Weekly Market Recap
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Stocks Continue Their Upward Trend
Over the course of the past week, all three major indexes – the Dow, the S&P 500, and the NASDAQ, have done fairly well, each up around 3% on the week. The market saw bigger swings on Thursday as the Fed outlined the details of their two-year long policy review.
The short of it is, the Fed will allow inflation to go over 2% after years where it fell below that. We’ve been under 2% inflation for most of the time since the 2008 financial meltdown, so it appears the market was reacting to what this might mean for the country’s economic future, if anything.
In addition, jobless claims came in at 1.01 million, which was right around what experts expected, but the more interesting nugget was a revised reading of second quarter GDP — which showed the economy shrank by about 31.7% in the second quarter of this year.
Hurricane Laura Impacts Oil (and More)
If you haven’t been keeping up with it, Hurricane Laura has made its way over Louisiana and near the Texas border on Thursday. NPR called it “one of the most powerful storms to hit Louisiana in living memory,” as it “left destruction and misery in its wake, with debris from homes and businesses scattered about, flooded streets, uprooted lampposts and at least one death.”
But the Category 4 hurricane is impacting more than the people of Louisiana. Where it touched down is the region that houses roughly 50% of the oil refineries in the country. The market reacted quickly, as oil futures were down 2% early Thursday morning. This will be one to watch, as Laura’s landfall was more powerful than Katrina was 15 years ago.
Airlines Still Hit Hard
United Airlines plans to furlough nearly 3,000 pilots this fall unless it gets more financial relief from the federal government to help cover labor costs as the business has been hit hard from significantly reduced travel due to COVID-19. More specifically, United and other labor unions are asking for an additional $25 billion to help cover costs for the next six months. If United does end up furloughing this many pilots, experts think it could send a massive ripple through the airline industry and have further impacts.
32 States Approved to Start Distributing Additional Unemployment Benefits
The Federal Emergency Management Agency has approved 32 states to begin giving an extra $300 a week in weekly unemployment benefits. This comes as a result of executive actions taken this month by the President after Congress failed to replace the $600 per week unemployment benefit that was previously in place but ended at the end of July.
While this may seem beneficial to those receiving it, there is a glaring issue. The approval goes through December, but the funds are expected to be completely drained in a matter of weeks unless legislative action occurs — putting even more pressure on Congress to push through a new coronavirus-related stimulus package.
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