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This ETF can help you ‘buffer’ against all the market volatility

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It’s been a wild week for stocks, but there’s one firm that could help you weather those wild swings using ETFs.

Innovator Capital Management has a set of ETFs with built-in “buffers” for five broader market indexes: the S&P 500, Nasdaq 100, Russell 2000, MSCI EAFE and MSCI Emerging Markets indexes. The firm calls them Defined Outcome ETFs that they say help protect investors from market swings to the downside.

There are three different built-in “buffer levels” in the ETFs that hedge investors from 9% downside, 15% downside or a 30% pullback depending on which level they choose. Innovator offers a Buffer ETF, Power Buffer ETF and Ultra Buffer ETF for every month of the year (they correspond respectively with the three buffer levels).

In total, there are 38 Defined Outcome ETFs that cover five broad market indexes.

With these ETFs, investors “have an opportunity to get into the market, know that they have a buffer on the downside, but [also know] they’re going to have participation on the upside,” said Innovator CEO Bruce Bond on CNBC’s “ETF Edge” Wednesday.

But given that the ETFs do have a built-in buffer, there is a cap to how much upside investors can get depending on the buffer level they choose. A 9% buffer level yields a higher return than a 30% downside buffer level.

“What you’re doing is you’re giving up some of your potential upside to get the downside buffer,” Bond said.

And since the different months reset, Astoria Portfolio Advisors’ John Davi believes the ETFs offer a less traditional play for investors.

“I think this is an alternative to people that don’t want to go out, buy their own puts, pick their own strikes and have to roll the options maturities,” Davi, his firm’s founder and chief investment officer, said in the same “ETF Edge” interview. “That’s what I think the ETF is doing.”

Innovator is set to list their March series of buffer ETFs on March 2nd, according to the firm’s product website. Its Defined Outcome ETFs passed the $2 billion mark in assets under management this week.

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World Health Organization holds press conference on the coronavirus outbreak

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World Health Organization officials are holding a press conference to update the public on the coronavirus outbreak, which has now infected more than 1.2 million people globally.

On Friday, WHO officials warned that countries that rush to lift quarantine restrictions too soon risk “an even more severe and prolonged” economic downturn from the coronavirus pandemic and potentially a resurgence in COVID-19 cases.

“We are all aware of the profound social and economic consequences of the pandemic,” WHO Director-General Tedros Adhanom Ghebreyesus said during a briefing at the agency’s headquarters in Geneva on Friday. “Ultimately the best way for countries to end restrictions and ease their economic effects is to attack the virus.”

WHO officials also cautioned that more young people are becoming critically ill and dying from the virus, even young people with no reported underlying health conditions. Dr. Mike Ryan, executive director of WHO’s emergencies program, said it’s a mistake to believe that the virus only impacts older people and those with underlying conditions.

Globally, the coronavirus has infected more than 1,280,000 people and has killed at least 69,789, according to data compiled by Johns Hopkins University. In the U.S., the coronavirus has infected at least 337,600 people and has killed at least 9,648.


Read CNBC’s live updates to see the latest news on the COVID-19 outbreak.



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Sen. Marco Rubio expects more relief bills

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Senators acknowledge they will have to pass another emergency bill to limit the damage from the coronavirus pandemic, Sen. Marco Rubio said Monday. 

The Florida Republican, chairman of the Senate Small Business and Entrepreneurship Committee, said Congress will likely have to expand pieces of the $2 trillion stimulus package passed last month. Rubio expects an additional recovery bill after lawmakers assess the wreckage the outbreak leaves in its wake. 

“The appetite is there,” he said in a CNBC “Squawk Box” interview. “I think everyone I’ve talked to recognizes we’re going to have to go back and do more, and probably more than once.” 

The government has only started the rapid, at times rocky implementation of the largest emergency spending package in U.S. history. Designed to bolster resources for an overburdened health care system and blunt economic destruction as COVID-19 spreads, the law includes strengthened unemployment benefits, $350 billion in small business loans and $500 billion in loans and grants for companies, states and municipalities, among other measures.

Senator Marco Rubio (R-FL)

Michael Brochstein | SOPA Images | LightRocket | Getty Images

The pandemic’s effects have only started to emerge. The U.S. has at least 337,600 cases of COVID-19, and at least 9,648 deaths have been linked to the disease, according to data compiled by Johns Hopkins University. Already, roughly 10 million people have filed new unemployment claims as businesses shut down to prevent more infections.

As coronavirus tears across the country, Rubio expects more action from Congress — including to reload the small business program he helped to craft. 

“I believe Congress is going to have to go back in some way, shape or form and address additional things that have emerged since [the first bill passed],” he said. “That includes, by the way, replenishing the funds on the small business loan program. Because I believe that those funds, given the demand, will not reach June 30.”

Lenders started to accept applications for small business loans on Friday, only a week after the emergency relief bill became law. Both loan seekers trying to cover rent and keep employees on payroll, and the banks doling out the money, expressed frustration about the program’s rollout. 

Rubio acknowledged issues but said, “It will get better. It has to get better.” 

In recent days, congressional leaders have outlined what they want to see in an additional relief bill. House Speaker Nancy Pelosi is pushing for another bipartisan bill that builds on the $2 trillion package, with more direct payments to individuals, additional small business funding, an extension of the enhanced unemployment insurance and more state health-care grants. 

She hopes to move legislation forward after the House returns on April 20, she told members in a letter Saturday. 

Senate Majority Leader Mitch McConnell said Friday that the next bill should address the shortcomings of the last legislation, starting with the health-care response. But the Kentucky Republican told the Associated Press he is “not in favor of rushing” to the next phase before he sees how effective the previous bill is. 

Rubio said Monday that the “bigger challenge” in passing a bill is “logistical.” Members of Congress are currently working from their states and districts, fearing a return to Washington as the number of lawmakers presumed to have COVID-19 grows. 

Congress can pass bills unanimously with a few people in the Capitol. But opposition from only one member can blow up those efforts — as seen when Rep. Thomas Massie’s objection to a unanimous vote forced House members to rush to Washington to pass the $2 trillion relief package last month. 

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How to Live in the Face of Fear: Lessons From a Cancer Survivor

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As the coronavirus pandemic spreads, the normal touchstones of everyday life have vanished without so much as a warning. In their place are terrifying thoughts about the future, about loss and about mortality.

For Kate Bowler, a historian at Duke Divinity School, this is familiar terrain. In 2015, when she was 35 and a new mother, Dr. Bowler was diagnosed with incurable cancer, and uncertainty became a way of life. She explores what it is to be human in dark times in her best-selling memoir, “Everything Happens For A Reason (and Other Lies I’ve Loved),” and her podcast of the same name.

During the pandemic — which has intensified during the Christian season of Lent — Dr. Bowler has been offering daily reflections on social media about living in fear. In a conversation with The Times, which has been edited for length, Dr. Bowler reflected on why forcing yourself to stay positive is not always best, the human longing to love and be loved and why living in constant fear makes it important to have two different routines: one for day and one for night.

It feels so familiar. That feeling of waking up in the morning and for a moment you don’t believe it’s real — I remember that feeling of not remembering I had cancer, and then remembering all over again, every day. I think so many people are waking up each day and forgetting that they are scared that they can’t hold their mom’s hand in the residential care facility they’re at. Or their sister is about to have a baby, and there are concerns that people can’t even have their partners in the room with them as they have what they hope will be a perfectly healthy birth.

On the other hand this situation is totally new to me. It’s very bizarre to share that feeling with everyone and realize: Wow, we are all feeling especially delicate, at the same time.

I think it’s painful for everyone to know that there’s just not a lot of room between anybody and the very edge. It really does run counter to the whole American story. It’s a story about how scrappy individuals will always make it, and it’s a story about how Americans’ collective self-understanding will always build something that will save the nation. And currently both things are not true. Everyone else in the world will suffer too, but I don’t think they will suffer nearly the same cultural disillusionment because they didn’t have that account of exceptionalism.

The idea that we’re all supposed to be positive all the time has become an American obsession. It gives us momentum and purpose to feel like the best is yet to come. But the problem is when it becomes a kind of poison, in which it expects that people who are suffering — which is pretty much everyone right now — are somehow always supposed to find the silver lining or not speak realistically about their circumstances.

The main problem is that it adds shame to suffering, by just requiring everyone to be prescriptively joyful. If I see one more millionaire on Instagram yell that she is choosing joy, while selling journals in which stay-a- home moms are supposed to write joy mantras, I am going to lose my mind!

You mean when I’m lightly crying and sitting in my pajamas?

Especially when you’ve drunk too deeply from the wells of invincibility, you get in a time like this and I think we feel confused. Like it’s 8 a.m., why am I still tired?

There was a rhythm I got into with cancer that has served me well right now. Every day sort of has an arc to it. There’s a limited amount that you’re going to be able to face as you stare into the abyss. Being able over the course of the day to track your own resources will help you know how to spend them.

There’s just a minute where you know, OK, I’m starting to hit the wall. Time to turn the boat around. There’s only so much we can do, and in the face of unlimited need we have to not just wildly oscillate between sort of intense action and then narcolepsy.

How do we how feel the day and allow ourselves to be human inside of it? I think that’s really tricky work.

Daytime: My eyes open. There is a six-year-old boy in pajamas. I feed him cereal, then we snuggle. Then I decide there’s only a couple things I can do in the day. Then I launch myself toward them. Then I get overwhelmed midway through the afternoon. You just take a minute. You see who’s left to care about. Then at some point you’ll realize that you’re about to hit the wall.

Nighttime: What’s most important, at least in my little routine, is you pick a time and then you call it. So like 7 p.m., no more new information. No more starting sentences with, “Did you hear about the….” And then start this sort of gentleness. I have positive music and cheese ball movies and more snuggles, and then go to bed earlier than it seems socially acceptable. Because if you violate that rule, then you’ll break the next day.

If the days are really full and heavy, to focus on the absurdity is so great. Small delight is really fun. I’ve been in onesie Star Wars pajamas so much more this week. Get really in to a reality show that people would lose respect for you if they knew that you watched it. Make a commitment to something unbelievably dumb right now — now’s the time.

The trick is to find meaning without being taught a lesson. A pandemic is not a judgment, and it will not discriminate between the deserving and the undeserving. I think moments like this reveal to me God’s unbelievable love for us.

The second I see all these nurses and doctors going out there trying to save somebody else’s life, I realized it’s such a window into how gorgeous it is to be a human being. And the more we see fragility, sometimes the more we understand what an incredible miracle it is to have been created at all. So I think just having a higher and higher view of our gorgeous and terrible humanity.

We’re learning right now in isolation what interdependence feels like and what a gift it is, and the more we’re apart the more we realize how much we need each other. We’re allowed to be like beautifully, stupidly needy right now. We’re allowed to FaceTime people and be like, I feel like a mess, and all I want to do is be loved.

For me part of the joy of prayer is having abandoned the formula. I have no expectation that prayer works in a direct way. But I do hope that every person, religious or not, feels the permission to say, “I’m at the edge of what I know. And in the face of the sea of abyss, someone out there please show me love.” Because that’s to me the only thing that fills up the darkness. It’s somehow in there, the feeling that I am not for no reason. And that doesn’t mean anything better is going to happen to me, but in the meantime that I will know that we all are deeply and profoundly loved. That’s my hope for everybody.





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