MTS Insights

Just about a month after the second relief bill was passed, President-elect Joe Biden released the details of the next round of stimulus for COVID-19 relief. This plan is quoted at the steep price tag of $1.9 trillion and is titled the American Rescue Plan. Biden will look to pass the plan in the form of two bills with the first being a more immediate solution to the economic anxieties caused by the pandemic and the second being a bill to attack longer-term goals of “creating jobs, reforming infrastructure, combating climate change and advancing racial equity.” Here is what’s on his wish list: Direct payments of $1,400 to Americans (to get to $2,000 in direct payments including the December $600 payment). Federal unemployment benefit to $400 a week and extending through Sept. Extending restrictions on evictions and foreclosures through Sept. $350 billion in state and local government aid. $170 billion to K-12 schools and higher education. $50 billion to COVID-19 testing efforts. $20 b...

 It has happened again. On January 13th, 2021, President Donald Trump was impeached by the House of Representatives for a second time in his term (and seven days away from the end of that term). The impeachment was in response to the Capitol insurrection last week and the role he played in the escalation of the events that day. While it may have seemed like a clearer reason for impeachment than the first round, the vote was still almost entirely divided down party lines. In the first impeachment, the House vote was 228-193 in favor, and in the second, slightly closer at 232-197 in favor. Ten Republicans crossed party lines to vote in the affirmative which felt like a major bipartisan shift, but in reality, it wasn’t. Both votes highlight political polarization that has only heightened in the last four years of President Trump’s term. On several issues, Republicans and Democrats have become more polarized, in the public and in Congress. Views on protesting have shifted with 43%...

One of the stories of 2020 was the immensely impressive rise in Tesla’s (TSLA) stock price. Shares of the electric car company rose about 720% as it made headlines month after month and eventually catapulted Elon Musk to become the richest man in the world at the beginning of 2020. The hype surrounding Tesla is representative of a greater overall trend of innovation in green energy. A trend that has transformed from being driven by speculation of what it could become to being driven by demand for the new products being created. S&P author Jim Wiederhold hints at this in his “Refl ecting on the Inflections Points of 2020” reviewing S&P GSCI Sector Commodities and their performance over 2020. The article reports that S&P GSCI Precious Metals and S&P GSCI Industrial Metals were the best performing of the 6 indexes with Precious Metals up over 20% and almost 70% higher than the worst-performing Energy Index. Some Precious Metal highlights were gold and palladium up above 2...

 China-US trade tension once was one of the primary economic topics during President Trump’s presidency as his fleeting diplomacy with them tossed financial markets into disarray. In 2020, as far as the media was concerned, trade tensions took a backseat to the impending COVID-19 crisis which spawned in late February and early March. Instead, after the January 2020 Phase One Trade deal was in place, conversations trailed off as the focus moved to public health. While everyone was distracted, the US-China Economic Security Review Commission continued to monitor progress in the de-escalation of trade tensions which seems to have occurred.   As of October 2020, US exports to China were up 66% year-over-year at $14.7 billion. The surge in exports set a new monthly record for US exports which had historically never been higher than $12.6 billion (record set in October 2016). The large growth led to a -14.1% drop in the trade deficit with China at a time when the US’s overall trade...

 On January 6th, 2021 during the Senate's certification of the 2020 election results on the steps of the Capitol building, protests by Trump supporters escalated into a siege. The crowd moved to the steps of the building and eventually forced their way inside. For a couple of hours, they remained there causing chaos while law enforcement moved slowly. Amidst the invasion, a female protester was shot and killed. The day will be remembered in sadness after a year of intensifying political polarization exacerbated by an even more divisive election. With two weeks until the inauguration of Joe Biden, political uncertainty lingers as President Trump continues to refuse to concede the election. The uncertainty was likely compounded by the COVID-19 pandemic which has spurred lockdowns and more polarization along political party lines. The economy has limped alongside supported by stimulus bills and liquidity injections. An IMF report found significant evidence that major pandemics have t...

The second round of COVID-19 relief has been passed. Congress closed negotiations on the huge bill that would cost around $900 billion in December before 2020 ended. The price tag this round is about half of the $1.8 trillion CARES Act legislation (which was down from an expected $2.3 trillion at the time) but has still been cited as not being big enough. Here's what's in the bill  (a further breakdown from Sullivan & Cromwell ):  $300 extra per week in unemployment insurance as well as an extension of Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. $284 billion into Paycheck Protection Programs and $20 billion more in grants for companies in low-income areas and money for community-based and minority-owned lenders. $600 in direct payments to individuals who made up to $75,000 and couples who made up to $150,000 with payments down to nothing for individuals who make $99,000 or more and couples who make $198,000 or more. $25 billion into ...

As 2020 comes to a close, a new year in 2021 demands our attention. The top institutions have released their takes on what the next year will look like financially as one of the most dramatic years comes to a close. Global economic and financial outlooks have the tough task of reviewing the cornucopia of troubling events from 2020 while looking forward to what 2021 could bring. Some central themes can be picked out in the following annual outlooks but also key differences. In the decisions of what to keep in and out of the report, we can see what is expected to be the driving economic forces in the new year. Vanguard Wells Fargo BlackRock Lazard Merrill Lynch JPMorgan Citi The two themes most dominant in all the outlooks were the easing of COVID-19 and a continuation of easing in central banking policy. Every report saw these as driving forces in 2021 as they were in 2020, and of course, it's no secret that these would be chosen to guide the discussions. More specifically, COVID-19...