Weekly Flash Report 9/4 2020.09.04

Current Happenings

  • U.S. debt reached its highest level relative to the size of the economy since World War II. The federal budget deficit is expected to hit $3.3T this year while government revenues fell 10%.
  • The U.S. economy added 1.4M jobs in August. The unemployment rate dropped to 8.4% from 10.2%.
  • The Centers for Disease Control and Prevention has notified public health officials in all 50 states to prepare for the distribution of a COVID-19 vaccine as early as November 1st.
  • Robinhood faces SEC fine for failing to disclose sale of client orders to high speed trading firms.

Regulatory Chatter and Industry Trend

  • An ERISA lawsuit has been filed against NVIDIA Corp.’s 401(k) plan. The suit alleges 401(k) plan fiduciaries failed to use the lowest cost share classes or consider CIT versions of mutual funds in the plan. The claim states the switch to CITs in 2018 was too little too late as the damages were already baked in.
  • Biogen has been sued again for 401(k) plan mismanagement. The lawsuit challenges Biogen’s use of actively managed Fidelity Freedom Funds over the index version of the target-date fund suite. The fees charged by the active suite are many multiples higher than the index suite.

Investment Manager News

  • Empower Retirement in $2.4 billion deal to acquire MassMutual’s retirement plan business. The acquisition will increase Empower’s participant base to more than 12.2 million and record-keeping assets to about $834 billion.

What's Ahead

  • EIA Petroleum Status Report – September 10, 2020
  • EIA Natural Gas Report – September 10, 2020
  • Consumer Price Index –September 11, 2020
  • Baker-Hughes Rig Count – September 11, 2020

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