Newsletter 07/31/2020

So far this week we are facing the expiration of many provisions of the CARES act, most importantly, the extra weekly unemployment benefit of $600 as well as additional funding for testing, schools, municipalities and states, hospitals and more. A Democratic Congress is negotiating with a Republican Senate and the White House. Not even close to an agreement on next steps with regard to the expiration of CARES benefits Friday July 31. The cost of the proposed House bill is $3 trillion and cost of the proposed Senate bill is $1 trillion. Concern about the deficit be damned. There is still time for a deal, but the heels on both sides are dug in so we shall see what the outcome bears. There are many hurting Americans, both financially and emotionally so something needs to happen, but negotiations are never easy. 


Markets

The stock market seems unconcerned again with reassurance from the Federal Reserve today that they will do whatever is necessary to help the economy. Jerome Powell says economic recovery is linked to solving the public health problem. But the determination to find a solution to the pandemic is frayed. Leadership on all levels is critical to summon the discipline to manage our behavior as a country but we are left to summon the discipline to wear masks in public, wash our hands, socially distance and stay away from crowded indoor places. 

Democrats and Republicans found common ground to criticize the big 4 tech companies: Apple, Facebook, Google, and Amazon. Microsoft has escaped scrutiny for now. Interestingly these four stocks plus Microsoft represent 22% of the S&P 500 and also represent the major reason the stock market has recovered. The rest of the S&P 500 is down about 5% year to date. 

The bond market is providing opportunities to refinance mortgages. Call your mortgage person if your mortgage rate is above 3.75%. Refinancing is an important decision and be sure to call or email your SAS team if you are considering refinancing for guidance on this process. 


Economy

Earnings so far are not as terrible as expected. Will 2nd quarter GDP growth be as bad as expected? The expected decline from the Atlanta Federal Reserve is about 50%. That would be a historic drop. Unemployment claims last week were higher than expected at over 1 million. Hard to see how this will not impact stock prices but so far a quick recovery in prices. Average home price sales are holding strong as well. Go figure. 


More Current Events

The passing of John Lewis and the week of mourning for an American hero moved me to tears. The fight for racial equality presses on. Included is one link to view a video of John Lewis’ ceremonies of life.


Fall Academic Year

If you are a parent of a young child, the Fall academic year has more than likely been a topic of conversation all summer. Many schools will be opening in the fall exclusively as a distance learning format. With many work from home and unemployed parents now shouldering much of the child care and elements of homeschooling duties in an already stressful and stretched environment.

Some have taken to establishing “pods” of like aged, geography, and practices related “exposure risk” from essential workers to strict adherence to guidelines. Sometimes families are grouping together independently and others are hiring an outside individual, even out of work teachers and tutors, to come into their homes (or yards, garages, shared outdoor spaces, or rotating homes) for learning, caring, and socializing, or any combination, to give working parents reprieve. The long term repercussions are unknown.

How to handle payroll taxes, insurances/liabilities and licensing concerns as well as definitional concerns, where is the dividing line between a child care provider and a tutor for instance? What happens with new shelter in place orders for outside hired individual’s expectations and salaries? These issues and more importantly, how pods increase the gap between socioeconomic availability for those with fewer resources are a part of the conversation.

If you’re interested in learning more about pods, and you have a Facebook account, search Facebook for groups like “neighborhood/city/county/bay area + mom/dad/parents” (local “parent’s groups”) to identify one or two that you’d like to try. Then post on your own profile or in these groups that you’re interested in learning more about potential pods in your area. In the resources mentioned below, there are initiatives for awarding needs based scholarships, but much is still unclear on how to successfully form and utilize pods while ensuring the majority of our children from all backgrounds can afford and benefit.

Hang in there, it’s not a decision any of us were prepared for given the timing and changes in our post-Covid-19 world.
 

Additional resources


Conclusion

This ‘new normal’ has pushed us all outside our comfort levels and a recent stumbling on the notion of ‘ambiguous loss’ got me thinking. The feeling that shelter in place was a temporary reality has passed. This isn’t something that we short-term had to bear with. It’s prolonged presence has positioned us to look at life differently. Feelings of ambiguous loss have started to set in. Most of us were okay with shedding our routines for a short while, but as precaution against social gatherings presses on, it’s not surprising it’s left some of us feeling a little out of sorts.

Monique and Elizabeth, recently taking stock of their work wardrobe, had to laugh at how pressed hemlines and heels have morphed into shirts that can be worn with yoga pants. It’s interesting looking back- the ritual of “getting ready” for the day, or “going out.” In all honesty the majority of our peers have noticed that a “work wardrobe” was not as important as we once thought it to be. Heck, even all those employers we worked for in the past who deemed positions as “mandatory in office” have now been proven as work from home positions with the many exceptions (many of whom are exceptional) of essential workers and the service industry.

The new normal has demanded our attention to get creative and re-invent our workplace among other rituals we clung to. The new normal questions prior demands on ourselves; on the way our time is spent, on what we spend money on, the way our consumer priorities have shifted. The current setting has encouraged us organically to go back to basics and provided an opportunity for us to define what our basics even are.

It’s not without ambiguous loss of those past rituals that has made it an uncomfortable process. We mentioned last week how important it is to hang onto what you can control. The loss of prior routine and normalcy really creates that blurrrrrrsday feeling. Hanging on to what we can control- like what to make for dinner, or choosing to get out for a walk, calling a friend- these are things we can control. Rituals are important to how we find meaning in the day to day. Although some of our rituals are forever changed we have the ability to choose the ones that are worth keeping and celebrating.

For this and all SAS Financial Advisors newsletters, check out our blog at www.sasadvisors.com/blog

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