the cooler weather. Butternut squash steaks with brown butter-sage sauce anyone? Bon Apetit Epicurious Compost BHG Compost NPR

Quote of the Week: "When I'm sometimes asked 'When will there be enough (women on the Supreme Court)?' and my answer is: 'When there are nine.' People are shocked. But there'd been nine men, and nobody's ever raised a question about that." Ruth Bader Ginsburg 10 Memorable RBG Quotes - CNN

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Be well, take care, and stay safe!

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