🕰 A year ago today
Hey Snackers,
A year ago today, the World Health Organization declared that we were in a pandemic — and life as we knew it screeched to a halt. A year later, 2.6M people have lost their lives to Covid. And millions more have lost loved ones.
A year ago, a Covid vaccine was a distant dream. Now three FDA-authorized vaccines are rolling out, developed in record-shattering time. By the end of May, President Biden says there'll be enough to vaccinate every American adult.
Today, we're looking back at how markets and the economy have been impacted over the past year — and looking forward to what's ahead.
Year in the Economy: the coronaconomy and American wallets
The numbers tell a story... In February last year, the US unemployment rate was 3.5%, WFH was an ultra-rare luxury, and "stimulus" was an SAT vocab word we didn't recognize. The economy didn't know what was about to hit it. In numbers:
- 22M US jobs were lost from March to April, as unemployment hit 14.7%.
- 30 major retailers declared bankruptcy, and 100K+ small businesses permanently shut down.
- $5T: Stimulus spending from Congress, including the upcoming $1.9T bill.
- $28T: The massive US national debt, which has been financing the stimulus(es).
Things are looking up... The economy has gained ~12M jobs since March, the unemployment rate has fallen to 6.2%, and GDP is growing again. Plus, there's a massive $1.9T stimulus package coming. If it’s anything like the first two, American wallets can expect some extra padding:
- After Stimulus Round #1, Americans saved a record 33% of their disposable income in April 2020 (up from 8.2% in February). That was largely thanks to stimulus checks and boosted unemployment.
- After Stimulus Round #2, personal income rose 10% in January, thanks to a fresh round of (smaller) checks. And consumer spending jumped more than 2%.
The social safety net grew massively... and so did Americans’ savings. The upcoming stimulus, which includes $1.4K checks, could provide the final recovery boost that the economy needs. It’s expected to be passed on Friday, and checks could go out as soon as next week. For ~10M unemployed Americans and millions more who are struggling, that could be a big help. But too much saving could actually hurt the economy.
Year in the Markets: it's been a wild ride for stocks
The "bear" times... Bear markets represent periods of decline, but they also represent our state of mind a year ago: "hoard and hibernate." We're revisiting the grizzly fall, the stunning rise, and where we might go from here.
- February 19, 2020: We're still working from the office, our face masks are made of charcoal serum, and the S&P 500 is at a record high.
- March 11: The WHO officially declares Covid-19 a pandemic, and the US enters a bear market. The Dow closes 20% below its most recent Feb. high.
- March 23: The lowest low. For the year: the three major stock indexes (the S&P 500, the Dow, and the Nasdaq) are each down ~30%. The S&P and the Dow are lower than 2018 levels.
The "bull" times... It's always darkest before the dawn — for markets, dawn started at the end of March. Congress unleashed trillions of $$$ worth of stimulus spending and the Fed gave us near-zero interest rates, making stocks more attractive. And people realized that Big Tech had a big pandemic advantage. By mid-May, the Nasdaq had recovered all of its 2020 losses. By August, stocks were back at all-time highs, with Big Tech shares leading the surge.
- The present: This month, tech stocks fell into "correction" territory thanks to rising interest rates and inflation fears — bringing the market down with them. But the S&P 500 is still up more than 40% over the past year. The Nasdaq is up a whopping 64%.
Two roads diverged in a non-mellow market... and we don't know which one investors will choose to travel by. The bear case (bad for stocks): interest rates have risen, the new $1.9T stimulus is raising inflation fears, and Big Tech is losing its pandemic edge as the economy reopens. The bull case (good for stocks): the Fed says it won't raise rates any time soon, the upcoming stimulus package could bring economic healing, and the vaccine rollout is well underway. After the '08 financial crisis, inflation fears were high — but it never came.
What else we’re Snackin’
- Stim: The House passed the $1.9T stimulus package yesterday, and President Biden is expected to sign it into law tomorrow.
- Vax: The US plans to buy 100M extra doses of Johnson & Johnson's one-shot Covid vaccine.
- Pledge: Goldman Sachs pledges $10B over 10 years to support racial equity and economic opportunities for Black women.
- Minifail: Apple reportedly cut iPhone orders by 20% because of underwhelming demand for the iPhone 12 mini.
- Nice: Jack Dorsey's first tweet is on track to sell for $2.5M as a non-fungible token — he says the $$$ will go to charity.
- Playdate: Tweens' favorite gaming app Roblox saw its shares soar during its first day trading on the NYSE.
Thursday
- Earnings expected from Oracle, DocuSign, Poshmark, GoodRx, and Ulta
- One-year anniversary of the pandemic
- Weekly jobless claims
Authors of this Snacks own shares of: Apple
ID: 1559620