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Steve's Newsletter

Steve's January 2021 Newsletter

Looking Forward!

The story of the U.S. economy and stock markets in 2020 were three huge shocks: the global pandemic, racial unrest and a nation divided by President Trump and the election! The 2021 story will hopefully be of a continued economic comeback.

Prior to the horrific events of January 6, 2021, the U.S. economy was set on a trajectory for continued recovery and growth.  Business startups are actually growing, banks are strong, the online economy continues to grow, interest rates should continue to be accommodative even with recent increases in rates, and vaccines are starting to become more available and efficiently delivered.

I still believe 2021 will continue our economic expansion. The widespread distribution of vaccine should slowly move the economy and society to an improved sense of normalcy over time. Additional monetary and fiscal stimulus policy should push the economy forward. Even with a poor unemployment report in early January, unemployment should continue to decrease in 2021. The next several months will be crucial in the ability to control Covid.

Based on the increasing costs for our family's foodstuffs purchased over the past eight months at Publix & Whole Foods; inflation seems to slowly becoming a negative factor!

I'm optimistic about the long term path of the stock market going forward; however, we will certainly have some uncomfortable days ahead! At present the market could be based more on optimism than fundamental valuations. Last year's huge stock market recovery from the March low could have "borrowed" some gains from 2021. The upcoming corporate earnings season could tell us the answer.

After a stomach churning year, stock prices ended 2020 at an all time high. The S&P 500 finished the year up 16.3%, the Dow up 9.7%, while the NASDAQ gained 44.2%.

As a Newmarket Advisors, Inc. client it was your best year ever! 2020 was a year that taught us the importance of staying calm when others were freaking out, the value of portfolio diversification and rebalancing, sticking too your real risk tolerance, and remembering your long term personal and financial goals. Praying helped also!

Humanity and the United States of America is due for some good news, let’s hope for the best in the battle to kill Covid and that the post pandemic world brings more opportunities and coming together!

Happy New Year 2021

Steve Newman