This is my opinion, take it or leave it. Just wanted to see what everyone else is thinking about right now.
I’m sure at this point everyone have already heard the news about the feds trying to inject the economy with 2 trillion dollars. We honestly have no clue if this is going to happen since it’s gotta pass at the house. Best case scenario, it passes and 90% of American families will get a check from uncle Sam for about $1200 or $2400 if you’re married. But what’s going happen from there?
The markets been doing amazing the pass week just based on this news alone and it didn’t even happen yet. Lets say the bill get pass Monday 3/30 and the IRS starts working on it the same day. Now idk about you, but it took at least 3 weeks for them to direct deposit my refunds this year and I did it early. Now imagine if they have to process over 100 million checks( about less than 1/3 of the us, using conservative numbers right now) at the same time. It’s going to take longer than 3 weeks for people to get their checks and that is with direct deposit too. So the time is going to be even slower with people who received their refunds by mail. This puts us at a time frame of April 17 the earliest of receiving the check. This could be different for corporations and small business.
Now lets be honest, even with access to this money, the majority of the people will not be able to spend it. The virus is going to get worst before it gets better. Especially if people can’t follow simple rules to self quarantine. I currently live in New York and it seems like we are couple weeks ahead of the rest of the U.S in terms of how fast the virus had spread. It’s only a matter of time before the rest of the country catches up the NY, Ca, or Wa. I hope I’m wrong, I really do.
That is why I think that what we are seeing right now is just a short term rise in the market. People are excited that they’re getting free money, but that doesn’t change that fact that no one is going on a cruise anytime soon. planes aren’t going to be magically filled with passenger anytime soon. Especially with it being a global pandemic, more boarders will close before restrictions are removed. Unless the virus magically disappear by itself (which will take time) or a cure is found, it’s going to take some time before people will go out spend money again. Even if there is no order to shelter in place, the fear of the virus will keep some people from going out.
It’s going to get worst before it gets better. Lmk what you guys think
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.