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What a week! The U.K. finally signed a Brexit deal with the EU, distribution of the Covid vaccine continues to gain momentum and at the last minute, the president signed the stimulus bill negotiated by the GOP. Since February of this year, stimulus spending has hit the $3.5 trillion mark.

U.S. equity markets were mostly flat as retail sales posted a 2.4% gain for the critical November through December 22 period. We continue to monitor the progress of the Santa Claus Rally I wrote about in last week’s market commentary. I’ll report next week on how it turned out for 2020. I’ll also be focusing on what we can expect in 2021. While no one has a crystal ball (this year proved that) there are things we pay attention to in helping guide our clients toward their financial goals. Let’s just hope 2021 is a little more boring and uneventful.

A note to our clients: We have noticed an improvement in international equities over the last couple of months. As such, we have added developed and emerging market exposure to many of our client’s portfolios.

If you have any questions, please contact me.

Wishing you and your family a Happy Holiday Season.

The Markets and Economy

Economic forecaster’s inability to correctly analyze how businesses and consumers would respond to the pandemic this year echoes the black eye suffered by pollsters in this year’s presidential election. With no comparable events to help analysts, predictions varied from “barely registering with the economy” to “the worst economic downturn since the Great Depression.” Since the stock market’s steep, rapid selloff in late March, the economy and stock market have been regaining ground more than anyone expected. If you find that strange, consider that China, where the virus started, saw its stock market soar 41% year-to-date
The race for wireless licenses continues at breakneck 5G speed. The Federal Communication Commission’s ongoing sale of wireless licenses fetched a record $69.8 billion after three week’s of bidding. Companies are investing billions of dollars in the next wave of fifth-generation wireless coverage. 5G is expected to support a 100 times increase in traffic capacity and network efficiency.
The U.K. faces more challenges as a new highly contagious strain of Covid-19 was discovered a couple of weeks ago. EU countries have imposed new travel restrictions on visitors and commercial drivers. Britain is already dealing with extremely high infection rates. Here at home, all travelers from the U.K. will be required to produce a negative Covid-19 test result before boarding a flight to the U.S
Household spending dropped for the first time in seven months and layoffs remained elevated as a surge in the coronavirus weighed on economic activity. Consumers reduced spending by 0.4% in November according to the U.S. Commerce Department.
Britain reached a deal with the 27 member countries over the U.K.’s exit from the EU. Ambassadors now have the job of examining the details of the deal. British Parliament will meet on December 30 to ratify the accord.
President Trump finally signed the Covid-19 aid bill late Sunday. Among other things, the bill provides $600 per taxpayer subject to income limitations, continued unemployment benefits, a federal eviction prohibition through January 2021, and funding for running the federal government through next September.
Retail sales grew 2.4% over last year from November through December 22, a crucial selling period for retailers. As expected, the majority of the increase was from online shopping.

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The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results.

Note: All figures exclude reinvested dividends (if any). Sources: Bloomberg, Dorsey Wright & Associates, Inc. and The Wall Street Journal. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.

Securities offered through Triad Advisors, member FINRA/SIPC. Investment advice offered through Resources Investment Advisors, LLC, an SEC-registered investment adviser. Resources Investment Advisors. LLC and Vertical Financial Group are not affiliated with Triad Advisors.

David Kover on December 28th, 2020

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2020 is Almost Over