Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

Going to the grocery store during the early days of the coronavirus crisis felt like preparing for a moonwalk. We had our masks, gloves, and hand sanitizer ready. There were long lines, certain essential items were stocked out, and emotions were fraught. My wife and I tried to do some grocery shopping online, but all the available delivery times were taken, meaning my wife or I had to intrepidly venture out to buy food. As we have adjusted to this new world, I have noticed a steady stream of shiny foil delivery bags showing up at my front door on a regular basis. My lovely wife has discovered the convenience of online grocery shopping, and I do not think she is likely to go back to the old way of grocery shopping any time soon. It’s not just my household – propelled by high demand from nationwide COVID-19 lockdowns, online grocery sales stand to surge 40% this year.

The coronavirus pandemic has been a disruptor unlike any seen in decades, forcing sweeping changes to how we live, work, and shop. Even after social-distancing requirements relax, many behavioral changes will likely persist. While e-commerce sales have already been moving higher, lockdowns have accelerated these trends by several years. This year is setting up to be an e-commerce inflection, as the combination of sheltering-in-place, lower spending on experiences, and government stimulus have all driven more dollars online. It is estimated that e-commerce grew 58% year-over-year in April, four times faster than in 2019. All told, e-commerce could grow 25% annually in 2020, even if consumer spending weakens in the second half.

How the economy performs in the second half of year will largely depend on whether Congress can pass another fiscal package. While the Democrats in the House passed a $3.5T relief bill, the Republican-led Senate would like something closer to $1T. We ultimately believe they will meet somewhere in the middle at around $1.5T. As they say, politics is an art of compromise. However, there is a lack of visibility in terms of timing. If they do not pass something soon, it will likely be pushed back until after the election. Markets are unprepared for such a delay as the economic fallout would be significant.

Focusing on this week’s economic data, there will be potentially market-moving statistics coming out. As always, we will be focused on the jobs report. Unfortunately, last week we saw the 23rd out of 24 weeks of 1 million+ job losses. The good news is that continuing claims are definitely trending in the right direction as more people are being called back to work. The other statistic that will be interesting is motor vehicle sales. As the story goes, when housing and autos are both improving at the same time, the overall economy is very likely to be improving. Vehicle sales in August are coming in on the strong side, which helps explain why Ward’s tally of scheduled vehicle production just went up from 10.8m to 11.1m.

Data deck for August 31–September 4: