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Kick off 2021,  it is a great time to reflect and give thanks! Thumbnail

Kick off 2021, it is a great time to reflect and give thanks!

Monthly Market Updates

Greetings!

This last year certainly hasn't been easy, and at times it can be hard to remember to be (or feel like being) grateful. But just like ordinary is a choice, so is gratitude.

I find when I intentionally sit down and think about life, I am immensely grateful for the people in my corner - and not just for my wife Lori and my entire family, including my co-workers Chad, Kayla and Danielle, but for ALL OF YOU! Thank you for your support over this past year and beyond. I am truly blessed to do what I do. It's a great honor and privilege to be able to work with all of you.

During 2021, I hope you remember to choose gratitude in the midst of what might feel like a hard (and at times impossible) last year. If you need some inspiration, spend some time in front of the mirror. Look beyond yourself and the difficulties of this present moment to see the faces of the people who helped you along the way. If you can, give them a call today and say 'thank you.' Gratitude is best shared.

My wish for you in 2021 is to take some time now and reflect on what has taken place in your life in 2020. What are you grateful for? What did you learn? Who do you need to forgive? What do I need to let go of? What do you want to take with you into 2021?

Getting on to the markets and economy, a new year offers a welcomed turn of the calendar and a fresh start. However, it’s difficult to put 2020 completely behind us just yet because the COVID-19 pandemic still presents a significant threat. Healthcare workers continue to perform heroically, while the rest of us must continue to make sacrifices until vaccines are widely distributed.

Despite the ongoing threat of COVID-19, it’s important to remember the tremendous progress the US economy has made in its recovery so far:

  • The US economy has created more than 12 million jobs since April 2020—more than half the number of jobs lost during the spring lockdown—and has brought down the unemployment rate from 14.7% in April to 6.7% in November.
  • Holiday shopping was up a better-than-expected 3% year over year according to MasterCard data. And it shouldn’t be a surprise that a 49% increase in online sales was the big driver. This growth is impressive when we remember how different the world looked in late 2019 when businesses were fully open without restrictions, shoppers freely visited brick-and-mortar stores, and unemployment was near record lows.
  • The manufacturing sector has staged a strong recovery. The Institute for Supply Management (ISM) manufacturing index in December tied for its second highest reading in 15 years and has registered above 50—the dividing line between expansion and contraction—for seven straight months.

The economy lost some momentum as 2020 ended with more rapid COVID-19 spread and renewed restrictions. Still, the US economy appears poised to grow through the end of the pandemic, bolstered by the new $900 billion fiscal stimulus package passed December 27, 2020, which provides much-needed aid for small businesses, consumers, schools, and the healthcare system. US gross domestic product (GDP) is expected to grow 4.6% annualized in the fourth quarter of 2020, followed by 2.5% in the first quarter of 2021 (source: Bloomberg).

A better economic backdrop may mean better corporate earnings. Analysts’ consensus estimates for S&P 500 Index company profits have been rising steadily in recent months (source: FactSet) amid the improving economic outlook. S&P 500 companies are expected to return to 2019 profit levels in 2021—a remarkable achievement if realized.

Thanks to the remarkable work of medical researchers and doctors, the end of the pandemic is approaching, and the outlook for the economy and stock market appears promising. But the road ahead may not be smooth. The vaccine rollout is still in its early stages and has significant logistical challenges. US-China tensions aren’t going away any time soon. Higher interest rates and a pickup in inflation could put pressure on stock market valuations at some point. Divisiveness in America is at an extreme. And following the Georgia Senate elections, tax increases may be likely—probably in 2022.

One thing 2020 has taught us as investors is the importance of sticking to a long-term investment plan. That may be easier said than done when volatility arrives—and we had our fair share of that in 2020. Investors who stayed with their plans in 2020 benefited as volatility presented opportunities.

Best wishes for a successful 2021, and please contact me if you have any questions.

Let’s stay healthy and positive.


Sincerely,

Founder and CEO
Wealth Management Midwest


Important Information


This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.


References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.


All data is provided as of January 6, 2021.


Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.


All index data from FactSet.


This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.


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