Students in Money Management
Reopening the Economy
Updated: Apr 29, 2020
By Matthew Stasiw.
Potentially market altering actions have hit the news recently. In fact, it would be one of the most optimistic and beneficial outcomes in the U.S. market sense the start of the coronavirus pandemic. At 9:30 AM Eastern Time on April 13th, a total of nine states on the East and West coasts announced planning for the slow reopening of their respective economies. This would include lifting the strict at home orders amid hopes that the worst of the pandemic has passed. Some of the hardest hit states, which include New York, New Jersey, Connecticut, Delaware, Pennsylvania, and Rhode Island will all coordinate together on how to reopen their economies. California, Oregon, and Washington have also begun talks of working together. However, caution by political leaders will be seen in order to prevent a premature reopening causing a second wave of the pandemic. President Donald Trump will remain cautious in working with the governors of each state until an official plan can be made. May 1st has been hinted as a possible lifting of restrictions.
Positive Effect on SIMM
Considering some of the hardest hit states could be lifting their strict orders regarding the coronavirus within the next month, the general SIMM portfolio will see the growth it has been needing. With the optimistic plan that people will be able to freely leave their homes again and put money into the market, various parts of our portfolio will be boosted. These would include our holdings in Apple, Dollar General, Goldman Sachs, Walmart, Ulta, and the Russel 2000 ETF. Our general portfolio will also see gradual increase. Of course, the reopening of the markets will be gradual and slow, however, still very bright news considering previous predictions.
Negative Effect on SIMM
Although this news is wonderfully optimistic, great caution must be taken by politicians in order to prevent a disastrous outcome. For example, if the markets reopen in these states too soon, a second wave of the coronavirus could sweep the United States. This would cause negative reactions all over the market and our general SIMM portfolio. Hopefully, the plans will run smoothly, and our country will avoid another downfall.