As the unofficial start of summer begins with the Memorial Day holiday, there are three trends worth following which may determine how the economy moves past the coronavirus.
The reopening. Most states have begun to open up in some form. A few states have been open for weeks and have not yet seen a resurgence in cases, which if the trend continues, would be a great proxy for the rest of the country.
Don't fight the Fed. Last Sunday on 60 Minutes, Fed Chairman Powell reiterated that the Fed will do whatever it takes to help underwrite the economic recovery. If the Fed, Treasury, and administration continue to throw every resource necessary to help the economy, it will likely work.
American spirit. We are seeing incredible increased demand in online shopping, DIY projects, and more. It seems reasonable that American spirit and optimism can continue to rise as we enter the summer months and states gradually reopen.
When you couple American spirit and states reopening safely, along with continued Fed support, you have all the ingredients required for an economic recovery. Let's see what the next few weeks bring.
Meanwhile, home loan rates are at all-time lows and the housing market continues to see buying demand.
On the other side of the virus, we may very well see a strong housing market for all the reasons above, plus the pent-up demand created by increased household formation.
Better days are surely ahead.