E Market Briefing For Thursday, July 30

Recognizing the severe economic downturns - was and is essential coming from the Fed. Their comprehensive approach to assisting both monetary and fiscal policy moves (and supporting efforts that Congress may determine) is absolutely essential.

The statements relating to 'retaining the policies through year-end' also is expected, by us to ensure we set-up or robust recovery in time. It also negates the prevalent concern that the Fed, not today, but at the next meeting, might start revising them.

The Chairman spoke to the circulation of 'coins' being anemic. Normal (what is that?) circulation has been requested and so on. But that's mechanical. More notable may be the persisting Dollar weakness (UDN), which is at a 'trend-line' now, and if it bounces a different aspect should be contemplated, which would be a pullback by Gold (GLD).  

Risks related to a 'double-dip' recession are speculative for sure. However consumer spending increases -along with virus level increases- occurred faster than they were prepared for. So that brought the monitoring of 'high-frequency data', which shows a slowing of the pace of recovery, since the recent spiking in COVID-19 cases. Sure, lots of folks are restricting their 'external' mingling or dining activity versus the first attempts at 'reopening'. Chairman Powell says it's too soon to conclude slower spending, but I will say it's pretty evident (my own personal experiences venturing-out) concur that it is not a safe environment, but could be if we had on-site near-instant testing.  

Executive summary (includes Fed highlights): 

  • Preserving flow of credit essential to mitigate damage to the economy.
  • Continued fiscal and monetary (expansive) policy required.
  • Direct fiscal support needed for small business.
  • Lending (demand) levels were lower than they anticipated.
  • Given biggest shock in history, lending facilities must be sustained.
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