Business owners across the U.S. are seeking answers amidst mandatory closures and shelter-in-place orders issued to combat the spread of COVID-19, or the Coronavirus. Our firm is continuously monitoring reports from various financial sources and news outlets as well as government agencies to help you anticipate and prepare for changes to come, and we’ve highlighted the most important developments going into the first full week of April 2020.
Weekly Macro U.S. Markets Roundup (March 23 – 27)
|Dow Jones Average||19,160||21,600||UP 12.7%|
|S&P 500 Composite||2,304||2,540||UP 10.2%|
|10-Year US Treasury Bond||0.82%,||0.676%||DOWN 0.07524%|
|Global X E-Commerce ETF (EBIZ)||13.51||14.90||UP 10.29%|
|ProShares Online Retail ETF (ONLN)||29.35||32.87||UP 11.99%|
|Emerging Markets Internet & Ecommerce ETF (EMQQ)||28.55||31.75||Up 11.21%|
Following a sharp decline earlier in March, several keystone financial indicators including the Dow Jones Industrial Average and the S&P 500 rebounded last week. E-commerce is growing across the board, especially in such categories as health and wellness, fitness equipment, and medical supplies.
The Economic Impact of COVID-19
The government is actively implementing measures to offset the negative effects of the Coronavirus crisis. President Trump recently signed an economic stimulus bill allocating nearly $2 trillion in federal funds for individuals and businesses nationwide. Additionally, The Wall Street Journal reported that senior officials in the Trump administration announced a suspension of import tariffs for the next three months. There will not be any formal changes in tariff policy, but the temporary moratorium on customs duties will allow businesses to significantly reduce costs. E-commerce businesses, especially those with all or most of their supply chain overseas, will enjoy a bit more breathing room as a result.
Moreover, these initiatives are designed to stimulate the economy and make it easier for companies to operate. Business owners can also apply for relief through several federal programs described in greater detail below.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act has allocated a total of $349 billion for distribution to qualified companies through the Paycheck Protection Program. Applicants who apply for a PPP loan will not be disqualified from receiving a loan from the Small Business Administration’s disaster loan program (EIDL). However, you must use the proceeds from the EIDL for purposes different than the PPP loan. You can apply for a PPP loan directly through any existing SBA 7(a) lender. Loan maturity is two years with 0.5% interest and best of all, these loans can be fully forgiven if used for payroll-related expenses.
The IRS has instituted two new refundable payroll tax credits under the Families First Coronavirus Response Act, so employers can give workers up to 80 hours of paid sick leave to care for themselves or their family members. You can immediately be reimbursed in full for any time off you give to your team members. Check with your payroll company to see if you qualify for any available credits.
Lastly, states have been granted increased flexibility regarding unemployment benefits. According to the Department of Labor, employees can apply for benefits while under quarantine or while businesses are temporarily shut down due to COVID-19. While each state administers its own unemployment insurance, all states must follow federal guidelines. For more information, contact your local unemployment office.
Read Part 3 of our COVID-19 blog series here.
Global Wired Advisors will continue to track new developments, and we will continue to publish regular updates to keep you prepared and informed. We are here to help in these uncertain times. Please do not hesitate to contact us should you have any questions or concerns about the state of the economy or your business in particular.