Equity futures were lower in the overnight session but have rebounded this morning following the Fed’s announcement of an additional $2.3 trillion of lending support. The central bank will expand facilities for corporate, municipal, and asset-backed debt, as well as establish additional support for small and mid-sized businesses. The latter includes the creation of a $600 billion Main Street Lending Program, which will purchase eligible loans for companies up to 10,000 employees or $2.5 billion in annual revenue (loans sizes may range from $1 million to $150 million). A new $500 billion municipal facility is also being created to purchase short-term notes from states and counties with more than 2 million residents and municipalities with more than 1 million residents. Any facilities that involve credit risk will continue to be capitalized by the Treasury Department to absorb any potential losses. In short, the Fed is doing everything in its power to ensure that a healthcare crisis doesn’t become a credit crisis while the economy is on lockdown. Fed Chair Jerome Powell will be participating in Brookings Institute webinar this morning.

Jason Haley
Chief Investment Officer