New President; Same Market

01/19/2021
Last week’s economic reports showed the ongoing bifurcated impacts of the coronavirus. Retail sales in December fell for the third straight month, and the November decline was revised lower. Small business optimism fell for the second straight month, to its lowest level since last May. Consumer comfort fell for the eighth straight week, and weekly jobless claims rose to their highest since mid-August. At the same time, industrial production exceeded expectations while rising for the third straight month and the fifth month in the last six. And mortgage applications surged higher for the week of January 8, for both purchases and refinances, as rates hovered near their low. 

What Could Knock This Rally Off Its Tracks?

01/12/2021
It is somewhat remarkable that domestic equity prices surged to a 1.8 percent gain last week. Not even the shocking assault on the U.S. Capitol Building on Wednesday was enough to derail the powerful rally that has been underway since the election in November. Stocks have climbed 17 percent since then, having risen in seven of those ten weeks. Last week’s strength came in the wake of the Senate runoff elections in Georgia, which swung control of the Senate to the Democratic Party in a dramatic upset. While it may not always be necessarily true of individual voters, last week’s gains were clear evidence that the stock market votes with its pocketbook. 

2021 Economic Growth Depends on the Pace of Vaccine Distribution

01/04/2021
The pace of economic growth in 2021 will largely be determined by the pace of distribution of Covid-19 vaccine. In the U.S., the total number of infections during the pandemic now exceeds 20 million, with 350 thousand deaths. Worldwide those totals are 85 million cases and 1.9 million deaths. Several countries remain in various stages of social restriction amid a resurgence in the virus driven by movement around the holidays.