In our fourth podcast during the COVID-19 pandemic, Joe Barry, Pat Barry, Kate Alves and Dan Pinheiro discussed questions that we've recently gotten from clients. Several of the key discussion points are shown below, and you can listen to the full podcast using the button at the bottom. As always, please reach out to your team at Barry with questions about the information that is covered.
- What has been the impact of stimulus from the Fed and U.S. Government? The U.S. government and Federal Reserve provided massive fiscal stimulus since our last podcast. This action has supported the market following the March 23rd lows. In particular, this action has helped calm the corporate bond market. While the market has responded positively, there is still a lot of uncertainty in the markets right now.
- What are the long-term implications of the pandemic on consumer habits? In terms of historical lessons, we can look to the Great Depression. The generation that came out of the depression (the parents of many of our clients) was very debt-averse. We could see COVID-19 have the same impact on consumer spending habits, where Americans are more frugal with their money and only purchase items that they have the cash flow to support (rather than relying on debt financing). The net impact could be a decrease in per-capita spending in the years and decades following the pandemic.
- What sectors may benefit from changing consumer habits? We talk a lot about the needs versus wants for U.S. households. Companies that provide needed products and services will likely have an edge when compared to companies that provide discretionary products or services.