Qwick Takes

This week, our Editor in Chief Lou Carlozo reached out to our community of Experts to inquire about what the stimulus package could mean for the economy and struggling Americans, small businesses, and consumer spending. Check out some of our top commentary:

David Kass, Clinical Professor of Finance at the University of Maryland:

The stimulus package will help stabilize the economy until a vaccine is made available to everyone over the coming months and an additional stimulus is likely to be proposed by President Biden and legislated by the new Congress. The additional unemployment benefits and the $600 checks should boost consumer spending.”

Caleb Silver, Editor in Chief at Investopedia:

Consider the $900 billion stimulus package an appetizer to a much larger main course that will be served in February, depending on the outcome of the GA senatorial elections. It may help people get through a week or two of emergency expenses, and it will help industries like airlines retain employees who are being furloughed, but the extra money going out to individuals and families will not correct the recent slide in consumer spending.”

Scott Ruesterholz, Porfolio Manager at Insight Investment:

The combination of direct checks, unemployment benefits, and payroll protection should boost personal income over the next three months by at least $400 billion, or over 2% of GDP. As public health restrictions slow the economic recovery in Q1, this package will counter weaker labor market momentum and bridge the economy until the vaccine’s roll-out.”

Rohit Arora, CEO of Biz2Credit:

PPP2 should have a bigger impact on truly small companies. It is targeted to benefit them more than mid-sized firms and larger corporations that were able to secure funding during PPP’s first round.”

Gerri Detweiler, Education Director at Nav.com:

New PPP loans, EIDL grants, and PUA benefits will be a lifeline for millions of small businesses and independent contractors, especially smaller businesses. At Nav, small business owners have told us they are very interested in applying for PPP 2.0 despite the rocky rollout of the first round.”

Ken Rees, CEO at Covered Holdings:

We can’t afford to view the economic turmoil of COVID-19 as a one-time event. But it can serve as an impetus for us to commit to a new generation of efficiently run programs for all Americans facing unemployment that can be scaled up when we face the next pandemic or other macroeconomic upheavals.”

Angelique Rewers, founder/CEO of The Corporate Agent:

Many organizations, from trade and professional associations, to magazines to websites were hit hard this year and are looking to bring advertisers back. Now is a great time to take advantage and make sure you are building your marketing list and acquiring new customers.”

Morris Armstrong, Founder & Owner at Morris Armstrong EA LLC:

The new stimulus package simply buys some time for additional solutions. Small businesses got their wishes – additional PPP funds and the ability to take as deductions expenses that were funded by forgiven PPP loans. If the pandemic is accelerating and more shutdowns are in order, this stimulus does little and is poorly targeted.”

Gary Beasley, CEO at Roofstock:

The direct payments and rental assistance in the stimulus bill will be helpful for both tenants and landlords – most of whom are everyday people. People have prioritized staying at home through the pandemic, and it’s critical for the economy that they get any assistance they need to continue doing so.”

Joel Libava, Franchise Selection Specialists Inc.:

While approval for the stimulus package is good news for the stock market, it’s too little too late for a good number of small business owners who are too much in the red. Same goes for the one-time $600 payment to consumers. That said, $900 billion is no drop in the bucket, and the money (in total) will help keep the U.S. economy afloat until the COVID-19 vaccine takes hold.”

Chad Barnsdale, Founder at Unfinished Man:

I believe that the stimulus package will primarily be used by struggling American’s to help reduce their debt after an energetic holiday buying season. Small businesses, especially those in the retail sector, will continue to decline. I’m expecting a record number of bankruptcies in Q1 2021 as earnings continue to be weak, and small business owners come to terms with a virus that’s not going anywhere soon.”

Jeffrey A. Miller, President and Portfolio Manager at NewArc Investments:

The stimulus package will not be enough to stave off a continued recession. The stimulus package was not designed with an economic effect in mind. The latest stimulus is far smaller than the original package of about $3.5 trillion. There is also a time lapse between when that wore off and the new aid will have a significant effect. If these effects seep into consumer confidence, the effect will be even greater. Thus, the stimulus will help, but a larger package was needed, and it was needed sooner.

James Solloway, Chief Market Strategist at SEI:

Considering how long it took to reach this agreement, the output is indeed meager. It amounts to 4%-plus of GDP, which would be large and impressive in an ordinary business environment—but these are not ordinary times. The relief package will support household incomes for only three months and will do very little to sustain small businesses that are impacted by government-mandated lockdowns. In January, we expect another round of tough negotiations, the contours of which will be heavily influenced by the results of Georgia’s run-off election.”

Chris Zingo, Executive Vice President, Americas at Finastra:

The new stimulus package earmarks $15 billion in PPP and SBA loans for minority-owned businesses and those located in low-income communities. This is a necessary step to extend emergency relief to an underserved population. As a fintech provider to many community development financial institutions and minority-led banks, we see firsthand that these financial institutions are on the front lines pushing for financial inclusion and to redefine finance for good.”

Mark Snyderman, COO at Apolline Group, LLC:

The stimulus package is so large that will undoubtedly overall give the economy a strong boost and inflate numbers, but the reality is it’s too late to salvage the damage done to small businesses, in particular, the restaurant and hospitality industries. Another PPP program that is complex and convoluted, small checks of $600 to homeowners struggling to keep the lights on and food on the table and it took months to get this out? Perhaps the stimulus package pushes back the cliff for some to fall into bankruptcy but the foreseeable future will have a large number of bankruptcies and foreclosures on both the residential and commercial side.”

Stephen Akin, Registered Investment Advisor at Akin Investments:

The extension of the PPP will help those small businesses that have managed to survive to this point. The financials will benefit from this reinforced funding for the PPP. It is interesting that the financials have firmed up a bit in the market. It would be a positive if that sector would finally begin to lead as the market works higher.”

Kevin Flanagan, Head of Fixed Income Strategy at WisdomTree:

A key impact from the recently passed federal stimulus package is that the US economy may have now avoided the potential for a double-dip recession in Q1 of the new year. With renewed funds coming to households sooner than later, consumer spending should be supported to start 2021. If the response to the CARES package is any guide, spending could be centered on food and household related items.”

Stay tuned for next week’s Qwoted Qwick Takes!

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