A dark cloud is looming…
The chance of stimulus coming your way is getting lower every day.
The optimism surrounding the economic recovery is splintering. And for a good reason. The recovery looks like it will slow more than feared during the three final months of the year. And the main culprit is the realization that many had recently – Congress is almost certain it will not be providing more federal stimulus.
“At this point, we think it is clear that Congress will not pass additional fiscal stimulus this month,” Goldman Sachs economists wrote in a note to clients. “We now think any further stimulus will wait until early 2021.”
This was a change in tune as many analysts expected another $1 trillion of stimulus to be delivered to help boost a struggling economy. But lately, those hopes have fallen off – causing the economy and the market to spiral.
Where’s the money?
For months, lawmakers have struggled to reach a deal on the size and composition of a recovery package. And now, it’s about to become more difficult seeing with the recent happenings in Washington – including the passing of Supreme Court Justice Ruth Bader Ginsburg – has shifted focus dramatically.
The failure to reach an agreement on a stimulus package will deliver a blow not only to an already struggling economy but also disposable income levels in the fourth quarter. In fact, the lack of stimulus could cause disposable income levels to drop to pre-pandemic levels.
And that could be detrimental to your portfolio. Here’s how you can not only protect yourself from the fallout – but set yourself up for profits while you’re at it…
How can I get some?
Truth be told, I think the stock market is not reflecting how bad the coronavirus situation is and how its impacting millions of American citizens. Without relief, we could see businesses shut down, and people struggling to pay rent or make ends meet.
That’s not the most comforting outlook for the future. And if this comes to fruition, we could see the market tailspin out of control. And that’s why I think it’s more important than ever to prepare for what could be coming…
Now, with that said, I think the stock market is severely overbought, and we’ll be seeing a correction very soon. So, in preparation, protect yourself with a SPY put spread. It will allow you to profit off the chaos while protecting your bottom dollar and controlling your risk.
In the spotlight: Job numbers…Are you surprised?
Speaking of a struggling economy – here’s another reason why we’re seeing this…
After a few weeks of positive job reports, beating expectations – the same can’t be said for this week. The number of first-time filers for unemployment benefits was higher than expected last week. This proves that the labor market continues to struggle to find its footing due to the pandemic.
First-time claims for state unemployment benefits were expected to come in at 850,000 for the most recent week, down slightly from the 860,000 claims reported for the previous week. Instead, the total rolled in at 870,000 – a jarring uptick.
New York and Georgia were the states that saw the most significant jump in week-over-week initial claims. Claims in New York jumped by more than 9,000 last week, and first-time filers in Georgia rose by more than 6,000.
This disappointing jobs reports took many investors by surprise, but I think it’s essential to pay attention to these numbers to prepare for the future. We’re seeing a strong wave of volatility hitting the market, and I think that’s because the optimism surrounding a recovery is fracturing.
The Ultimate Part-Time Job
While the disappointing jobs reports are certainly disheartening after some positive news on that front earlier in the year, the “ultimate part-time job” is now hiring.
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