Last year as the pandemic broke out in China, we looked to the east for signs of what life may be like dealing with lockdowns and a slow return from lockdowns.
For much of 2020, we were locked in our homes and have been waiting for life to return to normal. Thanks to government transfer payments, even those who lost their jobs saved money. According to the New York Times, in 2020, personal income increased by over $1 trillion and spending decreased by over $530 million. This means that American consumers are sitting on a $1.5 trillion war chest that is ready to be unleashed in the years ahead. If January retail sales are a hint of what's to come in 2021, retail spending will be powerful.
It was a year ago when COVID fears rocked the financial markets and pushed economies into lockdown. While all of us had hoped that it would end in short order, we still find ourselves socially distanced and are just passing the peak of the 2nd wave. The good news is that cases are falling quickly and vaccinations are on the rise. With the Great Re-Opening coming, we will be ready to emerge from our homes in a big way.
This is one of my favorite posts to write every year as we get to look back on Wall Street predictions and see how they panned out. We have done this in 2014, 2015, 2016, 2017, 2018, 2019, and 2020 so it is a tradition to see which strategists did well and which missed the mark.
Last year, the strategists predicted a slight up year market for 2020 with an average target of +1.6%, 3283, for the S&P 500. Of course, no one predicted a global pandemic, and I doubt they would have forecast this number if they knew what was ahead. Despite the lockdown induced recession, the epic stimulus from the Fed and policy makers helped drive stock market indices to all time highs and the S&P finished at 3756, up over 16%.
Last year's biggest bull was CSFB's Jonathan Golub at 3425 and that wasn't very close. Second place was a three way tie with a prediction of 3400. Now let's take a look at their thoughts on 2020...
On Tuesday, President elect Joe Biden announced that former Fed Chair Janet Yellen is his pick to be Treasury Secretary. Given her successful tenure as Fed Chair from 2014 to 2018, the pick looks like a winner from the start. Let's take a look at why she is a great choice in the current environment.
On November 9, 2020, Andy and Chris spoke on a zoom call with the friends of Tuckahoe Public Library to discuss "Financial Literacy: The Pandemic's Impact on the Economy and Financial Markets." In the talk, we cover a lot of ground including:
Earlier this week, we said that the market may be predicting another Trump upset, but another indicator is predicting our incumbent president's loss. The "Presidential Predictor," popularized by Sam Stovall, CFRA's chief investment strategist, tracks the S&P 500 performance from July 31 to October 31. Going back to 1944, it has found that a positive move over that period usually translates to an incumbent victory, while a negative move translates to a loss.
Most polls have Biden well ahead of President Trump and betting markets have Trump as an underdog with just a week to go before Election Day. However, we know that in 2016, Trump was in a similar position so it wouldn't be that shocking to see another upset win for Trump. The battleground states are very tight races so anything is possible. What is the stock market telling us about who will win the White House?
The Presidential election is just 26 days away and many investors are worried about the implications to their investments. While we know that polling isn't perfect, former VP Joe Biden is leading national polls and is well ahead of where Hillary Clinton was four years ago. A lot can happen in four weeks, but if Joe Biden wins the election, will his policies mean higher taxes and potential big losses to your investment portfolio?
Recall back to March when everything in the New York tri-state area closed in order to slow the spread of corona virus. Outside of New York, your timeline may have been different but the experience is likely the same. We stayed home. Kids learned remotely. The economy slumped. Jobless claims skyrocketed. Uncertainty was the only thing certain. This week, the S&P 500 hit a new highs. Wait, what?!
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.-"Runnymede"), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede. Please remember that if you are a Runnymede client, it remains your responsibility to advise Runnymede, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Runnymede's current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Runnymede does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Runnymede's web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.