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Stock Trading Ends Optimistic

On Wednesday evening, the senate unanimously passed its version of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, 96-0. Despite surging unemployment claims around the United States as indicated by Thursday’s numbers released by the United States Department of Labor, Thursday’s stock trading displays just how hopeful investors are with the impact this legislation will have.

Pushed higher by the increasing prospects of the $2 trillion stimulus package, the past three days have been incredible for the stock market. Specifically, the Dow Jones, has climbed nearly 20% from the bottom, just days ago. The S&P 500 is up over 13% and the Nasdaq has climbed nearly 12%. The stock markets reached session highs on Thursday after House speaker, Nancy Pelosi, announced the CARES Act will be passed with “strong bipartisan” support.

Undoubtedly, the CARES Act will have a tremendous impact on the economy. The CARES Act expands unemployment insurance for workers, including a $600 per week increase in benefits for up to four months; allocates $350 billion for the Paycheck Protection Program, which is designed to assist small businesses, with 500 or fewer employees, impacted by the coronavirus disaster and economic downturn, make payroll and cover similar business expenses; provides a $1,200 refundable tax credit for individuals and double that amount for joint taxpayers; allows employers to contribute up to $5,250 to employees’ student loans, which will not be taxed as income to the employee; suspends student loan payments for six months without the accrual of interest; and so much more! The impacts of this legislation, as passed by the Senate on Wednesday, will impact every sector of the economy. Thursday’s stock market gains show that investors, legislators, and politicians are hopeful that this legislation will prevent significant negative consequences to the economy as a result of the coronavirus.

Logan Stevens




This advisory has been prepared by Carson LLP for informational purposes only and does not constitute legal advice. Copyright 2020, Carson LLP, 301 W. Jefferson Blvd. STE 200, Fort Wayne, Indiana, 46802. All rights reserved. Date of Advisory 3/26/2020.