Stocks climbed Monday to kick off August trading as economic stimulus talks are being discussed on Capitol Hill and tech stocks continue to soar.
The expiration of emergency unemployment benefits, which gave millions of Americans $600 in pandemic unemployment assistance, has markets looking to Congress for a follow-up stimulus package, but weekend talks passed without a deal.
Lawmakers on Capitol Hill carried talks on a new stimulus package into the weekend Saturday, and while both sides hailed "good progress' from the meetings, Republicans and Democrats remain at least $1 trillion apart on their proposed bills.
Just last week, Jim Cramer penned a Real Money column focusing on how rough the month of August could be if they let the $600 unemployment assistance run out.
And now it officially has.
So why is August going to be the "month the pandemic really hits?"
"First, when the $600 additional benefits, meant to actually keep you at home rather than work and spread COVID, goes away, you will see a contraction in consumer spending much larger than bricks-and-mortar retail is ready for. A $1,200 check helps, but helps who? Robinhood traders? I would say Walmart (WMT) , Target (TGT) , Costco (COST) , Home Depot (HD) and, of course Amazon (AMZN). Second, rent. When COVID hit and people stopped paying rent, landlords were able to take the security deposit away and pay their own mortgage with it," wrote Cramer.
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"That was April and May's money. Banks offered forbearance on their mortgages if you applied for it. Very few did. I think with the extra $600 running out a lot of good mortgages turn bad and the requests will be made to forbear, That will cause huge problems for the banks, which is why they trade so poorly. I would be very careful of any REIT that has bricks-and-mortar tenants or renters," he continued.
Watch the video above for more.
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