LenderHub

Since March, social distancing practices enacted to help slow spread of the coronavirus have plunged us all into a “new normal” of staying at home, self-servicing, shopping online, and curb-side grocery pickup. While there are still many uncertainties about the long-term impact of the coronavirus on our lives and economy, one thing that’s certain is that the world is going to be different on the other side.

What happened:

Last week was shaped around Fed Chairman Powell’s speech to the Peterson Institute for International Economics. The Chairman warned that the economic recovery might be a prolonged one with the recovery period lasting until late 2021. He also restated what most acknowledge about the 2^nd Quarter—it will be awful.

Recently, SWBC Financial Institution Group’s CEO, Mark Hein, sat down with Lauren Culp, publisher and CEO of CU Insight to discuss how SWBC is helping credit unions and their members during these unprecedented times.

What happened:

From the “Never thought I was going to see that!” department, the January 2021 Fed Funds Futures contract crossed the Rubicon and closed over 100, which means an expectation of a negative Fed policy rate.  What makes this even more “interesting” is that this occurred BEFORE Friday’s Employment report which, while expected to bad, felt even worse when the numbers posted.

It seems like every time a sudden and severe shock hits the financial markets, all the fancy hedge fund investment strategies that use monikers like, “Enhanced Return,” or “Alpha Plus” go from being perfectly fine to gone within a month. This has happened in the major market blow-ups in 1998, 2001, 2008, and 2020, with a few notable semi disasters (2002, 2013, 2016) thrown in between.

In the past decade, the digital transformation has reshaped how credit unions are expected to interact and communicate with their borrowers. This is due in large part to advances in Fintech and evolving consumer expectations. As your member base shifts to a larger number of millennials and their younger Gen Z counterparts, traditional forms of communication will likely fall on deaf ears.

What happened

While stocks finished relatively unchanged for the week, and corporate bonds were steady, the market didn’t feel good at all as we went into the weekend. Corporate earnings have been as awful as most suspected, but the big-tech companies like Apple and Amazon reporting dismal outlooks seemed to surprise. These companies along with other tech giants like Microsoft, Facebook, and Google make up nearly 20% of the S&P 500 on a weighted basis.

As consumer demand for more online banking services grows, fraudsters are finding more and more ways to exploit these services. While not a new scheme, online account origination fraud has grown in part because of the prevalence and ease of use of online banking services, and in part because of the number and scope of data breaches allowing bad actors access to a large amount of consumer data.

Following this week’s stunning collapse of WTI crude oil exchange-traded funds, and exchange-traded notes, both referred to as Exchange-Traded Products (ETPs), retail investors were tagged with huge losses. The event was probably best summed up by cocky, professional oil traders as a fight between “muppets and sharks.”

What Happened

It was another wild week in the financial markets—with oil taking the crazy prize. We are not sure if anyone had seriously thought before April 2020 that a hard commodity like oil could ever trade negative. On Monday it did, as anyone holding a May WTI contract that did not have the ability to take delivery of 1,000 barrels of WTI crude (the size of one contract) began paying those who had somewhere to take delivery as much as $40 a contract.