The markets were down fractionally last week, as the Dow (-0.7%), NASDAQ (-0.7%) and S&P 500 (-0.9%) exhibited minor losses. Conversely, bonds continued their rally, as taxable bonds were up about 0.2% - 0.4%, and tax free muni bonds were up 0.3% - 0.5%. Despite the markets going down last week, they have exhibited a strong month of December as well as a 4th quarter.
There seems to be a dichotomy with respect to the economy, as the wealthy continue to get wealthier. Tech companies continue to bring astronomic returns to their owners and shareholders. Meanwhile, their appears to be an increasing number of people who are out of work and relying on governmental aid. For the past several weeks, the markets rallied because of the expectation of a stimulus package. However, that stimulus package has gotten stuck in Congress, as the politicians seemingly spend more time on politics than taking care of their constituents, but I digress. It does appear that a stimulus package may soon be approved that will provide some aid to the unemployed Americans and to state and local governments. This will be a big help to individuals, particularly as the rise in COVID cases and deaths have caused several state governments to increase their restrictions on small businesses, which will certainly trickle its way through the economy. I will also be very interested in seeing November’s economic leading indicators that are being reported on Friday. As you know, our investment stance has been very cautious because of political uncertainty and the second wave of the pandemic hitting the US. Fortunately, Pfizer’s vaccine has been approved by the FDA and inoculations should begin as early as this week. Other companies’ vaccines should also be approved fairly soon, too. Now THAT is good news.