Quote of the Week

“You can’t ride two horses with one butt.” – Daniel New and various others

Technical Corner 

Last week the markets were slightly up with the Dow up +0.44%, the S&P 500 up +1.25%, and the Nasdaq up +3.05%. It looks like the virus is losing to the vaccine, especially now with the Moderna vaccine’s approval coming out soon. We believe the positive markets will continue for the foreseeable future. Thus, we have positioned the managed portfolios (DBU accounts on your statements) and the Variable Life and Variable Annuities accordingly. We have had a nice run and are at the top end of the risk ranges. The markets may take a breather for a while, but no one knows.

Today, the markets sold off early apparently due to the new virus strain in England, which is supposedly 70% more contagious. At the end of today (Monday), the markets rallied back to almost even for the day. With the new Covid-19 Relief Act’s apparent passage, I was expecting a huge upward day today, but the rally back to almost even gives me hope.

We are solidly in Quad II with growth increasing and inflation increasing, which is good for stocks. We are positioned to take advantage of growth and inflation sensitive investments.


Larry’s Thoughts

The Congress just passed the COVID-19 relief bill. The Washington Post did a great job spelling it out and I’ve printed it below so you can see what’s in it. Here is the link to see it on their website:


COVID-19 Emergency Relief Package — Topline Summary of New Agreement
Direct Economic Relief for Workers and Families $286 billion

($120 billion in Unemployment Insurance and $166 in Economic Impact Payments)

Unemployment Insurance: Democrats successfully fought to bring back the enhanced federal unemployment insurance bump, which expired in July. This bill provides an additional $300 per week for all workers receiving unemployment benefits, through March 14, 2021. This bill also extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others in nontraditional employment, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of federally-funded unemployment benefits to individuals who exhaust their regular state benefits. The extension was critical in preventing as many as 14 million Americans from losing this economic lifeline at the end of the Additionally, the bill increases the maximum number of weeks an individual may claim benefits through regular state unemployment plus the PEUC program, or through the PUA program, to 50 weeks. The bill also provides an extra benefit of $100 per week for certain workers who have both wage and self-employment income but whose base UI benefit calculation doesn’t take their self-employment into account.

Direct Payments: Democrats secured an additional round of Economic Impact Payments of $600 for individuals making up to $75,000 per year and $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each child dependent. This means a family of four will receive $2,400 in direct payments. Democrats also successfully pushed for a provision, which is retroactive to the CARES Act, to expand these direct payments to mixed-status households, importantly providing immigrant families across the country with access to this financial relief.

Small Business $325 billion Democrats secured critical funding and policy changes to help small businesses, including minority-owned businesses, and nonprofits recover from the pandemic. This deal includes over $284 billion for first and second forgivable PPP loans, dedicated set-asides for very small businesses and lending through community-based lenders like Community Development Financial Institutions and Minority Depository Institutions, and expanded PPP eligibility for 501(c)(6) nonprofits, including destination marketing organizations, and local newspapers, TV and radio broadcasters. $20 billion is included for new EIDL Grants for businesses in low-income communities, $3.5 billion for continued SBA debt relief payments, and $2 billion for enhancements to SBA lending. This deal also includes $15 billion in dedicated funding for live venues, independent movie theaters, and cultural institutions.
Support for Community Development Financial Institutions and Minority Depository Institutions $12 billion Democrats successfully pushed to include $12 billion in funding for CDFIs and the creation of a new Neighborhood Capital Investment program to support CDFIs and MDIs and help low-income and minority communities withstand the economic impact of the COVID-19 pandemic and respond to this unprecedented economic downturn.
Transportation $45 billion Democrats secured major funding to provide relief to transit agencies, airlines and airline contractors, airports, state DOTs, the motorcoach industry, and Amtrak. Specifically: $15 billion for airline payroll support, $1 billion for airline contractor payrolls, $14 billion for transit, $10 billion for state highways, $2 billion for airports and airport concessions, $2 billion for the private motorcoach, school bus, and ferry industries, and $1 billion for Amtrak.

In particular, keeping transit agencies running will allow those who must take transit—essential workers, seniors, low-income and communities of color—to get to work and access services. For example, African

Americans comprise 12% of the US population but make up 24% of public transit riders; across modes, bus riders are 30% Black and 35% white while rail riders are 19% Black and 46% white.

The $14 billion Democrats delivered in transit aid for rail, bus, paratransit, and more, will keep transit agencies from implementing draconian cuts that would otherwise disproportionately impact communities of color.

Vaccines, Testing and Tracing, Community Health and Health Care Provider Support $69 billion Democrats secured essential funding for vaccine procurement and distribution, providing roughly $20 billion to BARDA for procurement of vaccines and therapeutics, nearly $9 billion to the CDC and states for vaccine distribution and more than $3 billion for the strategic national stockpile. This includes $300 million specifically directed to high risk and underserved areas for distribution, including communities of color.

The bill provides more than $22 billion, all sent directly to states, for testing, tracing and COVID mitigation programs. Of this total, $2.5 billion will be sent out as grants specifically targeted at needs in underserved areas, including both communities of color and rural communities.

Democrats also secured $4.5 billion in mental health funding, $9 billion in support for health care providers, and more than $1 billion for NIH to research COVID-19. $1 billion in direct funds to the Indian Health Service to carry out these services.

Schools $82 billion Democrats secured critical funding for states, K-12 schools, and institutions of higher education that have all been significantly impacted by the coronavirus pandemic. Similar to the CARES Act the emergency education relief funds are reserved as follows:

  • Relief for outlying areas and the Bureau of Indian Education: $818.8 million
  • Governors Emergency Education Relief Fund: $4.05 billion
    • Includes a set aside for services to private K-12 schools to be administered by public agencies.
  • Elementary and Secondary School Emergency Relief Fund (Public K-12 schools): $54.3 billion
  • Higher Education Emergency Relief Fund: $22.7
    • $20 billion distributed to all public and private non-profit institutions of higher education.
    • $908 million to for-profit colleges to provide financial aid grants to students.
    • Includes set-asides of an additional $1.7 billion for

HBCUs, tribal colleges, and Minority-Serving Institutions and $113.5 million for institutions with the greatest unmet needs or those not served by the primary formula, such as independent graduate schools.

Rental Assistance $25 billion Democrats fought to establish the first-ever emergency federal rental assistance program to be distributed by state and local governments. These funds will be targeted to families impacted by COVID that are struggling to make the rent and may have past due rent compounding on itself. These families will be able to utilize this assistance for past due rent, future rent payments, as well as to pay utility and energy bills and prevent shutoffs. $800 million is reserved for Native American housing entities. It also includes an extension of the existing CDC eviction moratorium through January 31, 2021.
Nutrition and Agriculture $26 billion Democrats successfully fought for $13 billion to increase SNAP benefits by 15%, provide additional funding for food banks and senior nutrition programs, and to ensure college students have access to SNAP. This bill also dedicates $614 million for nutrition assistance for Puerto Rico and the territories, allocates emergency funds for school and day care feeding programs and includes critical improvements to the P-EBT program. The bill also included $13 billion for direct payments, purchases and loans to farmers and ranchers who have suffered losses due to the pandemic. It also includes funds to support the food supply chain through food purchases, donations to food banks, and support for local food systems.
US Postal Service No score. Democrats successfully fought to convert the CARES Act $10 billion loan into direct funding for USPS without requiring repayment. These funds will be for operational costs and other expenses resulting from the COVID- 19 pandemic.
Child Care $10 billion Democrats successfully secured $10 billion in emergency funds for the child care sector through the CCDBG program. These funds maintain the flexibility given to states through the CARES Act and can be used to provide child care assistance to families, and to help child care providers cover their increased operating costs during the pandemic. This emergency relief will help stabilize the child care market and allows stats to expand child care assistance to essential workers and working families who are in great need of child care services.

The bill also includes $250 million for Head Start providers to ensure they are able to continue to safely •serve low-income children and families throughout the pandemic.

Broadband $7 billion Democrats successfully secured $3.2 billion in emergency funds for low-income families to access broadband through an FCC fund. Additionally, democrats created a $1 billion tribal broadband fund. Democrats secured $250 million dollars in telehealth funding and $65 million to complete the broadband maps in order for the government to effectively disperse funding to the areas that need it most. Last, Democrats are providing $2 billion to small telecommunication providers to rip out Huawei/ZTE equipment to replace it with secure equipment and a new $300 million gant program to fund broadband in rural areas.
Miscellaneous Provisions Coronavirus Relief Fund Extension: This bill extends the availability by one year (until Dec. 3 1, 2021) for funds provided to states and localities by the Coronavirus Relief Fund in the CARES Act.

Extension of the Employee Retention Tax Credit: The bill importantly extends and expands the refundable Employee Retention Tax Credit (ERTC), which was established in the CARES Act. The extension of this tax credit will help keep additional U.S. workers on payroll and more small business and nonprofits across the country afloat.

Special “lookback” for EITC and CTC: The bill includes a special temporary rule allowing lower-income individuals to use their earned income from tax year 2019 to determine the Earned Income Tax Credit and the refundable portion of the Child Tax Credit (i.e., the Additional Child Tax Credit) in the 2020 tax year. This will help workers who experienced lower wages this year, due to the pandemic, to get a larger refund that is consistent with their earnings from prior filing seasons.

Contractor Pay Extension: This bill provides federal agencies the authority to reimburse contractors for the costs of paid leave during the COVID pandemic, for contractors who are temporarily unable to work due to facility closures or other rstrictions. This is particularly important for our national labs, like Brookhaven National Laboratory, and national security facilities.

***Disclaimer: this document is a topline summary and does not include every single item in the package***


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These are the opinions of Larry Lof and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 is an index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

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