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Markets Off Slightly as FDA Approves Covod-19 Vaccine. Distributions to Begin This Week.

U.S. equity markets posted minor losses last week as Americans awaited FDA approval for the Covd-19 vaccine. The approval came early Saturday with the focus now turning to the logistically largest medical distribution in history. 21 million health-care workers and 3 million long-term care residents are expected to receive the immunization first.

While shots are expected within days, economists expect the U.S. economy will see its recovery slow over the next few quarters before the impact of the Covid-19 vaccine can take effect. We may already be seeing that as the number of people seeking unemployment benefits surged last week.

The estimated earnings decline for the S&P 500 for 2020 is -13.7%. If actual earnings do come in for 2020 at -13.7%, it will mark the largest annual earnings decline reported by the index since 2008 (-25.5%). The unusually large decrease in earnings can be attributed to the negative impact of COVID-19 on a number of industries in the index. At the sector level, four are projected to report year-over-growth in earnings, led by the Health Care sector. Seven sectors are expected to report a year-over-year decline in earnings, let by the Energy, Industrials, Consumer Discretionary, and Financial Sectors.

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The Markets and Economy

  • Logistics hiring skyrocketed in November as transport and distribution companies staffed up on expectations for an unprecedented holiday-season rush. Delivery, warehousing and trucking operators added a combined 131,400 jobs last month.
  • The number of U.S. workers seeking unemployment benefits rose sharply last week by 137,000 to 853,000, the highest since September according to the Labor Department.
  • According to the Census Bureau, 28% of the households in the U.S. in 2020 were made up of just 1 individual living alone. Another 35% of U.S. households are comprised of just 2 people, of which 65% (of the 35%) are a married couple.
  • Car sales in China, the world’s largest auto market, rose for a fifth straight month in November. Strong demand was fueled by Beijing’s stimulus policies.
  • Chinese exports jumped 21.1% year-over in November. This was the strongest performance since 2011. Surging global demand for personal protection equipment and medical gear were the main contributors for the increase.
  • An estimated 10,800 Americans will turn 65 years old each day next year (2021). This group represents the 11th year of 19 years of “Baby Boomers” turning age 65. By 2029, an estimated 11,500 Americans will turn 65 years old each day.
  • Small American businesses, defined as having less than 500 employees, are responsible for 44% of U.S. economic activity according to the U.S. Small Business Administration.
  • Facebook was hit with antitrust suits from 46 U.S. states. Spearheaded by the Federal Trade Commission, the broad antitrust lawsuit allege the social-media giant engaged in a years-long campaign to buy up or freeze out new technology companies that may, one day, become business rivals.

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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.