The best performance for a month since 1987
Welcome back from Thanksgiving. I was excited to jump back into writing the weekly SAS Newsletter since our last one two weeks ago formalizing the Election results and the Market responses. Writing this newsletter is something I am looking forward to beginning Monday morning each week. I’m grateful for this practice to keep in the minds and inboxes of all of our clients each week.
As the end of the calendar year approaches please schedule a meeting with us at SAS as the end of the calendar is a deadline for certain transactions that impact taxes and financial planning.
We hope you all had an enjoyable Thanksgiving weekend. It may have looked different than years past, but without the busyness of travel and dodging the famed awkward Thanksgiving dinner table conversation, the longer weekend was an invitation to unplug and relax.
Truly this is a transition period politically, economically, and public health wise. Politically, Joe Biden is the President-elect and has begun swiftly appointing his cabinet. An ascertainment from the GSA, the U.S. General Services Administration, has allowed for allocating funds and permission to talk to Federal agencies. President Trump has not yet conceded, a delay complicating and casting serious harm on the free and fair election. Free and fair elections are the heart of our democracy and we can only hope that a Biden administration’s political process will be more stable.
After the election was decided with no foreign interference and demonstrations in the street of any consequence, markets didn’t skip a beat heading higher, and all major averages set new records as interest rates remain bottom feeding and the Fed stands to intervene with little ammunition left. After Biden’s nomination of Janet Yellen as Treasury Secretary markets rallied again. It is clear the Biden administration is very interested in a safety net fiscal package as soon as possible and preferably before the inauguration but we shall see.
November offered the best performance for a month since 1987 and December is a usual month for a rally. Earnings were better than expected for the 3rd quarter but with a surge in Covid-19 cases we do have an uncertain winter. The positive vaccine trials provide one potential light at the end of the tunnel but won’t be widely available until late spring or summer. The simultaneous, another light at the end of the tunnel, and pandemic fatigue combine to present general behavior problems.
Markets are anticipating a substantial fiscal stimulus in the new year. It is funny how one indicator that would move forward a stimulus package would be a stock market collapse! Hasn’t happened.
At the end of December many of the CARES act benefits are expiring which will add to holiday stress and present a major economic challenge.
Americans did not comprehensively comply with the CDC, state, and county guidelines to stay home over Thanksgiving. Cases were surging going into the holiday so the next month should be a test of compliance and result in potential shutdowns. Christmas is the next, fast approaching holiday. It is hard to imagine families resisting travel and further spread for another holiday.
This has posed a very difficult tug of war for families across the nation. On the one hand, it’s only “one holiday,” but that’s been the case since Easter, not to mention birthdays, anniversaries, graduations, new baby and child milestones, etc. This year’s holiday season is a real-time example of “do as I say, not as I do.” Even as most agree that skipping gatherings of multiple households is in their best interest, the holiday season presents a more difficult test of sticking to the mantra.
We’re all looking forward to crossing into 2021 and leaving the chaos of 2020 behind to all that may come next.