by William Henderson, Vice President / Head of Investments
While the markets closed the week with mixed returns, we saw a big move in technology stocks as the NASDAQ inched higher by nearly 2% versus a smaller move in the S&P 500 and a negative return for the Dow Jones Industrial Average. For the week that ended June 11, 2021, the Dow Jones Industrial Average lost -0.8%, the S&P 500 Index added just +0.4% while the NASDAQ jumped higher by +1.9%. Year-to-date returns on all three major indices remain comfortably in positive territory; especially given the NASDAQ’s recent run up which moves its returns more in line with the other broader indices for the full year. Year-to-date, the Dow Jones Industrial Average has returned +13.7%, the S&P 500 Index +13.8%, and the NASDAQ +9.5%. Bonds continued their move lower in yield last week with the 10-year U.S. Treasury Bond falling another 10 basis points to 1.46% from 1.56% the previous week. Strong inflation data, which we will talk more about below, has not budged the Fed’s ongoing zero interest rate policy, which seemingly keeps a lid on higher bond yields.   

Last week, we saw inflation as measured by the consumer price index (CPI) rise 5.0% from a year ago. The core index, which excludes food and energy, rose 3.8%; the largest 12-month increase since 1992. (See chart below from YCharts of US Consumer Price Index YOY). 

The Federal Reserve continues to view current inflationary trends as “transitory” or temporary and solely based on easy monetary and fiscal policies currently in place. Further, the price changes reflected in the recent jump in CPI were largely skewed to those sectors of the economy most impacted by the pandemic (e.g. travel & leisure and hospitality). See the price change examples below reported by the Federal Reserve Bank of St. Louis: 

•  Car Rental:  12.1% M/M May; 16.2% M/M April 
• Airline fares:   7.0% M/M May; 10.2% M/M April
• Used Vehicles: 7.3% M/M May; 10.0% M/M April

The Fed views these significant moves in prices as transitory, relegated to a few “reopening” sectors and largely the result of recent stimulus checks sent to consumers in March 2021. As we have reported, and the Fed has confirmed, their long-term goal is for inflation to average 2.0%. Given that we have had many years of sub-2.0% inflation numbers, seeing inflation well above 2.0% (such as last week’s +5.0%) is just what the Fed has ordered for the economy.  

While the Fed is feigning obeisance around the inflation data, the consumer may be embedding fast-rising prices as something more than transitory. Also, some recent evidence of surveys from small businesses suggests that wage growth could be accelerating, which could increase the chance of sustained inflationary pressures as wages are harder to cut once in place. Last week, the “Job Openings Hard-to-Fill” component of the NFIB small business survey reached an all-time high (see chart below from Bloomberg). Jobs in leisure and hospitality are coming back but, with a higher compensation structure because employers are struggling to fill positions. 

As noted above, both the equity and bond markets brushed off the inflation numbers released last week; and instead, are banking on the Fed and siding with the “transitory” story. The Fed remains committed to keeping rates lower for longer and thereby assuring we have a strong and sustained economic recovery on the heels of the pandemic recession of 2020. Investors, rarely more efficient than the market, just might be taking heed of the old Wall Street adage, “Don’t Fight the Fed.” We are certainly in that camp and believe long-term, diversified investors almost always win in the end. 

by William Henderson, Vice President / Head of Investments
The markets notched another week of gains across all three broad market indices last week. For the week that ended May 28, 2021, the Dow Jones Industrial Average added +0.9%, the S&P 500 Index added +1.2% and the NASDAQ posted +2.1%; all solid gains for a relatively quiet week of trading in front of the Memorial Day Holiday. For the second week in a row, growth stocks easily outperformed their value counterparts; however, on a year-to-date basis, value still leads the pack. For the full year of 2021, returns on all market indices remain very healthy. Year-to-date, the Dow Jones Industrial Average has returned +13.8%, the S&P 500 Index +12.6% and the NASDAQ +7.0%. Bonds were relatively unchanged for the week, with the 10-year U.S. Treasury Bond remaining at 1.62% as of May 28, 2021.  

While Fed officials stressed last week that inflationary pressures should prove temporary, consumers continue to worry about real inflationary indications. Supply chain pressures, semi-conductor chip shortages, and housing price increases continue to worry consumers. For example, according to the S&P CoreLogic Case-Shiller Index, average home prices in major metropolitan areas rose 13.2% in the year ended in March 2021, up from a 12.0% annual rate the prior month representing the highest growth rate since December 2005. Conversely, we saw forward indications that housing may be cooling off. Last week, the National Association of Realtors reported that April 2021 pending new homes sales fell 4.4%, month over month (see chart below from YCharts); which was significantly below expectations. 

Regardless of what Fed officials are saying, the consumer certainly is seeing the impacts of inflation. For example, the Core PCE Price Index, or Personal Consumption Index, which measures the prices paid by consumers for goods and services, moved higher last week by 3.1%. (See the chart below from YCharts). This measure is a very good indicator of inflation trends as it removes food and energy, two categories where prices tend to swing up and down more dramatically.   

Certainly, there are issues that concern consumers and investors such as inflation, supply shortages and variants of the COVID-19, but a return to normal activities and relaxing of travel and gathering restrictions seems to be impacting the markets’ upward trajectory. The consumer, with the help of stimulus funds and an easy Federal Reserve Bank, will continue to propel the economic recovery throughout 2021 and well into 2022.   

by William Henderson, Vice President / Head of Investments
Markets ended mixed last week with a reversal of the technology and value sectors for the first time in a while. The tech-heavy NASDAQ returned +0.3% for the week that ended May 21, 2021, while the Dow Jones Industrial Average lost –0.5% and the S&P 500 Index lost –0.4% over the same period. With the Fed on hold for interest rate movements and some weaker than expected employment and economic information, the bellwether 10-year U.S. Treasury Bond remained well below its 2021 high of 1.74% to close the week at 1.62%. Rising bond yields can be indicative of improving economic conditions. For the full year of 2021, returns on the stock market remain solidly positive. Year-to-date, the Dow Jones Industrial Average has returned +12.6%, the S&P 500 Index +11.3% and the NASDAQ +4.8%.

Inflation concerns have cast a pall on the markets over past weeks. One such area of noted inflation can certainly be seen in the housing market. Due to a significant jump in demand, home prices have skyrocketed in many regions of the country. Lower inventories and dramatically rising building-materials costs have impacted home prices. Higher lumber prices, for example, have had a substantial impact on new home construction prices. The chart below from Bloomberg, shows the gain in housing prices and lumber after the COVID-related recession.   

While the spike is reminiscent of the housing crisis of 2008-09 that led to the Great Financial Crisis, it is not likely to have a similar effect this time around. This time, we have falling unemployment rates, an increase in “work from home” demand, record low mortgage rates, and tight new housing construction trends. Conversely, the current housing climate gives the economy a sound foundation for a continued recovery.   

We cannot mention the word “spike” without a brief discussion of Bitcoin. Bitcoin and other cryptocurrencies have garnered plenty of attention during this market bull run, which is clearly indicative of two things: market liquidity and excess cash chasing investment opportunities. The chart below from Y-Charts, shows the run up in Bitcoin to near 60,000 (in U.S. dollars) and the recent near-50% sell-off. While drastic drops in asset prices are unsettling, Bitcoin is still a new asset class and small in terms of the overall market capitalization. However, volatility in esoteric areas of the market have, on occasion, roiled investors in a wider arena.   

This week we will see the final batch of 1st quarter earnings reports, with some major retailers and tech names reporting. Important names like Urban Outfitters, AutoZone, Dick’s Sporting Goods, Best Buy and Costco report and will give us a glimpse of the consumer’s move back to shopping whether online or in person. High-flying tech names like Snowflake, Salesforce, and Workday all report this week as well. The work from home trend has impacted these names and we will see if the recent push by corporate CEOs back to the workplace has a different impact. 

Nationally, we have witnessed a major victory over COVID-19 as we reached the critical 50% vaccination rate. Further, local economies are opening and lifting capacity restrictions on gatherings and restaurants. As we move into the summer, we will see the last area of the economy: travel and leisure surge with activity; limited only by constraints on labor. Our best friend remains Fed Chairman Jay Powell and his commitment to low interest rates for longer. 

by William Henderson, Vice President / Head of Investments
Last week, the markets moved lower from their previous record highs as investors reacted negatively to signs of higher inflation evident in the release of core inflation data. For the week that ended May 14, 2021, the Dow Jones Industrial Average returned -1.1%, the S&P 500 Index fell by -1.4% and the NASDAQ fell by -2.3%. U.S. Treasury bond yields rose as a result of the news. The 10-year U.S. Treasury Bond rose five basis points to close the week at 1.63%. Even considering last week’s losses in the markets, year-to-date returns remain positive. The Dow Jones Industrial Average has returned +13.1%, the S&P 500 Index +11.7% and the NASDAQ +4.5%.

As mentioned, the inflation data released last week cast a pall over the markets. Two generally accepted measures of inflation were released, and both saw substantial increases.  The April 2021, year-over-year change in CPI (Consumer Price Index) jumped +4.2% while PPI (Producer Price Index) popped +6.2%. CPI is the average change in prices consumer pay for all goods; PPI is the average change in prices received by domestic producers for their output. (See two charts below from Y-Charts). 

While this inflation data was much larger than economists predicted, it does not point to doom and gloom for the economy or the markets. Remember, the Fed (Federal Reserve Bank), is looking for inflation. Last week, Fed Vice Chair Richard Clarida acknowledged the surprise data by stating, “this data is entirely consistent with the Fed’s goals.” Additional comments from the Fed reminded investors that the economy remains far from the Fed’s employment goals. Recall, the Fed’s objective is to seek full employment and control inflation. For years, inflation has been running well below their stated objective of 2% per year and unemployment remains above 6%. So, the Fed has been clear about keeping interest rates lower for longer – at least until both inflation and employment are in check.  

Beyond inflation worries, investors were also forced to digest other unsettling events, including a hacker-induced shutdown of a major gasoline pipeline operated by Colonial Pipeline, the primary supplier of gas to the Southeast. Further, shortages in microchips have hampered car production in the U.S. which has oddly led to a rental car shortage. Lastly, and not unexpectedly, there was a sell-off in cryptocurrencies, specifically Bitcoin, as tech wizard Elon Musk announced that Tesla would no longer accept Bitcoin as payment for its cars because of the large carbon footprint that cryptocurrency mining leaves behind. 

There was plenty of good news last week as well. The CDC announced an easing of mask wearing requirements for fully vaccinated people and vaccine distribution for COVID-19 could begin for children aged 12-15. We have finally, hopefully, turned the corner on the pandemic and a grand reopening is upon us. A consumer flush with cash and willing Fed should provide the continued stimulus the economy and the markets need to move forward.  

by William Henderson, Vice President / Head of Investments
Markets ended mixed last week with the broader markets closing higher and the technology-heavy NASDAQ closing lower on the week. For the week that ended May 7, 2021, the Dow Jones Industrial Average gained +2.7%, the S&P 500 Index rose by +1.2% and the NASDAQ fell by –1.5%. On the heels of a weak jobs report and resultant flight to quality, the 10-year U.S. Treasury Bond fell by six basis points to close the week at 1.58%. Value stocks, led by energy, materials and financials proved to be the best performing sectors, while growth stocks and utilities underperformed. While the NASDAQ struggled, we saw record levels hit on the Dow and the S&P. Year-to-date, the Dow Jones Industrial Average has returned +14.3%, the S&P 500 Index +13.3% and the NASDAQ +6.9%. 

As mentioned, the latest U.S. jobs figure, released last week, reported just +266,000 new jobs created in April 2021 vs. Wall Street Economists’ estimate of +1,000,000. In the annals of forecasting this was a huge miss, and a lot of uncertainty remains around the weak job numbers. Certainly, forecasting in the age of the COVID-19 Pandemic, is not a simple predictable science. Shortages of microprocessors and lumber could explain some of the job losses as they likely caused cancelled or delayed business production. Further, the relative generosity of unemployment insurance benefits for low-wage workers could be discouraging the jobless from accepting certain offers. Uncertainty in jobs reports will likely continue as a combination of varied openings of state economies and slowing vaccine distribution weigh heavily on hiring by leisure-related industries. 

Despite the weak job market, investors overall were pleased because the weakness further supports the Federal Reserve’s stance on interest rates, essentially assuring rates remain low for longer, which is generally good news for equities. Federal Reserve Chairman, Jay Powell, remains committed to seeing average inflation of 2% before raising interest rates. We are certainly seeing signs of inflation especially in certain building related commodities. Copper, lumber, and iron ore all hit new all-time highs last week; and Brent Crude Oil ended the week 2% higher, putting the price of a barrel of oil at just under $70.The chart below from the Federal Reserve Bank of St. Louis, shows the breakeven inflation rate derived from the yield on the 10-year U.S. Treasury and the level at which market participants “expect” inflation to be over the next 10 years. Higher or increasing spreads, as is evident in the chart, represents higher inflation expectations.    

Unsteady job reports, inflation concerns, and lingering pandemic worries weigh heavily on the markets, but the Fed remains committed to a strong recovery. We are certainly seeing healthy data from corporate America. So far, according to Goldman Sachs, 68% of first quarter results of S&P 500 companies reported earnings that beat expectations. While this is strong performance, the markets are more focused on future guidance and that is where uncertainty continues. Travel and leisure services are gaining strength and opening at faster rates than expected. To that end, the consumer remains poised to contribute to the economic recovery in a big way. Cash on hand and savings accounts remain at record high levels. Shown again in the graph below from the Federal Bank of St. Louis on M2 – Money Stock (sum of bank deposits and retail money market funds). 

by William Henderson, Vice President / Head of Investments
As is typical in any protracted bull market, major stock indices took a pause last week. As a result, we saw some selling of equities with negative returns across all three market averages. For the week that ended April 23, 2021, the Dow Jones Industrial Average fell by -0.5%, the S&P 500 Index lost -0.1% and the NASDAQ fell by -0.3%. Profit taking and selling are typical in any market especially in one that has produced such strong results since the bottom of the pandemic in March 2020. Year-to-date returns on all market indices remain solidly in the green column; with the Dow Jones Industrial Average returning +11.9%, the S&P 500 Index +11.8% and the NASDAQ +9.0%. There were whispers of a Biden-led capital gains tax increase throughout the week and demand for less risky U.S. Treasuries stayed steady. The 10-year U.S. Treasury Bond closed the week at 1.58%, unchanged from the previous week. The market still has the facets needed to sustain favorable returns going forward. Interest rates are low, fiscal stimulus is strong, corporate balance sheets are in great shape and the vaccination rate continues to increase. Quarterly earnings seasons got into full swing last week and most reports provided evidence that the economy is gradually moving to a post-pandemic environment. The last remaining market sector to continue exhibiting weakness: travel and leisure, showed a few glimmers of hope last week. Although major airlines, including Southwest, American and United, posted weak quarterly earnings, they reported seeing significant pick up in travel demand as greater numbers of people are vaccinated and therefore becoming more comfortable traveling.   

The U.S. Labor market continued to show renewed strength. According to the Department of Labor and Federal Reserve Bank of St. Louis, initial unemployment claims fell to the lowest level since the onset of the pandemic in March 2020. 

While labor and manufacturing are showing renewed strength, the recovery in services on the back of vaccination efforts and the gradual lifting of social distancing measures should lead to accelerating growth over the remainder of the year for rest of the economy.   

This week we have a rush of tech stock earnings reports including Tesla, Facebook, Amazon, and Google. These reports will give us a view forward to the full year of earnings if recent strength in the sector is able to continue its run.  

Consumers have cash on hand and healthy personal balances sheets to fuel the economic recovery well into 2022 especially if the vaccination rate accelerates and travel and leisure returns to a normal level. Market setbacks like rumors of capital gains tax increases are visible risks that always present themselves in the short run. We like to be concerned about the long run and staying invested and staying the course is the right plan. 

View/Download PDF version of Q1 Commentary (or read text below)

Fixed Income
Fixed income securities declined, in aggregate, during Q1 2021, as interest rates rose; bonds prices fall when rates increase. The 10-year treasury bond, the most widely referenced proxy for U.S. interest rates, has nearly doubled during the first three months of the year, from 0.95% to 1.65%. While the increase has been sharp and brisk, rates remain extremely low relative to historical standards. For perspective, in the near-decade leading up to the 2008 financial crisis, the 10-year government bond resided around 5%. Rates have remained structurally lower post-2009, but in the year or two pre-COVID, the 10-year was at 2-3%.

Low interest rates facilitate economic activity because they mean that it is cheap to borrow money. Borrowed money is used to finance businesses and personal expenditures, thereby buoying economic output. Moreover, fixed income represents the prime alternative to equities; low rates are less appealing than high rates, all else equal, to investors, and therefore, when rates are low, demand for – and therefore, the price of – equities tends to be elevated. The main risk to the low rate paradigm is inflation; should inflation materialize at a rate greater than that of current expectations, the Federal Reserve will likely hike rates. Higher rates curb inflation because it boosts the expected return on savings, thereby encouraging investors to park money away rather than spend it (and hasty spending is the driver of inflation). For now, inflation expectations remain moderate, around 2%; in turn, rates are likely to remain relatively low.

Equities
The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 were up approximately 6%, 9%, and 3%, respectively, in the first three months of 2021. The Dow’s leadership – and the Nasdaq’s lag – are a reversal from 2020, during which time the tech-heavy Nasdaq outperformed the industrial-laden Dow. Clearly, in 2020, tech stocks benefitted from “stay-at-home” trends; in 2021, however, travel and leisure are set to uncoil as the American population gets vaccinated.

As touched on above, stocks are benefitting from an accommodative interest rate environment in which investor demand for fixed income is muted owed to low rates. On top of this, the tremendous volume of fiscal stimulus combined with reopening trends imply a highly favorable 2021 outlook for U.S. corporations.

Outlook
As of mid-April, between 25-30% of the U.S. population has been vaccinated. The pace of inoculation is highly encouraging and suggests that sometime during the summer, a great enough portion of Americans will be vaccinated such that “normalcy” – or something resembling it – will resume. Reflecting the pent-up demand that will be truly unleashed, economists believe U.S. GDP could be as high as 6% during 2021, the most productive economic year in America since the 1980’s. While equity valuations appear high relative to historical figures, the stock market is not expensive compared to fixed income, the more salient measure. As fiscal stimulus flows through the economy and amplifies the pent-up demand, corporate earnings are likely to increase meaningfully and support current stock prices. As discussed, the key risk facing financial markets is inflation, because high inflation would likely force rates up, hindering equity valuations. At this point, though, we note that inflation expectations remain moderate and therefore, inflation is unlikely to interfere with the near-term outlook.

by William Henderson, Vice President / Head of Investments
The market continued its hot streak with yet another week of positive gains across all three major indices. For the week that ended April 16, 2021, the Dow Jones Industrial Average returned +1.2%, the S&P 500 Index gained +1.4%, and the NASDAQ moved higher by +1.1%. Year-to-date gains moved higher as well, with the Dow Jones Industrial Average returning +12.3%, the S&P 500 Index +11.9% and the NASDAQ +9.2%. Strong demand from international investors for U.S. Treasuries pushed bond yields lower again even as the economy is exhibiting considerable evidence of a powerful rebound in 2021. The 10-year U.S. Treasury Bond closed the week at 1.58% down another eight basis points from the previous week.   

The past week’s gains were widespread with the market showing strength and breadth of performance across several industry sectors including healthcare, retail, and industrial names. Widespread gains across industry sectors is a sign that the market is healthy with strong participation by many companies and industries rather than just a few names. See the chart below from Cornerstone Macro showing the Breadth of the Market in terms of the percent of stocks in the S&P 500 above their 150-day moving average.

Evidence of the economic rebound was present in several places last week. According to Bloomberg, retails sales rose by 9.8% in March compared with February; this was the one of the largest paced gains in 30 years. The jump in sales was driven by consumer spending as stimulus checks continued to hit personal bank accounts. The more favorable news was that easing of COVID-19 lockdown restrictions and progress in vaccinations allowed consumers to resume their old spending habits. Spending was spread among many retail sectors such as clothing stores, motor vehicle sales, and restaurant and bars. 

The green shoots in consumer spending could be just the beginning of a spending juggernaut that will unfold as more sectors of the economy open and the vaccination rate increases. The U.S. personal saving rate, as reported by the Federal Reserve Bank of St. Louis, currently 14%, stands nearly twice its pre-pandemic level of 8%. If consumers simply reduce their savings to the former level and resume historic spending patterns a strong economic rebound is on the near horizon.  

Lastly, corporate earnings releases for the first quarter of 2021 began last week with several major banks reporting their first-quarter results. According to Bloomberg, profits for all 13 major banks easily exceeded Wall Street analysts’ expectations, driven by lower credit costs, active trading, and investment banking activity. Banking is the backbone of economic activity as lending to companies allows for growth and investment. Federal Reserve Chairman Jay Powell is committed to keeping rates low for as long as necessary to force an economic recovery. Low rates allow banks to borrow low and lend high – a simple equation for success and growth.

Low rates, consumers flush with cash, and widespread COVID-19 vaccine distribution continue to propel the economic recovery. The breadth of the recovery among economic sectors and across equity markets is pointing to the next phase of our economy when we move from recovery to expansion. 

by William Henderson, Vice President / Head of Investments
We saw another strong week of positive returns across all three major market indices, adding to already solid year-to-date gains. For the week that ended April 9, 2021, the Dow Jones Industrial Average returned +2.0%, the S&P 500 Index gained +2.7%, and the NASDAQ moved higher by +3.1%. As noted, the gains in all three broader market indices added to decent returns thus far for the full year. Year-to-date, the Dow Jones Industrial Average has returned +10.4%, the S&P 500 Index +9.9% and the NASDAQ +7.9%. Following a full quarter where we saw value stocks, best represented by the Dow Jones Industrial Average, out-perform growth stocks, markets came closer into balance with growth stocks posting a strong finish. Lastly, after commentary by Federal Reserve Chairman, Jay Powell about keeping rates lower for longer, the 10-year U.S. Treasury Bond fell six basis points to 1.66%. As recently as March 31, 2021, the 10-year U.S. Treasury Bond stood at a one-year high of 1.74%, as investors believed the strong economic recovery would push interest rates higher.  

We continue to see investor assets flow into the equity markets. The so called “TINA” trade – There Is No Alternative – certainly seems to be playing out in full force right now. With interest rates so low and returns on fixed income securities anemic, cash is flowing only one place – the equity markets. See the chart below by CNBC using data from Bank of America, where inflows to global equity funds over the past five months exceed those of the prior 12 years. 

The markets are taking their cues from strong monetary support by the Fed and record fiscal report by the government in the form on multiple trillion-dollar stimulus packages. Further, JPMorgan Chase CEO, Jamie Dimon, said in his annual shareholder letter that an economic boom could easily run into 2023. The combined impact of stimulus support, vaccine distribution and record amounts of cash on the sidelines held by investors and consumers is fueling an economic rebound that could be as strong as +9% in GDP growth in 2021.

In a nod to adding validity and importance to cryptocurrencies, Coinbase Global, Inc., the fastest growing cryptocurrency exchange announced its intent to go public this week with a massive $100 billion valuation. If the IPO goes as planned, Coinbase will cement itself at the “Big Board” of U.S. cryptocurrencies. Coinbase has 56 million verified users and has been adding as many as 13,000 new retail customers a day. Coinbase isn’t a cryptocurrency itself like Bitcoin, rather it is simply an exchange where cryptocurrencies are traded and thereby producing trading fees. Cryptocurrencies and exchanges are not yet regulated like banks or trading firms and carry a higher degree of risk and complexity. Watch for regulators to continue to pay very close attention to this market and eventually impose a needed level of regulation.  

The economy has all the tools for the continued strong rebound from the COVID-19 pandemic recession in 2020. Retail and institutional investors are “all-in” on the market and massive piles of cash fuel the markets and the economy. As vaccine distribution reaches more consumers, the last sectors of the economy, travel & leisure, will explode and could create a labor shortage as those sectors require a lot of employees to operate effectively. Inflation seems like a distant pipe dream of Fed Chairman Powell, and he wants to see it before raising interest rates. 

We covered a lot this week. Please reach out to your Financial Advisor to discuss any topics further, or for specific market-related questions.   

by Maurice (Mo) Spolan, Investment Research Analyst

The S&P 500 and Dow Jones Industrial Average were both up modestly last week, 1.6% and 1.4% respectively, while the tech-heavy Nasdaq 100 was flat and International and Emerging Market equities trended lower. Bond prices rose as interest rates declined slightly; interest rates have risen quite a bit in 2021 but remain very low from a historical perspective. The 10-year U.S. Treasury note ended the week at 1.66%.

The blockage in the Suez Canal is disrupting as much as 12% of global trade. This supply constraint has also facilitated a rise in the price of oil, which is now above $61. Oil prices have recovered considerably since the pandemic’s outset and may settle at this higher level as demand for travel accelerates upon reopening throughout 2021. The giant container ship bocking the Suez Canal seems to have finally been cleared but the impact to the global supply chain is unclear.

President Biden is increasing his vaccination target, up to 200 million doses administered in his first 100 days in office, from an initial goal of 100 million. Estimates show that 14% of Americans are fully inoculated and 26% of residents have received at least one dose.

The economic outlook remains extremely favorable as both monetary and fiscal stimulus are highly accommodative, and the vaccine roll-out accelerates. As pent-up demand is unleashed, 2021 may end up being one of the most lucrative years in American economic history.