TLWM Financial Blog
The stock market has been a bright spot in February, despite a choppy end to the month, as stocks were up about 3% (YCharts). Continued positive economic data, increased vaccine distributions, and better than expected earnings likely served as the primary drivers, while the last few days brought some concerns over higher interest rates.
2021 began just like 2020 ended with stocks moving higher. There were plenty of headlines to worry about throughout the month as we transitioned to a new administration and COVID-19 cases jumped after the holidays. Despite these risks, investors appeared to remain focused on the positives, as stocks hit all-time highs, before reversing course the last few trading days of the month; the S&P 500 ended January down roughly 1% (YCharts).
TLWM Annual Outlook – 2021
2020 has been filled with remarkable challenges as the global pandemic has upended life in ways that were unimaginable a year ago. Those challenges arrived suddenly with the economy’s abrupt shutdown, subsequent recession, and bear market in stocks during the 1st half of the year. The pandemic’s impact is likely to be felt for years to come as it has changed the way we live, work, and communicate.
As we look toward 2021, we believe that there is light at the end of the tunnel demonstrated by the substantial economic improvement in the 2nd half of this year, along with promising developments in treatments for COVID-19 and the arrival of much anticipated vaccines. Investors appear to believe that the future is bright as the unprecedented drop in stocks at the beginning of this year has reversed and stocks have made an incredible move higher since the lows in March, with the S&P 500 up roughly 13% for the year (through Dec 11th). (YCharts)
We recently upgraded our Leading Economic Index (LEI) indicator on our dashboard to yellow. This indicator signals what economic growth may look like over the next 6 months. LEI has been steadily improving during the 2nd half of this year.