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The Key for the Stock Market to Turn Around

A Reuters report over the weekend showed a critical determining factor is potentially having problems. Within the 2 trillion dollar stimulus package signed by President Trump, this is a provision to help small business owners through a forgivable loan program run by the Small Business Administration. The program called the Paycheck Protection Program, which gives small business owners incentives to keep their employees on the payroll by a forgivable loan. If they follow the rules, the money doesn't have to be paid back. The one concern that I have had regarding the government's relief packages is execution. It is never that they are not doing enough. It comes down to how do you get the money over to those who need it? This has always been the problem with these programs. Small Business Owners don't have the luxury of time with the economy shut down. Here are the highlights of the Reuters report over the weekend: Hundreds of U.S. lenders are struggling to access the technology system for distributing $349 billion of government rescue loans. At the same time, the pot of money is insufficient and will soon be expended, a top banking group warned over the weekend.

Congress last month created the unprecedented program as part of a $2 trillion stimulus package to help businesses that have either shut down or have been dramatically curtailed by the coronavirus pandemic. Borrowers could apply for the loans via participating banks from Friday until June 30. The program is being jointly administered by the U.S. Treasury Department and the Small Business Administration (SBA).

"Community bankers are frustrated with failed technology links and portals. Even those banks with access to the (SBA) system have shared their experiences of significant challenges with user access and latency in application processing," the Independent Community Bankers of America (ICBA) wrote in a letter to the Treasury and SBA on Saturday evening.

The powerful lobby group, which represents thousands of small banks, added that lenders are "experiencing massive delays and (an) inability to process loans or even access the SBA." This reminds me of the time they rolled out Obamacare. It was initially a technological nightmare. Already in the last two weeks, almost 10 million people filed for unemployment benefits. The key is to make sure that unemployment doesn't become long-term versus a temporary scenario. This will be a crucial metric to watch as it could determine when the stock market starts to recover, and things return to normal. Every Thursday at 7:30 am the government releases these numbers for the prior week. It will be crucial that this doesn't get out of hand. Getting people back to work is the main issue. Employment determines everything.