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Market Commentary

December Monthly Market Commentary

2021 Can’t Come Soon Enough


We’ve always said that the health crisis would determine the path of the economy, and the latest news on the pandemic is concerning. Cases of the virus, hospitalization and mortality rates have surged to unfathomable levels, and health experts believe this distressing trend will accelerate after the holidays. While the happy prospect of widespread vaccinations over the next six months allows us to be more optimistic about 2021, the resurgence of the virus is poised to deal the economy a significant near-term blow. Indeed, growth in consumer spending and jobs is already slowing sharply from the torrid pace seen over the summer months.

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November Monthly Market Commentary

Rocky Road to a Vaccine


Like his former boss, President Barack Obama, Joe Biden will be inheriting a damaged economy when he takes office on January 20. The Covid-19 pandemic has not only sent the nation into its deepest recession since the 1930s, it is leaving indelible scars that will restrain activity for some time to come. Worse, he will be moving into the White House just as a second wave of the virus is cresting, sending infection and hospitalization rates to daily records and prompting renewed lockdown restrictions throughout most of the nation. The restrictions so far are not as onerous as they were when the coronavirus initially struck in March and April but they are already having a chilling effect on activity, particularly on restaurants, bars, travel and other service providers that rely on in-person transactions.

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Weekly Market Commentary

January 19, 2021


As advertised, the economy is going through a rough patch before the widely expected improvement sets in. What is not known is how rough the patch will turn out to be and how long it will last. The answers to those questions will depend almost entirely on how the health crisis evolves and how government officials respond. Developments on the health front are not very encouraging; cases of the virus, hospitalization and death rates continue to set daily records even as the rollout of COVID-19 vaccines is proceeding far too slowly to stem this distressing trend. Understandably, a number of states are imposing tighter restrictions on social behavior and business operations. This confluence of events is adding to downward pressure on economic activity.

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Weekly Market Commentary

January 11, 2021


As the curtain rises on 2021, a brighter script for the U.S. economy is about to be written. The final chapter could not come soon enough, as the gruesome health and political drama that wreaked havoc on the nation last year continues to unfold. Fears of a post-holiday surge of the pandemic are coming to fruition. Cases of the virus are accelerating, spurring record levels of hospitalizations and deaths, and a new variant is complicating the remedial process. Health officials expect conditions to worsen in coming weeks, confirming predictions that January would be the darkest month of the pandemic. Meanwhile, this week’s riots in Washington punctuated a highly polarized and turbulent campaign that unfortunately did not end with the November elections.

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Weekly Market Commentary

December 28, 2020


As 2020 draws to a close, we reflect on a difficult year that couldn’t end soon enough. COVID-19 infected more than 18 million individuals and led to 325,000 lost lives in the U.S. The economy suffered its most severe contraction since the WWII demobilization, 22 million people lost their jobs and thousands of small businesses were shuttered. The initial recovery phase was extremely rapid with unprecedented fiscal and Fed stimulus helping the economy recoup roughly 80 percent of its output loss, and 55 percent of its job losses in just eight months. But while some sectors like tech, retail and housing were outperformers, hard-hit households and businesses remain extremely vulnerable to the virus resurgence.

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Weekly Market Commentary

December 21, 2020


Along with pandemic-related headwinds, a severe nor’easter battered a major region of the economy this week, providing COVID-wary households with another excuse to avoid the perils of outdoor activity. Fortunately, the outburst from Mother Nature is a transient headwind that will not leave long-lasting scars as are likely to prevail in a post-COVID world. But while the Coronavirus legacy is still taking shape, there is hope that the government is closing in on a fiscal package that will dilute its near-term impact. Like the weather, however, the path from negotiation to legislation is fraught with turbulence, so the outcome is still in doubt.

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Weekly Market Commentary

December 14, 2020


The deadlock in Congress over fiscal aid shows no sign of ending before the end of the year. The dysfunction in Washington is stoking anxiety on Wall Street, even as the pandemic is taking a bigger toll on Main Street. Layoffs are once again rising and restrictions on businesses are spreading, threatening to undercut the jobs recovery.

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Weekly Market Commentary

December 7, 2020


The mid-20th century German politician, Ludwig Erhard, is famously quoted as saying “a compromise is the art of dividing a cake in such a way that everyone believes he has the biggest piece.” While that principle may apply in many cases, a cynic would likely view a compromise in a more distressing light, one that leaves all parties involved in negotiations equally unhappy. We suspect that the $908 billion COVID relief bill cobbled together by a bipartisan group of lawmakers this week fits that more cynical description. For sure, the Democrats, as well as President-elect Biden, would like to see a more muscular relief effort, something closer to the $2.2 trillion Heroes Act passed in the House last spring. Conversely, most Republicans would no doubt be happier with a skinnier bill, something closer to the $500 billion package put forward by Senate majority leader McConnell a few months ago.

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