by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author:Â Greg Valliere
March 26, 2020
LATE THIS FRIDAY, President Trump will sign into law the $2 trillion stimulus bill that finally passed in the Senate and will win approval in the House tomorrow. The inability of Congress to vote remotely will have to be addressed (Skype seems like an alternative) as lawmakers consider still another measure this summer.
THIS WEEKâS MAMMOTH BILL probably wonât be enough, even as new cases begin to level off in New York in April. There are other hot spots to worry about, New Orleans in particular.
AND THE RECIPIENTS OF WASHINGTON AID are in for a disappointment â it wonât come quickly; checks to individuals and businesses may not arrive for another three weeks, an interminable wait for people on the edge.
SO WE THINK ANOTHER BILL will begin to take shape in May (Congress is scheduled, tentatively, to return in late April). Thereâs widespread agreement in both parties that the states will need more money, and individuals will need another cash infusion to cover rent and other basics.
THE WISH LIST IS GROWING: House Speaker Nancy Pelosi said yesterday that the next bill will seek to shore up pensions, provide free health care for virus victims and address worker safety issues. Thereâs always the risk of a âChristmas treeâ bill, but this weekâs package is fairly clean by Washington standards, with only a few dubious add-ons such as aid to the Kennedy Center.
THE NEXT BILL COULD COST $1 trillion, maybe more, depending on wish list items above and beyond more aid to states and individuals. The budget deficit simply isnât an issue; it could surge close to $4 trillion this year. In addition to the huge spike in spending, revenues will be sharply lower.
WEâRE IN UNCHARTED WATERS, as governments throw the kitchen sink at the virus. The focus now will shift to the data â unemployment claims this morning, and especially the daily numbers of new infections, now declining in Italy.
WEâRE NOT OUT OF THE WOODS YET, but the monetary and fiscal stimulus has been stunning, with more available if necessary. And the public generally is cooperating on social distancing. The great wild card is a premature U.S. end of the lockdown, which governors and scientists would adamantly resist if it comes before May.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGFâs suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
